FAA’s January takeoff and landing data that shows a continued recovery in business jet traffic, with the 14th consecutive year-over-year positive month, up 4.1%, says Morgan Stanley’s Aerospace & Defense report.

“December 2009 saw the first positive year-over-year growth after 25 months of declines and marked the beginning of the current recovery in business jet traffic trends,” writes analyst Heidi Wood. “Moving forward, we continue to expect strong growth, with year-over-year gains moderating as the year-over-year comparisons get tougher.”

The U.S. business jet traffic recovery appears under way, with both Cessna and Bombardier posting 14 consecutive months of positive year-over-year growth versus 15 for Gulfstream, reinforcing Morgan Stanley’s thesis that a recovery in mid-size jets demand would follow the high-end.

“We look for a recovery at Cessna and Gulfstream with recent company commentary increasing our confidence in an order and delivery rebound over the next several years,” writes Wood. “We conservatively estimate 2011 deliveries approximately 30% and approximately 80% of 2008 peak deliveries at Cessna and Gulfstream respectively, with top-line and margin upside should business jet demand recover faster than expected.”