Pre-owned business jet inventories to rise, predicts ALTEA 

Pre-owned business jet inventories will continue to rise while transactions and flight activity will both fall, predicts aviation consultancy ALTEA. Its forecasts are based on JETNET data and its own research.

The firm’s preliminary data from December last year suggested that more pre-owned business jets will come to market over the next 12 months (time period), said Jean Sémiramoth, partner, ALTEA.

Available inventory has grown from more than 1,175 units at the end of December 2022 to 1,325 at the end of April 2023, according to JETNET data. It is slow but steady growth, a trend that will continue, predicts the consultancy.  Further disruption in the banking sector could accelerate the trend.

In terms of transactions, there has been a mild shift whereby market conditions favour sellers a little less without moving to a buyer’s market, according to Sémiramoth. “In this “new normal”, more buyers are paying further attention to the condition of aircraft and matters such as damage history, complete records, pre-purchase inspection and delivery conditions,” he said.

Consolidated data also shows a decline in pre-owned transactions. There was a total of 3,560 transactions of pre-owned business jets in 2022, around 14% less than the previous year, with ALTEA expecting this to continue. 

With this, the average number of days aircraft spent on the market is expected to rise, with more sellers lowering their asking prices. According to JETNET data, the average number of days on the market rose from 291 days at the end of December 2022 to 320 by the end of April this year.

As for asking prices, whilst there have been more price reductions than last year, the average asking price of pre-owned business jets has risen, but at a lower rate. “[This is] a clear indication from our perspective of the market normalising and heading to balance,” Sémiramoth said.

Flight activity is predicted to fall too. ALTEA forecasts that some business aviation newcomers would return to airlines as they restore service to pre-Covid levels and above. Sémiramoth said that it may be too soon to know whether this is true. “However, recent reports indicate a small decline in worldwide business jet activity during the first four months of this year compared with the same period last year. So, it will be interesting to scrutinise business jet activity per region going forward,” he added.

Meanwhile, one area to watch is the ultra-long-haul sector; specifically Gulfstream aircraft, especially with deliveries about to begin on its new flagship G700. Andrew Butler, partner, ALTEA said that if the OEM delivers as planned and to the numbers expected, there could be a sharp increase in the availability of both G550 and G650/ER and prices fall.

“Whilst inventories of both types have been relatively stable over the last six months, a concerted effort to deliver G700 aircraft (given certification delays) could bring a change in this sector,” said Butler. “We recall that the numbers of G550 aircraft coming to market escalated once G650 deliveries began in earnest (an availability increase of over 300%), so we might see a similar occurrence in the market again – this time potentially affecting the G650/ER types.”