As Chinese Buy More Used Jets, What Will Be The Impact On The U.S. Charter Market?

As China’s used jet market heats up, how will it impact the U.S. charter market?

By Doug Gollan, April 15, 2017

Half of China’s jet sales are now used private jets, according to reports from the recent ABACE conference held there, a dramatic increase in a country that has been seen as a great home for manufacturers selling new planes. Of course, the key question for the North American on-demand private jet charter market is, what will be the impact here?

While jet sellers say the trend towards buying used jets is in part an attempt by Super Rich Chinese to be less flashy, it is also a boost for the stagnant market of second-hand planes.
“You can still get a Gulfstream G550 for around $50 million for a new one (or) you can get an extremely adequate jet for $30 million,” noted JetCraft Asia president David Dixon. The fleet of private jets in China has grown from 67 in 2007 to 480 today.
In the U.S., while there are over 7,000 private aircraft that are Part 135, the core fleet is really around 2,000, according to most brokers. Those planes make up the jets in the best condition, relatively new and “charter-friendly,” meaning easy owner approvals and crews ready to go. This part of the fleet is generally in relatively high demand, but several executives said a good portion of it is for sale. Often these planes represent a second aircraft owned by the same owner, who mainly flies his or her other plane.
A stronger used aircraft market in China could impact this part of the fleet. What it would mean is that sourcing planes in the on-demand market might become more challenging, increasing the value of guaranteed hourly rates and availability of prepaid charter and jet card programs.

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