Business Aviation News

ALTEA Forecasts Rise In Pre-Owned Business Jet Inventories

ALTEA Forecasts Rise In Pre-Owned Business Jet Inventories

ALTEA, the business aviation industry analyst firm, has forecast that inventories for pre-owned business jets will continue to rise, while flight activity and transactions will fall.

According to JETNET data analyzed by ALTEA, the inventory for pre-owned aircraft available globally grew from 1,175 units at the end of December 2022 to 1,325 at the end of April 2023. This is a “slow – yet steady” growth trend according to ALTEA, which is forecasting this trend to continue throughout 2023. Further economic shocks, particularly from the banking sector, could accelerate this trend.

JETNET data also showed that pre-owned transactions have slowed down, with the average pre-owned business jet spending 320 days on the market in April 2023, compared with 291 days in December 2022. Despite the increase in transaction time, the average asking price of a pre-owned aircraft has continued to rise, albeit at a slower rate. This has shifted market conditions to favor sellers slightly less, according to ALTEA.

Jean Sémiramoth, Partner, ALTEA described it as the “new normal”, adding that “more buyers are paying further attention to the condition of aircraft and matters such as damage history, complete records, pre-purchase inspection and delivery conditions.”

Transaction volume has also declined year-over-year, with 3,560 transactions taking place in 2022, almost 14% less than the number of transactions in 2021 – a trend ALTEA believes will continue.

ALTEA has identified the ultra-long-haul sector, specifically Gulfstream aircraft, as one that could potentially see a significant change in market dynamics, as Gulfstream prepares for the first deliveries of its new G700 aircraft.

“If the OEM is able to deliver as planned and to the numbers expected – then we could see the availability of both G550 and G650/ER increase and prices begin to fall. Whilst inventories of both types have been relatively stable over the last six months – demand remaining robust – a concerted effort to deliver G700 aircraft (given certification delays) could bring a change in this sector,” said Andrew Butler, Partner, ALTEA.

The availability of G550 aircraft on the pre-owned market increased over 300% once G650 deliveries started – an occurrence that may happen again, but this time potentially affecting the availability and pricing of Gulfstream G650/ER aircraft.

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