* Index remains at 50: Our March Business Jet Index came in at 50, indicative of a stable market and in line with our prior survey from January following increases in each of our previous eight surveys. While our Index continues to reflect a stable market, our straight up measure of absolute business conditions moved modestly lower this time, the first decline in a year and indicative of a slight degradation in market conditions.

* Used inventories hold steady: Available for sale business jet inventories were roughly unchanged in February following declines in each of the prior six months. While available inventories are now 8% below the May peak, they still represent 15% of the installed base, well above the historical average at 12-13%. Young available for sale aircraft (0-10 years old) were also roughly unchanged and remain 17% below the April peak.

* Cycles sequentially lower in February: We estimate business jet cycles (takeoffs & landings) in February were 14% higher from the prior year, an improvement from 11% growth seen in the prior month on an easier y/y comp. However, on a seasonally adjusted sequential basis, cycles declined by 1% this time, the second straight decline following the recent run-up.

* Prefer GD/COL: Our Buy rating on GD reflects an improved defense risk profile and stabilization in our bizjet survey, with particular strength at the high end. Our Neutral rating on TXT reflects concerns over the shape of the recovery at Cessna, given significant oversupply, fractional weakness, and increased competition at the low-mid end (Embraer). Of the suppliers, Buy rated COL is our preferred play on business jets.

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