Business jet makers will be bolstered by lower U.S. tax rates, says association
MONTREAL — The U.S. government’s plan to cut corporate taxes will bolster the business jet industry which last year had its weakest performance since 2004, an association representing the sector said Wednesday.
“It will be a good shot in the arm for the industry,” said Pete Bunce, CEO of the General Aviation Manufacturers Association.
With 62 per cent of business jet sales coming from North America last year, he said President Donald Trump’s plan to reduce corporate taxes to as low as 15 per cent could spur spending on aircraft.
Bunce declined however to say if such moves could offset the possible introduction of a border adjustment tax that would raise the cost of items imported into the U.S.
He said legislative process means that such a proposal could end up being very different from what is being discussed.
Bunce made the comments during a news conference in Washington, D.C., on the state of the aerospace industry.
Bombardier (TSX:BBD.B) bucked the industry trend by increasing business jet deliveries last year, according to the group’s annual survey.
The Montreal-based company shipped 163 aircraft, valued at US$5.87 billion compared with 135 aircraft valued at US$5.06 billion in 2015.
Rival Gulfstream fell behind Bombardier as deliveries dropped 25 per cent to 115 aircraft, from 154 a year earlier. The U.S. company’s billings fell 24 per cent to US$6.2 billion.
Aerospace manufacturers delivered 661 business jets of various sizes last year, down 7.9 per cent from 718 in 2015.
“The 2016 year-end results were disappointing overall, although we did see some blue sky in the turboprop sector,” Bunce said in a statement.
He added that the sector’s outlook is strong as companies are investing to introduce new products.
Bombardier has received a C$372.5-million loan from the Canadian government, with two-thirds going towards its new Global 7000 aircraft slated to enter into service late next year.
Ross Marowits, The Canadian Press
This news article is kindly supported by the Voice of English-speaking Québec 2017 SpringFest 5 @ 7.
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