FW: Bizjets: NBAA Confirms Market Hasn't Slowed, Could Be Overheating

• Overwhelmingly bullish: Tone of NBAA was overwhelmingly bullish as we struggled to find anyone that had anything negative to say about the market. Those we spoke with hadn’t seen any slowing related to August stock/credit market weakness and do not believe availability of credit or customer creditworthiness are issues for the industry.
• International to drive market higher: Unlike last year when many we spoke with thought the peak was near, most now think the market can move higher, even contemplating U.S. slowing, on further gains in international markets, particularly Western Europe, Russia and Middle East.
• But is market overheating?: There were some indications that the market is overheated with some used long range aircraft selling for 20%+ more than when new five or more years ago. One industry contact did note buyers have started to balk at such high used prices. Industry participants also noted increasing amount of speculative interest even as manufacturers try to discourage flipping delivery slots (bigger deposits, etc.).
• Modest show for orders/launches: While the show was extremely busy, it was relatively modest in terms of orders as compared to prior years and there were no meaningful product launches. Most notable announcement was Rockwell Collins’ launch of its new Pro Line Fusion cockpit and first long range product win (Bombardier).

Please see our full note attached.

Best,
David

<<NBAA_092807.pdf>>
David Strauss
UBS Investment Research
U.S. Aerospace & Defense
(212) 713-6185
david.strauss@ubs.com