Preowned business aircraft transactions jumped notably in the latter part of 2020, helping to drive down inventory levels, analysts report. However, this has not translated into a rebound in pricing, with values generally significantly lower than a year ago. Aircraft valuation analyst Asset Insight reported that preowned transactions in the last three months of 2020 were up 34 percent quarter-over-quarter and marked a 25 percent increase in demand over the fourth quarter of 2019.
Asset Insight’s AI2 Market Report, which tracks 134 fixed-wing models and 1,912 aircraft listed for sale, characterized the quality of the for-sale fleet in the “excellent” range and improved over the third quarter and from 2019. Turboprops and midsize jets marked the largest improvement in quality of available fleet, while light jets posted a slight decline.
“Q4 2020 demand continued to strengthen for preowned aircraft, with a fantastic close—up 25 percent year-over-year,” said Asset Insight president Tony Kioussis. “Of course, some markets were stronger than others, with large jets being a real standout in activity. Pricing trends were mixed, however, with light jets posting the only year-over-year increase, 3 percent.”
Along with mixed pricing results, the AI2 Market Report found the days on market was 6.7 percent higher in the fourth quarter than in the previous three months.
Meanwhile, in Asian Sky Group’s fourth-quarter edition of the Asian Sky Quarterly, data analyst Amstat provided a preliminary snapshot for the full year that found inventory sizes contracting in the latter part of 2020. Availability in the light-jet segment has contracted 26 percent since midyear, while midsize availability is down 22 percent and heavy jets by 20 percent.
Amstat said this dip stems from the upswing in resale activity. After the 35 percent declines in transactions in March through May, activity has jumped significantly since, with November leading the way at a 61 percent increase year-over-year.
While data is still preliminary, that dramatic swing might lead to an actual year-over-year increase in transactions for all of 2020, Amstat reported. “This is remarkable given the significant decrease in transaction activity between March and May,” said Amstat general manager Andrew Young.
As for values, Amstat’s data reflected a temporary rebound in the light segment in November but found the median short-term value down 28 percent from last January. Heavy jets were down a net 16 percent from the beginning of 2020 and midsize jets down by 22 percent, the analyst reported.
