JETNET LLC, the leading provider of corporate
and commercial aviation intelligence, has released March 2017 and first quarter
2017 results for the pre-owned business jet, business turboprop, helicopter, and
commercial airliner markets.
Generally, inventories are down across the
board, except for business jets! The Business Jet market is the only market to
show an increase (6.7%) in sales transactions.
Commercial turboprops and business turboprops
showed the largest decrease in the for-sale numbers, with 101 and 86 fewer
turboprops, respectively, at the end of the first quarter of 2017 vs. 2016.
Turbine helicopters were the only segment to show an increase in for-sale
numbers, up 18 from 1,461 in March 2016 to 1,479 in March 2017. Across all
aircraft sectors, there were a total of 6,355 or 6.9% fewer aircraft for sale in
the quarterly comparison. Accordingly, Fleet For Sale Percentages for business
jets and business turboprops showed the largest decreases of all market sectors
in the quarterly comparison, of 11.2% (down .5 pt.), and 7.8% (down .7 pt.),
Business jet retail sale transactions showed a
6.7% increase, and are taking less time (21 days) to sell than last year.
However, business turboprops showed a decrease of 9% in sale transactions, and
are also selling in less time (5 days).
Turbine and piston helicopters saw declines in
sale transactions in the first quarter comparisons, at -3.1% and -20.2%. They
took more days to sell, with turbine helicopters taking 56 days, and piston
helicopters 10 days.
Commercial airliners are reported by JETNET in
Table A - Worldwide Trends, and include the numbers for sale for both commercial
jets (including airliners converted to VIP) and commercial turboprop aircraft.
Interestingly, business jets (at 586) and commercial jets (at 454) accounted for
55% of the total full sale transactions (1,883).
are key worldwide trends across all aircraft market segments, comparing March
and 1st quarter of 2017 to March and 1st quarter of 2016.
From this 1st quarter 2017 Market Information
press release going forward, Average Asking Prices can be obtained by contacting
JETNET directly to learn more about the new JETNET Values program, which is
offered as an add-on product.
shows the March-ending changes from 2005 to 2017 for the business jet
in-operation fleet, number for sale, percentage for sale, and the year-over-year
point change (11.2% less 11.7% equals -0.5 point decrease). March 2016 is the
first March-ending period that the percentage for sale and year-over-year points
have increased since March 2009 (highlighted in yellow). Interestingly, the
March 2017 number of aircraft for sale (2,370) is nearly the same as that for
March 2014 (2,369), but with the increase in the in-operation fleet the
percentage for sale is much lower (11.2% vs. 12.1%).
In 2009, as the recession struck, there was an
explosion of 62% - or 1,095 - more business jets listed for sale compared to the
year prior. What then followed was a six-year trend toward recovery, as the
market steadily shed inventory and moved closer to again being a healthy
“seller’s market”. While this decrease in units for sale is a far cry from the
pronounced spike of 2009, the 1st quarter of 2017 - at 11.2% the lowest since
2005 - must be regarded as a positive step in the direction of a stabilized
inventory for sale.
Pre-Owned Full Retail Sale Transaction Trends
In total, there were 37 (6.7%) more business
jet transactions in the first quarter of 2017 than the first quarter of 2016.
The comparisons in Table C
illustrate where the changes occurred by aircraft weight group.
The results were mixed by weight class when
comparing the first quarters of 2017 and 2016. While the light jet weight class
accounts for 38% (220 out of 586) of the total sale transactions, its change in
the quarterly comparison showed a difference of only 2 more transactions. Also,
the VLJ (10,000 lbs. or less) class was the only weight class to show a decline.
The heavy (35,000+ lbs.) segment showed the largest increase in full retail sale
transactions, up by 25 units (or 15.1%). At 191 total sales, this segment
accounted for fully a third of all pre- owned retail jet transactions in Q1
From 1950 to 2000, U.S. economic growth as
measured by GDP averaged 3.6% annually. But since 2000, GDP growth has been cut
by half to 1.7%. Meanwhile, the world economy has been slowing down, and the
expected recovery is rather shallow and surrounded by risks. Global GDP growth
is expected to have reached a low point in 2016, and is projected to strengthen
this year and next. Growth is projected to pick up gradually from 3.2% in 2016
to 3.7% in 2017 and 3.9% in 2018.
When the U.S. GDP is 3.0% or higher growth,
business aviation does very well. Table
D shows the U.S. GDP by year from 2000
to 2016. The years 2000, 2004, and 2005 were the only years that the U.S. GDP
growth rate was 3.0% or greater annually (highlighted in yellow). While
the economy certainly seems stronger than it did last year, gross domestic
product growth remains sluggish, with 2016 GDP growth at 1.6%, down from 2.6% in
Real gross domestic product - the output of
goods and services produced by labor and property located in the United States -
increased at an annual rate of 0.7% in the first quarter (that is, from the
fourth quarter of 2016 to the first quarter of 2017), according to the “advance
estimate” released by the Bureau of Economic Analysis (BEA). Accordingly, the
first quarter of 2017 is off to a slow start, but the year is young.