US report looks at the competitiveness of the business jet market

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The economic downturn has presented the US business jet industry with a new set of challenges, according to findings from the USITC.

The economic downturn has presented the US business jet industry with a new set of challenges, according to findings from the US International Trade Commission (USITC).

Focusing on the factors which have shaped the competitiveness of market during 2006-11, the USITC was asked by the US House of Representatives Committee on Ways and Means to carry out the study. It focused on business jets with a maximum take-off weight of 50,000 pounds.

The study, titled ‘Business Jet Aircraft Industry: Structure and Factors Affecting Competitiveness’ found that the credit crunch hurt smaller companies and owner-operators much more than larger public companies, VHNWIs, and government buyers.

It also showed that as financing became scarcer throughout the economic crisis, a larger number of business aircraft were paid for with cash, with the number of business jet purchases financed with loans falling to 25-30% in 2009-10.

Looking at how the economy will affect business jet demand, the report, which has been welcomed by the NBAA, concludes that the future competitiveness of the US industry may be influenced by “changes in such factors as regional demand, new entrants into the industry, workforce characteristics, government regulations pertaining to the environment, airspace usage, and aircraft user fees.”

In some cases, the study found that changes, such as the opening of airspace in China, could actually benefit the US industry, whereas other changes, such as a proposed aircraft user fee in the US, will create additional challenges.

The report citied various articles and data obtained from Corporate Jet Investor.

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