October 15, 2018 / 11:11 AM / a month ago

Money flies across tarmac as business jet show kicks off

ORLANDO, Fla. (Reuters) - On the eve of the world’s largest business jet show, deals began in earnest as planemakers polished plans for supersonic jets and unveiled new luxury aircraft featuring high-speed WiFi and hot showers at 40,000 feet.

The logo of Bombardier is seen during the Latin American Business Aviation Conference & Exhibition fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil August 14, 2018. REUTERS/Paulo Whitaker

After years of sluggish sales, potential buyers at the National Business Aviation Association annual corporate jet show are looking closely at new aircraft models with longer ranges and technology for smoother rides, while weighing the advantage of recent U.S. tax deductions.

Among big announcements so far, Embraer SA launched two new mid-sized jets and Textron Inc agreed a deal to sell up to 325 Cessna planes to Berkshire Hathaway Inc’s luxury plane unit NetJets.

And in a potential boost to efforts to bring back faster air travel, the developer of a $120 million supersonic business jet, Aerion Supersonic, said it would be able to take off and land without regulatory changes in the United States.

Hopes for new orders were also underpinned by a dwindling supply of pre-owned aircraft.

“When you cannot find your baby in the pre-owned market you try to buy a brand new one,” Eric Trappier, chief executive of Dassault Aviation, told reporters on Monday. Dassault is nudging up production rates on certain business jet models, and Trappier said pre-owned versions of its long-range, large cabin Falcon 7x were no longer available.

A 10-year outlook by Honeywell Aerospace ahead of the convention forecasts up to 7,700 new business jet deliveries worth $251 billion from 2019 to 2028, up one to two percentage points from the 10-year forecast in 2017.

Honeywell expects an 8 per cent to 10 percent rise in delivery levels in 2019, compared with a flat 2018, fueled by the recent entry into service of new aircraft like Bombardier Inc’s Global 7500 and Gulfstream’s G500.

David Coleal, president of Bombardier Business Aircraft, attributed an industry-wide rise in orders in the first half of 2018 to the “increasingly positive U.S. climate for business jets,” the world’s largest market for executive aircraft.

Despite the optimism, U.S. aerospace analyst Rolland Vincent warned business jet makers not to increase production, for fear of weakening prices.

“What I am hopeful for is that we see discipline in any acceleration of production rates as the tide turns - pricing and residual values have a long way to go to bounce back to the paths they were on some years ago,” he said.

Reporting by Allison Lampert; Writing by Tracy Rucinski; Editing by Steve Orlofsky and Rosalba O'Brien

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