Bizjet Prices Surge, Surpassing Aircraft Valuations

 - February 22, 2022, 12:46 PM
Preowned Gulfstream prices have surged 41 percent over the past year, in part due to demand for the out-of-production G450. (Photo: Gulfstream Aerospace)

With preowned aircraft inventories hovering at historic lows of 1.3 percent, asking prices continue to increase, rising 11 percent year-over-year, according to market analyst Jefferies Aerospace & Defense Electronics. Some brands are seeing prices skyrocket, led by Gulfstream, which is up 41 percent based on the strength of sales involving the G450 and G150, according to Jefferies.

Using Amstat data, Jefferies has introduced monthly research that tracks pricing fundamental for business jets. It noted that the estimated valuation of the preowned inventory is up 4 percent from February 2021. The aircraft valuation is based on average selling price adjusted for typical premiums and/or discounts, age of aircraft, upgrades, engine plans, and usage, providing an estimate for what the sales price of an aircraft should be. With regard to valuations, Gulfstream is leading the increase with the G280 and G650, each up 26 percent, while the G550 rose 29 percent.

Asking prices, however, are currently mismatched, up 13 percent over the average fleet valuation. This dynamic crosses most of the fleets with the exception of Dassault. “Embraer and Gulfstream ask prices in the used sales market appear to have the largest disconnect relative to estimated valuation with prices 28 percent and 27 percent higher,” the analyst reported. “Bombardier and Cessna average used market prices are 7 percent and 6 percent above estimated valuation...Dassault is relatively in line.”