Private jet brokers are bullish despite signs of softening

Used private jet prices for newer aircraft are holding up while older vintages have declined by as much as 20%.

By Doug Gollan, October 25, 2023

A trade group of private jet brokers is providing another data point that business aviation demand is on stable ground despite growing inventories.

Slowing demand has provided questions about whether or not the industry can hold onto the gains it realized during Covid as first-time users turned to private aviation.

The Third Quarter 2023 Market Report released by the International Aircraft Dealers Association (IADA) predicts a significantly larger market going forward.

The report includes hard sales data and the perspectives of IADA’s global members, who know the industry well.

Good News

“The good news is that inventories are expanding, price inflation has slowed if not slightly slipped, and supply chain quirks and bottlenecks are being ironed out industrywide,” said IADA Executive Director Wayne Starling.

He added, “MROs and FBOs are expanding to meet the needs of aging fleets. Those factors coupled with massive new options from fleet buyers could be signals that supply and demand are rebalancing for a larger post-pandemic marketplace.”

According to research from Private Jet Card Comparisons, 95% of flyers who started flying privately after the outset of the pandemic are continuing.

IADA notes, “As the preowned business aircraft market continues to adjust to post-pandemic conditions and a bigger market, the current assessment of the aircraft sales market and six-month outlook have slipped just slightly in the past quarter. The culprits are, in the view of IADA’s survey respondents, today’s higher interest rates, somewhat softer pricing, and lingering concerns about the potential for an economic recession in the U.S.”

Prices for newer preowned private jets are “relatively stable,” according to the group.

However, older, less preferred models have dropped in value by 15-20%.

IADA says aircraft utilization has remained solid, within a few percent of the third quarter of 2022 and well ahead of 2019 levels.

That assessment is in line with tracking from WingX and Argus TraqPak.

IADA deals closed 309 used aircraft deals in Q3, with 257 aircraft sales under contract.

Of that, 66 were sold at a lower-than-asking price.

A further 44 deals fell apart in the quarter.

Meanwhile, its dealers received 116 new acquisition agreements and were retained exclusively to sell 226 aircraft.

YTD Used Private Jet Sales

Year-to-date, IADA’s dealers closed 853 transactions, compared to 929 in the same period in 2022.

The dealers signed 410 new acquisition agreements, compared to 519 in 2022’s first nine months.

There were 191 aircraft sold with lowered prices, compared to 59 in the first nine months of 2022.

Through Q3, 152 deals fell apart through the end of September, compared to 127 in the first three quarters of 2022.

Looking ahead, pricing is expected to reflect slight decreases and supply for sale is predicted to increase slightly across all categories.

Demand projections are expected to be stable for turboprops and light jets, with stable to slightly decreased demand for mid and larger-size jets.

‘Great opportunities’

“Q4 will offer buyers some great opportunities as the market continues to normalize. Current tax benefits are another reason to consider a Q4 purchase,” says Holstein Aviation’s Sean Holstein.

At the same time, Andy Toy of Axiom Aviation notes, “Our acquisition business has increased 60% this year. Many buyers are looking to upgrade from their current aircraft.”

According to Absolute Aviation’s Mike Clark, Caravans, Sovereigns, and Falcon 900 and 2000 models still sell for a premium.

Still, Rollie Vincent of Rolland Vincent Associates and publisher of the JetNetIQ report notes opposing objectives across the negotiating table.

Vincent says, “Buyers will be anticipating low prices, but sellers who bought at a premium in the past three-plus years will be hesitant to take a loss in the exchange.”

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