HJG: Gulfstream Preowned Supply Nearing All-time High

 - October 26, 2020, 11:50 AM

The supply of many preowned Gulfstream models is nearing an all-time high, according to aircraft brokerage Hagerty Jet Group (HJG). In the third quarter, 24 Gulfstream G650 flagships were for sale, compared with just 11 at the end of 2018, HJG reported. In the quarter, the supply of available G550s had increased to 48 versus 20 at the beginning of 2019, while 17 G280s were available, compared with two in the fourth quarter of 2018.

Certain deals cleared out some of the G550 inventory, as well as for the GV and G200, the broker acknowledged but said it believed this will be short-lived. “We expect supply to continue to increase across all models in the next six months.”

The number of transactions was stable or up for some models quarter-over-quarter, it said. At the same time, published ask prices continued to fall, tumbling 3.5 percent to 13 percent.

There is a demand for business jets, but HJG does not believe values will increase after the pandemic, it said. “In the past 10 years, we have only seen aircraft values go down except for in 2011 and again in 2018…Unless we have some kind of broad global economic recovery in the next 12 months, we can expect values to remain flat or decrease.”

HJG also noted Gulfstream has said it remains active but wondered if the OEM can compete against the softened value of the preowned markets without discounting heavily. “Luckily…backlogs were strong prior to the pandemic. Most OEMs plan to deliver about 80 percent of their anticipated order book in 2020.”