Private Jet Cancellations Outweighing Orders
By Kelsey Karp
Waiting in line for commercial flights might become the new standard for corporate executives who previously disappeared on their private jets. With the global recession still going strong in 2009, private jet manufacturers predict more cancellations than new orders as individuals tabulate new budgets to reduce costs. While some companies may not see a decline in private jets sales, most companies are already feeling the heat. Cessna announced last week that there were 243 cancellations in the second quarter alone, resulting in a 42 percent drop in revenues for the period. Paris-based manufacturer, Dessault Aviation, has encountered similar frustrations as the amount of sales in their books has declined over $1.6 million due to individuals backing out of orders. In addition to this ongoing list is Canada’s Bombardier, whose cancellations are also currently outnumbering new orders. As the delivery of their airplane emerges, many private jet buyers, who previously did not feel the financial burden of paying for their jet when the order was originally processed, are now struggling to find financing to make their next payment. Credit markets have become increasingly stringent and restrictive as a result of the economy, which does not help in terms of financing. A positive spin to this story is that experts claim that we might see the rate of cancellations slowing down. While many companies are cutting back on employees, Gulfstream Aerospace has retained 2,000 employees as orders surpassed cancellations in the second quarter, a trend that will hopefully continue.
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