JETNET has released December 2016 and 2016 year-end
results for the pre-owned business jet, business
turboprop, helicopter, and commercial airliner
markets.
Highlighted in Table A (below) are key
worldwide trends across all pre-owned aircraft
market sectors, comparing December 2016 to December
2015, as well as 2016 year-end and comparisons to
2015.
Most
market sectors are showing lower inventory for sale,
with fewer full-sale transactions in 2016 compared
to 2015. The Fleet For Sale percentages for all
market sectors, except for Piston Helicopters, were
lower in the December comparisons, with Business
Jets and Business Turboprops down the most (.5 and
.7 percentage points, respectively).
Across all market sectors, JETNET is reporting 8,278
Full Retail Sale Transactions, including leases, for
2016. Last year, this number was 8,900, a decrease
of 622 - or 7% - transactions. Business Jets were
almost 2,500 transactions in 2016, and when combined
with Commercial Airliners at 1,882 transactions,
accounted for 52% of the total of 8,278 transactions
recorded in 2016.
Business Jets and Business Turboprops are taking
less time to sell (9 days and 22 days, respectively)
than last year. However, there was a 7.3% decrease
in average asking price, and also a 7.3% decrease in
retail sale transactions for Business Jets. There
was a .2% increase in retail sale transactions, with
an increase in asking price of 0.9% for Business
Turboprops.
Pre-owned business jet market 'for sale'
Historically, 2009 was the peak year in terms of
business jets “For Sale” (2,782 aircraft, or 16.3%
of the fleet in December of that year). Since then,
the lowest number of business jets “For Sale” was
2,202 (11% of the fleet) in 2014. The following year
brought an increase (2,359, or 11.5% of the fleet
“For Sale”), and 2016 a minimal decrease again
(2,315, or 11% of the fleet “For Sale”).
As
demonstrated by Chart A (below), the 11%
fleet “For Sale” in 2016 falls within the
pre-recession range of business jets “For Sale”, and
is no longer regarded as being a high inventory
level relative to the number of business jets in
operation. Having reviewed the market going back to
2005, the global business jet inventory has not
dipped below 10%, which as a rule of thumb has
traditionally separated buyer’s and seller’s markets
based on supply and demand. (Of course, the 10% rule
of thumb applies on a model-by-model level, too).
Will
we see a seller’s market (below 10%) in 2017? For
that to occur, there would need to be a reduction of
more than 200 business jets “For Sale”, or a similar
reduction in the number of business jets in
operation (which could be obtained by aircraft being
retired).
Pre-owned business jet market full retail sale
transactions, including leases
2016
Full Retail Sale transactions, including leases
(recorded as of January 30, 2017), dropped to 2,442,
or -7.3%,
ending six consecutive years of increases, as shown
in Chart B. This is perhaps a sign that the
pre-owned market is changing direction, with higher
inventories for sale, and fewer sales. The drop is
193 fewer business jet transactions, compared to
2015. As noted previously, all market sectors showed
fewer Full Retail Sale transactions, including
leases, in 2016 compared to 2015, except for
Business Turboprops, which increased slightly (by
0.2%).
Pre-owned business jet market by weight class
As
shown in Table B (below), there were
across-the-board reductions in all business jet
transactions by weight class, totaling
-193,
or -7.3%,
in 2016 compared to 2015. The Heavy weight class
led, with 81 (8.9%) fewer transactions, followed by
the Medium weight class, with 56 (8.2%) fewer
transactions in 2016 compared to 2015. Also, the
Light weight class had the largest number of
transactions in 2016: 862, or 35% of the total of
2,442.
Summary
The
recovery in business aviation during the
post-recession period has been underwhelming. Now
that 2017 is here, we hope the U.S. Pre-Owned
market, along with improvements in the world
economy, will continue to push more new aircraft
purchases in the new year. As for now, it continues
to be a buyer’s market environment, with Pre-Owned
For Sale inventories running at 11%.
For more information on JETNET LLC log on to
jetnet.com or contact Michael Chase, 214-226-9882
mike@jetnet.com or contact Paul Cardarelli, JETNET
Vice President of Sales, at 800-553-8638 (USA) or
paul@jetnet.com; International inquiries, contact
Karim Derbala, JETNET Managing Director of Global
Sales , at 41.0.43.243.7056 or karim@jetnet.com.
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