In its latest Business Jet Update released yesterday, UBS Investment Research predicts 8- to 10-percent growth in bizjet flight activity for the coming year, with a 12- to 14-percent increase in movements for the first half of next year, based on recent trends.
As used aircraft values got pummeled over the last few quarters, it seemed that the buyers had all but disappeared. They hadn’t. Now that the inventory of most model types is at unprecedented highs and prices are at unprecedented lows, buyers are reemerging in more noticeable numbers and scoring big time on CJs to G550s, often executing a trade some 30- to 50-percent below the prices accepted at this time last year.
The flow of used aircraft to the market is slowing fairly dramatically, and some may wonder if that’s because all the aircraft for sale are already on the market. It might seem that way to some, but the more than 3,000 aircraft for sale right now–while not an insignificant number–represent only a fraction of the more than 16,500 jets currently in operation.
After a grueling quarter of massive price destruction, a wave of opportunistic buyers has begun to surface and infiltrate the pre-owned jet market. The current economic environment coupled with the public flogging of private jets and their owners has created a sea of discounted jets in all shapes and sizes. There is a growing perception by many that now is the time to buy.
The used business jet market has not yet reached equilibrium. That was the general consensus among industry experts at the National Aircraft Resale Association (NARA) forum in Dallas at the end of February.
It is the best of times to purchase a business jet…and the worst of times to finance it. That was the message to the 23 attendees at the ninth annual Conklin & de Decker Aircraft Acquisition Planning seminar, held recently in Scottsdale, Ariz.
The standoff between buyers and sellers over the last six months is beginning to show some wear. It seems that sellers had been concentrating on where prices were six months ago, as buyers were predicting where they would be six months forward. The dichotomy in perspectives aided in slowing transactions to a crawl.
Regional fractional share operator Executive AirShare (EAS) announced that it will be selling Phenom 100 shares for $299,500 for a one-sixteenth share with 20 days/50 flight hours per year. Quarter shares cost $1.18 million and include 80 days/200 hours per year.
The pre-owned market this year has been buoyed somewhat by a continuing flurry of international buying activity coupled with new aircraft backlogs, which by all accounts are full for years to come. That doesn’t mean this segment is immune to cyclical price corrections, such as the one it is experiencing now. Any aircraft will sell.
While most companies here at NBAA’08 are showcasing airplanes and aircraft parts, Jet Support Services–JSSI (Booth No. 2229)–is displaying a different form of transportation: a 2009 Saturn Sky convertible, the grand prize for the lucky winner of the company’s “Sky’s the Limit” sweepstakes. The randomly selected winner will be announced this afternoon at 3 p.m. at the company’s booth.