Rockwell Collins Sees Business-Jet Rebound Sliding to ’16

The slump in business-jet sales since the 2008 global recession probably will last into 2016 as corporate buyers wait for their businesses to rebound, Rockwell Collins Inc. Chief Executive Officer Kelly Ortberg said.

Jet manufacturers and suppliers like Rockwell Collins are seeing tepid sales of smaller private aircraft in part because the economic recovery has been driven by cost cuts, not sales growth, Ortberg said in a telephone interview today.

Business-jet shipments fell 2.1 percent for the first nine months of 2013 from a year earlier, according to data compiled by the General Aviation Manufacturers Association trade group. Ortberg said smaller companies, whose purchases typically drive that market segment, are refurbishing older planes and won’t begin placing new orders until they see robust revenue gains.

“I don’t think it can go down any further,” said Ortberg, whose Cedar Rapids, Iowa-based company makes avionics and cabin equipment for business-jet manufacturers including Textron Inc. (TXT), Bombardier Inc. and Dassault Aviation SA. “We’re at a low level of sustained production. I think we’ll stay at that low level.”

Rockwell Collins stands to gain sales as jet owners update information technology and entertainment systems on older aircraft, Ortberg said. He said he also expects to see sales rebound after the debut of new models such as Bombardier’s Learjet 85, which missed a target to enter service in 2013.

Rockwell Collins rose 0.9 percent to $78.26 at 11:54 a.m. in New York after reporting a first-quarter profit of 96 cents a share, beating analysts’ average estimate of 94 cents. Annual profit will be $4.35 to $4.55 a share as U.S. government sales rise, topping a forecast of $4.30 to $4.50, the company said.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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