We believe the global economic slowdown and tight credit markets are causing a fairly rapid deterioration in the business aviation market, resulting in order cancellations and deferrals. Therefore, we expect deliveries of new Cessna business jets to decline to around 375 in 2009 from 467 in 2008. Segment margins will likely decline to around 10%-12% from 16% in 2008, due to the lower volumes and a higher proportion of lower-margin aircraft, especially the Mustang very light jet. The company is taking actions to mitigate the lower profitability at Cessna, including reducing headcount and R&D spending. Backlog totaled $14.5 billion at the end of 2008, but net orders in 2009 will be much below recent levels and likely below deliveries.Sphere: Related Content Print this post
Tuesday, March 17, 2009
Posted by Tyler Durden at 3:15 PM
S&P earlier downgraded Textron and Textron Financial to BBB- which was not at all surprising. However, an amusing tidbit in their report presents just how ingrained the sentiment against private jets is: if the ultimate lagging indicator S&P is saying jets are a liability, it may be time to actually splurge for that Dassault you have had your eye on recently.