sed/pre-owned retail jet transactions (whole aircraft
sales and leases) were down 20% Year-over-Year
(YoY) through June 1, 2019 compared to the same
period in 2018, according to JETNET databases.
Meanwhile, used jet inventory has been on a slow but
steady increase, with more than 2,100 jets listed as for sale –
representing 9.6% of the worldwide fleet – at press time.
Limited availability of late-model inventory, particularly of
the more popular models, continues to confront and no
doubt frustrate would-be customers and their dealers and
brokers. In the Light Jet segment, just 16 Embraer Phenom
300/300E aircraft (3.2% of the worldwide fleet of more than
500 jets) were on-market as of mid-July.
The situation mirrors that of the Super Mid-size Jet
segment, where only 10 used Bombardier Challenger 350
aircraft are listed (3.3% of the installed base of almost 300
aircraft). And availability is only marginally higher in the Large
Jet segment, with 27 Gulfstream G550 aircraft (4.7% of the
worldwide fleet of almost 575 aircraft) available for purchase
according to industry listing services.OEM Health Check
At press time, it was too early to know how the OEMs were
performing on various key metrics, including orders,
deliveries, backlogs and book-to-bill in Q2 2019. Results
from Q1 2019 were generally encouraging, with a notableuptick in book-to-bill performance bolstered by several fleet
deals, including a $1bn order for 14 Gulfstream G650ER and
four Gulfstream G500 jets from Qatar Executive.
The backlog increased by an estimated 6% in Q1 2019 at
the ‘Big Five’ business jet OEMs over 2018 Year-End results,
based on the latest JETNET iQ estimates. Much of the order
activity is reportedly for newly or recently certified models as
customers continue to be attracted to the latest and greatest
technologies on offer. Our current outlook is that the
momentum of orders and backlog will be enough to support
‘somewhat higher’ overall delivery rates, at least through
2019 and 2020.
Depending upon its severity and duration, an economic
slowdown in the next 12-24 months will cause industry
leaders to reset output rates and almost certainly make some
of the tough, but necessary calls to take certain low-volume
models out of production.
This has important implications for future residual values,
and should, in our opinion, be factored into purchase offers
for both new and used models.Buyer Sentiment Update
The sentiment of business aircraft owners/operators has
slipped back over the past year, after reaching a post-
crisis peak in Q2 2018. About 32% of respondents to the Q
2019 JETNET iQ Survey believe that we have not yetU
What’s the health of the Business Aviation marketplace moving into August? What’s
impacting the current market trends, and how are prospective buyers approaching
new and used aircraft sales with talk growing that a recession could be on the horizon?
MARKET INDICATORS18 Vol 23 Issue 8 2019 AVBUYERMAGAZINE http://www.AVBUYER.com^Business Aviation Market Overview
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