Market activity in the first quarter saw inventory hold steady at multi-year lows, with an equal number of aircraft coming onto and leaving the market. Buying activity generally accelerates in the spring quarter, and this year’s set-up seems to be no exception, with brokers reporting brisk sales action. Despite the tightening there’s quite a bit of head scratching about why prices haven’t reacted more positively.
With the exception of the light jets sector in Europe, demand for private and executive charter flights is holding up fairly well, according to the latest data from online charter portal Avinode. Demand for midsize and large-cabin jets in Europe on November 4 was, respectively, 42 and 74 points above where it had been a month earlier, based on Avinode’s forward-looking demand index, which projects anticipated demand for the next 30 days. Light jet demand was 70 points down over the same period.
Bedford, Mass.-based Jet Advisors is offering a new tool, dubbed the Private Jet Index, to support the aircraft-selection process by ranking and statistically scoring more than 30 parameters. Company president Kevin O’Leary said the patent-pending index also considers the needs and wants of each individual buyer and then weighs the aircraft scores accordingly.
With one quarter of the year in the rear-view mirror, the pre-owned market enters one of its historically busier quarters, and with some key economic indicators showing improvement, this year may be setting up to be busier than many recent ones. So many aircraft values have done nothing but fall for nearly five years. Now some are showing signs of resisting that perennial trend. A number of segments continue to edge ever closer toward right pricing, but others have fallen so far that they are beginning to move quickly.
The scale and value of anticipated charter bookings for the rest of January and into early next month has taken a predictable dip after the busy Christmas and New Year period.
Demand for charter flights has climbed steeply, seemingly in anticipation of the year-end holiday season, according to the latest data from online charter portal Avinode. As of December 1, the company’s forward-looking demand index for the following 30 days stood at 241.78, almost 95 points above where it had been on November 1. This was also almost 42 points higher year-over-year.
Adverse oil prices and cut-throat rivalry have left airlines scrambling to limit losses with the increasingly attractive option of jet-fuel hedging. Although a complex exercise, hedging essentially involves locking in a forward fixed price, allowing an increasing number of airlines to avoid surprises from unforeseen cost fluctuations. Today, jet-fuel hedgers trade contracts in Singapore, Rotterdam, the U.S. Gulf Coast or New York, as well as crude and heating oil or gas oil in London and New York, the two most liquid swaps and options markets.
Forecasted demand for charter flights this month is up on a year-over-year basis but lower than last month, according to the latest data from online charter portal Avinode. At 158.54, the company’s forward-looking demand index for the 30-day period beginning October 1 was almost 12 points down on where it was on September 1. Nonetheless, the index was still 40 points above this time last year, suggesting that a gradual long-term recovery is continuing.
Summer is typically a time the pre-owned market experiences a seasonal bump in inventory, as buyers are out using their jets to get to their favorite summer destinations and aren’t necessarily thinking of buying. This year, however, has been somewhat uncharacteristic and today’s supply of used jets is just about where it was when the year began. The lack of any wild gyrations could be a welcome sign of stability.
Futures Day at Farnborough International 2012 on Friday, July 13, is expected to see more than 10,000 young people, aged 11 to 21, being hosted for a full day of visits and activities intended to inspire them to pursue careers in the aerospace industry. A careers fair with conferences, seminars, learning activities and interactive experiences will highlight Futures Day.
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