Private jet broker Jetcraft has released new research predicting 11,765 pre-owned transactions over the next five years, equating to $61 billion in value, and 3,444 new deliveries, representing $90.5 billion. By 2023, the total market for used and new deliveries will exceed $30 billion annually. Pre-owned business aircraft transactions are expected to outpace those of new deliveries four to one.
“New aircraft unit deliveries are predicted to stay flat throughout the forecast period while generating higher revenues, due to the increase in large aircraft transactions. Meanwhile, the pre-owned market is forecast to grow at a proportionally faster rate than new,” said Jahid Fazal-Karim, owner and chairman of the board of Jetcraft.
He added, “Buyers who in the past exclusively bought new aircraft are now more willing to consider pre-owned if it suits their mission, partly due to better opportunities for aircraft refurbishment and increasing MRO capabilities.”
Overall, the 33-page report outlines the industry’s struggle to recover from the Great Recession.
In 2018, Jetcraft says new and pre-owned sales of private jets reached $26 billion. According to its tracking, there were 2,049 pre-owned aircraft sold last year, up from 1,913 in 2017 and 1,730 in 2016. However, recent growth followed a dip to 1,783 transactions in 2016 from the previous high of 1,914 in 2014. The forecast predicts used private jet transactions will peak in 2021 at 2,452 before falling back to 2,327 and then increasing to 2,426 in 2023.
In terms of new private jets, Jetcraft says there were 3,442 units delivered in the past five years, and its forecast is for 3,444 in the next five years with revenue increasing to $90.5 billion from $80.2 billion.
There were 671 new private jet deliveries in 2018, well below the peak from 2007 to 2009 when there were 978, 1,061, and 911 new business aircraft delivered, respectively.
It shows from a 2008 peak of $19.5 billion in annual sales in 2009 new aircraft deliveries plunged to $14.7 billion in 2011. In 2018, it was just $14.8 billion although they are expected to climb to $17.5 billion this year based on the tilt to bigger, more expensive jets.
Used private jet sales peaked at $13.2 billion in 2007 and dropped as low as $8.4 billion before climbing to $11.3 billion in 2018. What’s more transaction price of used aircraft is projected to remain flat this year at $5.5 million, down from the 2007 peak of $8.4 million.
As of December 31, 2018, the active business aircraft fleet stood at 19,818 with 9.1% of aircraft for sale. Jetcraft believes it will grow to 22,211 with 13.1% for sale by the end of 2023.
In 2018, the top pre-owned models by units sold were the Citation Mustang followed by the Hawker 800XP, Citation Sovereign series, Citation X, Challenger 604, Citation CJ3 series, Challenger 300, Falcon 50 series, Citation Excel and Gulfstream GVI-SP
– Pre-owned transactions are growing at proportionately faster rates than new deliveries
– Growth in the pre-owned value proposition and increased demand for out-of-production aircraft are occurring due to easier, more accessible and less costly refurbishment options
– There continues to be a clear shift underway between the segments in new deliveries – towards large aircraft and away from light jets
– New delivery units are forecast to flatten out as a result of an upcoming economic downturn, while pre-owned transactions continue to grow
– The business aviation fleet is predicted to grow by 12.1% over the next five years
– The average retirement age of a business aircraft is 32 years old
– As new avionics mandates are implemented, 1,051 business aircraft retirements are predicted over the next five years