WASHINGTON (Reuters) - Cessna, one of the world's leading makers of private planes, sees no end in sight for the two-year old business jet boom, as the U.S. economy stays on a sound footing and corporate profits keep growing.
"All of the indicators, all of the forecasting agencies are saying the growth cycle is going to continue," said Jack Pelton, chief executive of Cessna Aircraft Co., at the Reuters Aerospace and Defense Summit in Washington, D.C. "This ride's going to continue for a while."
According to the General Aviation Manufacturers Association, 629 business jets were delivered worldwide in the first nine months of this year, up 23 percent from the 510 delivered in the same period last year.
That puts the industry on track to exceed the 750 delivered last year, and illustrates the sharp growth in business-jet purchases since the depths of the air travel recession in 2003, when only 518 were delivered.
Cessna, a unit of industrial conglomerate Textron Inc. (TXT.N: Quote, Profile, Research, Stock Buzz), competes with General Dynamics Corp.'s (GD.N: Quote, Profile, Research, Stock Buzz) Gulfstream and Raytheon Co.'s (RTN.N: Quote, Profile, Research, Stock Buzz) aircraft unit, which are also benefiting from the boom in jet sales.
Pelton said he feels better now about order prospects than he did a year ago, when most analysts were calling a peak in the business cycle for private jets.
"I had a feeling the economy was fragile," said Pelton, explaining his guarded outlook a year ago, which was compounded by rising fuel prices and global political unrest. "Today I feel much more bullish about 2010 and possibly beyond."
Pelton said he was much more optimistic now about corporate profits, which tend to drive business jet purchases: "Maybe they (profit growth rates) won't be as high as they have been in the past, but they are still showing a growth trend with a positive economy."
Cessna, based in Wichita, Kansas, is on track to hit record plane deliveries next year. Continued...
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