true true 0 The business jet market, which soared in recent years as U.S. companies posted record profits and new foreign buyers raised demand, is now facing a hard landing. That much we knew was true as of late. How bad it's getting, however, is only just being revealed. The sector could be poised for big drops in demand as corporations cut back discretionary spending during the recession and dried-up credit makes purchases by smaller companies and individual owners more difficult. Attacks from politicians who have portrayed business jets as extravagant and frivolous have also hurt. Some analysts say recovery will be slow in the face of lower demand and increased competition from used aircraft that have flooded the market. "We don't see the number of deliveries even hitting 2008's level in the next 10 years," said Brian Foley, president of Brian Foley Associates, a business aviation consulting practice. Last year, deliveries of business jets reached a peak 1,315, according to data from the General Aviation Manufacturers Association (GAMA), a Washington, D.C-based group that tracks noncommercial aviation. Its data shows deliveries rose annually from 2003 to 2008. Though GAMA does not forecast deliveries, it noted that business jet shipments dropped nearly 36 percent in the first quarter, to 191 from 297 a year earlier. Restructuring firm AlixPartners LLP projects business-jet deliveries will fall 30 percent this year, with an another 10 to 15 percent drop forecast for 2010. "The demand will not start to bottom out until 2011," said Philip Toy, managing director and co-leader of AlixPartners aerospace and defense practice. Even though major jet makers such as Textron Inc's Cessna unit have already cut thousands of jobs to cope with slumping orders, more cutbacks could still be ahead. Textron said earlier this year it expects corporate jet deliveries to continue to decline in 2010. Cessna, the world's largest maker of corporate aircraft, expects to deliver 290 to 300 planes this year, down from 467 in 2008. "The overall economy has to start a noticeable pickup before the business jet market picks up," said Wayne Plucker, aerospace and defense analyst with Frost & Sullivan. "This may be a slightly more protracted slump just because I don't think the economy is going to come back roaring soon." Cessna is cutting its workforce by about 45 percent to a target of 8,900 people by the end of this year. Cessna at one point employed about 16,000 workers. Canada's Bombardier Inc and Gulfstream Aerospace, a unit of defense contractor General Dynamics Corp, have also cut jobs and reduced production. Jens Henning, vice president of operations for GAMA, said his group's members have idled 17,000 workers since the fall of 2008. Small businesses private jet programs are going to suffer most of all. "I think the business jet makers are in real danger of having more cancellations," said Toy of AlixPartners. He said a recovery for business aircraft generally lags a rebound in the general economy by 18 to 24 months. In other frightening news, Toy added, "I don't think many industries are viewing the bottom of the recession yet." 2009-07-02T23:44:19Z 0 true 2716 false false 2009-07-02T23:40:00Z true true business-jet-market-faces-slow-recovery false 0

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