Report: Pre-owned Aircraft Market Has Slowly Improved in 2011

September 2, 2011

Figures released late last week by the aviation research firm, JETNET LLC, offer a mixed picture of the health of the business aviation market. In a positive sign that a business aviation recovery is taking hold, sales of pre-owned business jets rose by 11.2 percent in July.

While asking prices for the seven-months ending July 31 had declined by 9.2 percent from the period a year ago, they actually increased in June and July 2011 over the same months in 2010 by $1.2 million and $2.7 million, respectively, according to JETNET’s monthly report on used aircraft sales. Inventories of business aircraft also are falling – down 13.7 percent for business jets and 10.1 percent for turboprops at the end of July 2011 from a year earlier.

“Used inventories definitely are being reduced but at a snail’s pace,” said Michael Chase, who analyzes used aircraft statistics for JETNET. “However, the increase in asking prices in June and July are a very positive sign.”
Looking at business jets, JETNET said the percentage of used aircraft for sale showed the largest change, falling to 13.7 percent from 14.9 percent. According to JETNET, the only segment posting an increase in for-sale inventory was the piston helicopter market, which rose to 6.5 percent from 6.3 percent.

Business jet sale transactions also had increased through July 31 by 11.2 percent compared to the period in 2010. Sale transactions of business turboprops also were up by about 3.7 percent during the period.

The big question is whether the economic slowdown that started this past summer will continue through the final quarter of the year. Several industry analysts said in August that the recovery should continue into 2012, thanks to strengthening corporate profits and growing demand for business aircraft. JETNET agrees with some caveats.

“Market recovery in the second half of 2011 depends on stronger U.S. GDP growth, fuel prices being held in check, and a rise in new aircraft deliveries,” JETNET said in the release. “The pre-owned market has been slowly improving in 2011, and the average asking price for pre-owned business jets has improved in the past two months, positive signs for business aircraft owners.”