Do U.S. Elections Have Aviation Markets in a Stall?
Recent activity since the middle of September, especially in the large cabin markets, has been lukewarm at best. While this is not exclusively a domestic (U.S.) phenomenon, some within the aviation community, especially brokers and sales analysts, see a very close similarity to 2010 when U.S. mid-term elections produced similar temporary weakness in large cabin markets.
The aviation markets are no different than the financial or real estate markets or others. Markets do not like uncertainty and such conditions create strong impediments to business planning and in our case, the acquisition of a large complex multi-million dollar asset. In 2010 we saw an immediate retreat from the large cabin marketplace a few months prior to the mid-term elections.
Businesses and private wealthy individuals simply would not make large asset purchases without a clear picture of which party would be piloting the political and business landscape. We strongly believe that recent weakness in the large cabin markets is mirroring 2010. The good news is that this will only be temporary and if 2010 is any indication it may not pass prior to the election outcome.
Though a pro-business and pro-business jet administration is clearly preferable, the main component to regenerate activity is removing uncertainty. As in 2010 it will be less about who wins and more about clearing up the uncertainty so business planning can take place. We believe that the NBAA convention, scheduled for the end of October and only a few days removed from the U.S. Presidential election, will provide strong impetus to spur increased sales of large cabin aircraft heading into 2013.