What’s not clear is whether demand for piston airplanes is significantly down or whether manufacturers are playing it conservatively, reducing production in anticipation of reduced demand. It could be that the manufacturers have learned a thing or two from previous economic slow downs when they didn’t reduce production rates quickly enough and found themselves awash in high-priced inventory.
In looking at the economic situation I wonder how many pilots not making planned aircraft purchases are doing so because they truly can no longer afford or qualify for the purchase or whether it is simply them being conservative–putting off the purchase until the future becomes more clear.
Complicating the situation is the bonus depreciation credit for aircraft purchases made before year-end. The credit expires at the end of the year. Now, industry officials are debating whether lobbying for an extension of the tax credit as part of a 2009 stimulus package might cause those planning to purchase this year to get the credit to instead wait until later to purchase if the credit is still available next year. They’d like the orders this year and to also have the credit for next year. If push comes to shove, they’d probably rather have the stimulus package for next year even if it means some delayed sales for now.
What do you think? Has the economic situation caused you to cancel an aircraft order or has anyone you know canceled an order? What will be the impact of the economy on aircraft sales?
Tags: Tom Haines