Preowned Business Aircraft Values Fall 15% in Covid Era

 - June 18, 2020, 11:08 AM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

Average and median values of preowned business aircraft have fallen 10 to 15 percent so far during the pandemic, with some individual makes and models experiencing decreases exceeding 20 percent, according to a report released yesterday by Amstat. Fortunately, the business aviation market research information and services firm said some market segments are now seeing a slowing of value decline.

Preowned inventories have increased since mid‐March, but this is a continuation of an existing trend, Amstat said. Inventory of used business jets rose 1.6 percent between January and March and then further climbed 4.2 percent since mid‐March. Business turboprop inventory was largely unchanged between January and March, but grew 2.8 percent from March to May.

However, the company noted, inventory levels still remain below 2016 levels and significantly below 2009 levels. “While up, inventories are not indicating a panic to sell and levels remain below recent highs seen in 2017,” said Amstat general manager Andrew Young.

Resale retail transactions for business jets had been ahead of 2019 levels in January and February, but were down 23 percent and 40 percent in March and April, respectively. Similarly, Amstat said turboprop transactions were at or ahead of 2019 levels in January and February and then fell 27 percent and 40 percent in March and April, respectively.

“It remains to be seen whether the trends of the last few months will continue long‐term,” said Young. “However, whether the result of a Covid‐19-driven reduction in travel or the logistical issues surrounding getting deals done under quarantine, or both, there was a year‐over‐year reduction in resale transactions in March and April this year. Further, the analytics clearly show a reduction in estimated aircraft values.”

He added that if inventory levels remain relatively low and interest in business aviation materializes as an alternative to commercial travel in parallel with an economic recovery, “Then we might expect to see a significant uptick in transaction activity leading to a recovery in aircraft values in the coming months.”