Charles M., taken on 1 June 2021 near California on 1 June 2021. A Sesna Citation aircraft is seen at the Shulz Sonoma County Airport.
George Rose | Getty images
with consumer confidence Tumbling, commercial air travel demand Be lowEven deep-pocket travelers, Barclay’s business jets are pulling back according to the latest survey of broker-dealers and financials.
According to the survey, the customer’s interest in buying business jets has fallen by 49% since March, which was held from 9 to 15 April and had 65 respondents.
The Barclays Business Jet Indicator uses five metrics including a 12 -month approach and pricing to assess the market status last week. All but one metric (inventory level) declined from March to mid -April. As a result, the overall score fell from 52 to 40.
The decline of the percentage recorded in the most recent survey is at 23%, the largest recorded by Barclays since the Kovid epidemic. Barclay analyst David Strauss told CNBC that he expected it to become weak, but not to such a large extent.
A overall score in the lower 40s indicates that according to Barclay, the market is slow.
The book-to-bill ratio of indicator airplane manufacturers is correlated with a major measure of their financial health. A score of 40 suggests that the dollar value of the new orders of the manufacturers is currently about 10% behind that order, which is currently being completed, Strauss said.
The respondents of the survey told Barclays that the customers had purchased not only on the aircraft market but also their operating businesses on hold, fear of tariffs.
About half of the participants (46%) said that the customer’s interest in buying trade jets had deteriorated since March. Forty percent said that customer interest remained the same and only 10% said that it had improved.
When asked about the impact of tariffs on the demand for new aircraft, 93% of the respondents said that this will negatively impact the demand, expecting a majority that the effect will be important. Only 7% said that he believes that there will be no effect.
For used jets, 67% of the respondents were still pessimistic, expecting a significant or slight negative impact on the demand. A demand for some extent used under one third (27%) is expected to demand.
However, pending law can give business jet manufacturers a shot in hand.
Both Senate and House of Representative have adopted Budget solution Its purpose is to expand the Tax Cuts and Jobs Act. A major provision of TCJA allowed businesses to cut 100% of the eligible equipment purchasing immediately instead of spreading cuts over time. Since 2023, this rate has fallen 20% and was determined to be phased in 2027.
Republican MPs now have the way to increase the rate to 100% and allow the retrospective cut, which is President Donald Trump called for in March. If they succeed in bringing back 100% bonus depreciation, private aircraft will become more attractive than one tax perspective.
