July 11, 2024
The International Aircraft Dealers Association says inventory is increasing, and prices for used private jets are rationalizing.
The association representing brokers of preowned private jets says members are seeing “some replenishment of inventory levels and a return to more rational pricing and valuations amid an environment of continuing customer interest and inquiries.”
Members of the International Aircraft Dealers Association dealers closed 239 transactions in the first quarter of 2023.
That compares to 288 deals in the same period in 2022. There were 213 in the first quarter of 2021.
IADA dealers ended the first quarter with 197 aircraft under contract, compared to 259 a year ago and 248 in the first quarter of 2021.
The preowned private jet dealers group said 52 of its first quarter 2023 transactions experienced lowered prices, while only six did the same period a year ago and 27 in the first quarter of 2021.
“There is evidence that demand and supply forces are rebalancing, with less frenetic activity, more realistic pricing, and a slow but steady buildup of available inventory,” says IADA Chair Zipporah Marmor, Vice President of Transactions for ACASS in Montreal.
He adds, “Although specific low-time aircraft with attractive pedigrees continue to attract top-dollar, the overall market has begun to downshift from a peak characterized by accelerating prices and strong residual values,” she added.
“Although pre-owned inventory levels have begun to slowly replenish, most OEMs have grown their order backlogs to represent more than two years of production, and they are straining to accelerate deliveries in the face of slowly recovering supply chains,” notes IADA Executive Director Wayne Starling.
He adds, “Our organization foresees a continuation of relatively tight market conditions through 2023, driven by customers who cannot or will not wait two or more years to receive their next aircraft.”
IADA dealers add their perspectives.
“Pre-owned buyers are expecting significant price reductions, but inventory remains low, especially on late-model aircraft,” says Robert Sammartino of Skytech, Inc. in Westminster, Maryland.
“I don’t expect any large swings in inventory or demand; I believe that the used market will, however, remain strong all throughout this year,” says Jeremy Cox of JetValues Jeremy from Waterloo, Illinois.
Todd Spangler of Jetcraft in London adds it is “still low inventory and a seller’s market. Buyers (are) being more cautious but still active.”
Meanwhile, Bryon Mobley of Wetzel Aviation, Inc. in Englewood, Colorado, says, “(The) feeding frenzy is over. The market has slowed to a balanced pace, yet with lots of inquiries and activity. Inventory is limited, but not like last year.”
Frank Janik of Leading Edge Aviation Solutions in Parsippany, New Jersey, looks to the big picture. He says, “Some buyers are on hold due to macroeconomic uncertainties, and they believe that prices will continue to soften in 2023. Barring a major recession or major equity market correction, I expect prices to continue to trend down.”
“What we are seeing right now is a lot of wait-and-see. Sellers have not caught up yet with the reality of the market, whereas buyers feel that values will still decline,” adds Marmor of ACASS.
