Premium #183 – Are We Headed for an Aviation Downturn?

There is good and bad news as we take a look at the near future in commercial aviation. The good news is that most programs have large backlogs that provide steady deliveries for the foreseeable future.   The bad news is that some economic warning signs are on the horizon, which could signal a downturn that could impact the markets.

We begin with some of the leading indicators – orders for large business jets. This sector has led the recovery in business jets in recent years, but appears to be slowing. While Gulfstream and its new G650 have remained strong, sales for Bombardier and Dassault appear weak. That weakness is coming from Asian markets, which when combined with continued weakness in the small and medium sectors that are recovering slowly from the 2007 recession, is indicative of economic turbulence ahead.