The long-awaited recovery of business jet deliveries in North America, the largest market in the world, is underway. The engine for this growth is the United States, which historically has constituted more than half of yearly new deliveries. As the U.S. economy continues to improve and a long-delayed replacement cycle in corporate fleets gains traction, new jet deliveries in the U.S. will trend upward. These observations and more are from Mike Kahmann, Group Head and Managing Director, CIT Business Aircraft Finance, a division of CIT Group Inc. in “Ready for Takeoff - Business Aircraft Financing”, the latest piece of market intelligence in the CIT Executive Spotlight (cit.com/executivespotlight) series of in-depth executive Q&As.

“We’re also seeing the long-awaited delivery of new products that’s further driving growth in the sector,” said Kahmann. “Several of the original equipment manufacturers (OEMs) have either announced or are delivering ‘clean sheet,’ or newly enhanced aircraft. We think that overall, this vote of confidence on the part of the OEMs is a reflection of good long-term growth potential for this business.”

According to Kahmann, the following factors are also contributing to the positive trend in the business aircraft sector:

• The introduction of new products and technologies should impact the market: The new technologies in the cockpit that help reduce pilot workload and improve operating efficiency are something that aviation buyers seek. Nearly every OEM has a robust pipeline of new product introductions that employ new technologies that should come to market by 2018. This new technology roll-out is creating demand in the industry.

• Declining fuel prices will have a net positive affect on business aircraft demand: As fuel costs dip, it becomes less expensive to fly, which in turn means flight hours should increase. When flight hours increase, that usually feeds directly into business aircraft demand. Lower fuel prices should also benefit used aircraft values since one of the big differentiators between an older airplane and a newer airplane is fuel efficiency.

• The future for ultra-long-range aircraft is good: Although trans-oceanic flight range may not be necessary for every hop, the fact remains that owners want an airplane that has the necessary range to get to various parts of the world without needing to land and refuel. To this point we’re seeing customers opting for aircraft based on their longest-segment mission – not their average segment.

• The outlook for 2015 is positive: The improving economic picture in North America – the largest market for this industry – should have a positive effect on the 2015 business jet outlook. Additionally, used aircraft inventories are returning to levels that are consistent with more stable pricing and a better used aircraft market.