Current-production Pre-owned Bizjet Prices Stabilizing

AINalerts » August 11, 2011
August 11, 2011, 11:15 AM

“Although an industry-wide recovery remains stalled, it appears that select markets for [pre-owned] newer, later-generation [current production] business jets are showing signs of stability in market price, reduced inventory levels and absorption rates,” according to Aircraft Post president Dennis Rousseau. “However, the market for out-of-production aircraft remains unstable, with no shortage of inventory and concern for continued deterioration in market price.” The “select market” that has seen stabilized prices in the pre-owned realm includes mostly current-production super-midsize to large-cabin business jets. Since the recession began three years ago, pre-owned market prices have fallen severely, Rousseau noted. For example, used Gulfstream G550s that were selling for $55.5 million in 2008 are currently being acquired for $41.1 million. However, that is an increase from the $38.2 million and $38.3 million the large-cabin jet fetched in 2009 and 2010, respectively, according to data from Aircraft Post. As for out-of-production models, absorption of inventory is a key to improvement, and current levels are still showing 10 percent of the available fleet, with absorption rates averaging 21 months “in spite of most of these aircraft now priced commensurate with market,” Rousseau said. The U.S. debt ceiling fiasco, decrease in consumer spending, high fuel prices, recent stock-market volatility and high unemployment are causing more buyer apprehension in the pre-owned bizjet market, he added.

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