Aircraft brokers can usually tell when the summer solstice has arrived by the lack of aircraft being sold, but, as some had earlier predicted, the historically inactive months of June and July have for many been indistinguishable from any other this year. While the total worldwide jet inventory level treaded water for the last few months, the deal flow has remained constant. In the last couple of years, market observers have seen the worldwide jet supply shrink.
As a group, late-model, current-production aircraft continue in high demand, with less than a 5-percent supply currently available based on their respective production runs. The focus on these aircraft is not surprising given desirable technological improvements, transferable warranties and in many cases compliance with upcoming reduced vertical separation minimums requirements in the U.S.
Among this cluster are a number of models that are in downright low supply, defined as 5 percent or fewer aircraft available based on the total number produced of their respective models. Learjet 45s, of which 252 have been built, are a perfect example, with just seven offerings right now, representing less than 3-percent availability. Challenger 604s just dipped below 5 percent, with 13 of the 287-strong fleet for sale; and a slim 2.3 percent of the Falcon 2000 fleet is up for grabs.
At levels such as these, price stability is beginning to yield to appreciation. Cessna’s Citation Excel, CJ2 and Encore, too, all fall at or below 3-percent availability. The Hawker 800XP, with 18 of 410 for sale, checks in at roughly 4-percent availability, while the GIV-SP is presenting nine, or 3 percent of its fleet, to the used market. The GV sits on the cusp, with 5 percent of its run for sale, while its counterpart, the Global Express, is a percentage-and-a-half lower, with five of its 145 for sale at present. BBJs are tighter still, with just two of 83 currently for sale, or about 2.5 percent.
Sluggishness continues to define many older aircraft, but even here there seems to be a pulse. The GII supply, while not low at 51, is as low as it has been all year. It peaked in late 2002 at 61 units but has not made a dramatic move in either direction since. Of the 214 produced, nearly 25 have been written off since the first one rolled off the line in 1967. (Speaking of the first one, it resides in the Midwest and is still going strong. It appears to be very well cared for and looks great, its period paint scheme contrasting with its winglets and surprisingly low time.) The current GII supply still represents a bloated 27-percent availability.
The GIII too is at a low for the year at 33, down from 39 last December. It reached its high of 49 less than two years ago. Five GIIIs have been lost from the flock over the years, bringing its fleet size down to slightly less than 200. The current used supply translates to roughly 16-percent availability; while that’s high, it is nearly 10 percentage points lower than at its peak.
The Falcon 900B offered many choices a year ago, with more than 20 percent of its fleet for sale. It has since trimmed its offerings, from 26 then to 17 now, for a more reasonable supply of 13 percent. Early 900Bs are gathered around the low- to mid-$15 million area and reach to the upper teens for a late model.
The Lycoming-powered Challenger 600, another large-category model hampered by indifference but showing recent signs of recovery, has lowered availability by a half-dozen units in less than a year, from 30 to 24, but still leaves nearly a 30-percent supply based on the 82 in service. Reduced pricing has no small impact on stimulating market activity. The 600 can now be found priced in the mid-$4 million to $5 million range, with a few still trying for the low $6 millions.
The GE-powered successor, the 601-1A, fares slightly better in terms of supply but is still high at 19-percent availability based on 12 of 64 being for sale. Pricing in the $7- and $8 million range is most common in this group. The 601-3A in May lowered choices to 12 for the first time in three years. It has since increased to 15, or about 11-percent availability based on the 134 produced and in service. That places the model’s supply very close to the 10-percent level often cited as normal. Most are priced between $9 million and $11 million, with a couple of examples on either side of the range, but not indicative of median.
Others hovering around the 10-percent mark include the Falcon 50, Learjet 60 and Cessna Citation V and Ultra and Beechjet 400A. The Falcon 50 recoiled from 51 aircraft 16 months ago to 28 today; and the Learjet 60 qualifies as well, with 27 of its 274 for sale. As the Learjet 60 market tightens, sellers have taken notice and the sub-$6 million supply has diminished. So, too, has the supply of low-price, low-end Falcon 50s, which not too long ago were in abundance in the $5 million area.
The Citation Ultra shed a number of its used stock since last November, when 27 were available. Today, 17 are for sale, bringing the availability down from 10 percent to 6 percent. The predecessor Citation V, which rose to 32 used examples a year ago, has returned to 25, moving the choices closer to 10 percent. The Beechjet 400A moved quickly from more than 50 a year ago to 26 this spring before notching up a few to the current level of 29. This represents about 8 percent of the fleet of 350-plus 400As.
In less than two years the total worldwide jet inventory has slowly distanced itself from its peak and is now down about 12 percent from that level, but every aircraft has its own story to tell. The Learjet 45 has seen a nearly 66-percent retreat from its supply peak within that timeframe, while others have barely moved. As we move toward one of the most active times of the year, many are forecasting a further tightening of the market, which could translate into higher prices for the most sought-after aircraft and firming prices perhaps among those that have not yet captured the full attention of buyers.