At nearly the halfway point, this year continues to build on what has been an 18-month-long trend of lower pre-owned inventory and stabilizing prices among most models, especially late-model and current-production aircraft. In late 2002, pre-owned inventory rose above 2,050 units and has since backed off to 1,814, roughly a 12-percent decline.
“Beechcraft and Hawker owners can now find parts for their aircraft anywhere in the world with the click of a mouse,” says Raytheon Aircraft of its expanded worldwide inventory network (WIN). WIN provides access to the entire parts inventory of Raytheon Aircraft and all its distributors and service centers. Previously, only customer-support representatives could view the parts inventory under the WIN program.
Bill Brown, president of global customer support for Hawker Beechcraft, arrived at the NBAA Convention with a renewed sense of enthusiasm following the sale of the company by defense contractor Raytheon to investors Goldman Sachs and Onex Capital Partners. That type of transaction isn’t always a reason for optimism, but in case of the Wichita manufacturer, the future is looking bright.
“Today, 13 percent of all the world’s business jets are based in Europe,” said Larry Flynn, Gulfstream president for product support. “This is our largest market outside the United States. As such, we have ramped up our parts inventory to ensure our European operators as well as transient operators in Europe receive the parts they need, when they need them.”
The Russians are coming, the Russians are coming! The movie title of 41 years ago seems fitting to describe at least the perception of what is contributing to the current uptick in the large-cabin segment of the used aircraft market. Tales of aircraft selling to Russians at extraordinarily high prices have begun to capture the attention of the market.
Since the pre-owned market began to back off from its massive inventory figure nearly a year-and-a-half ago, much focus has been given to the movers, which for the most part have been just about every late-model current-production aircraft. In contrast, several model types have yet to experience much reduction in inventory. In fact, some are bucking the overall trend, highlighting the dichotomy among model types.
When Paul Fulchino became Aviall’s chairman, president and CEO in December 1999, annual sales for the 70-year-old Dallas parts distributor were growing at a predictable and respectable rate. Back then, end-of-year sales totaled $371.9 million, with net earnings of $9.7 million.
Resembling a turbine engine, the pre-owned market in the first quarter of last year sucked wind. What a difference a year makes. All of a sudden everyone needs a corporate jet, demand that is pushing inventory levels of pre-owned stock lower and delivery dates of many new aircraft out farther. There are about 50 fewer aircraft available today than there were this time last year.
Buyers continued to roll up their sleeves and involve themselves with the used aircraft market, driving down further what has been for the last few years a vast supply inventory. The 10-percent depletion in used aircraft inventory over the last 13 months has taken a step toward assuaging the doubts of many left shell-shocked by nearly three years of market malaise.
Aviall Services (Booth No. 1437), a provider of aftermarket parts and services, reports that its Logistics and Inventory Flight Team (LIFT) program launched last fall is proving popular with customers. The goal of the LIFT program, which provides custom inventory and logistics solutions to individual helicopter operators, is to help those operators lower direct operating costs based on their individual needs.