Pre-owned business jet sales set a record in the first quarter of 2017, recording 530 retail transactions, more than any other first quarter ever. Activity in 1Q17 was up 10% vs. last year’s first quarter, and is 9% above the previous first quarter record of 487 business jet transactions set in 2013. Looking at volume as a percentage of overall fleet size, 1Q17 is in line with 1Q13, but industry experts view the aggregate activity level of 530 transactions as a strong signal of the health of the market.
What’s more, if the last decade of data is any indicator, we could be in for a record breaking year. On average, 1st quarter sales have accounted for 23% of total annual transactions, which if that holds true for 2017, suggests the industry will see over 2,300 retail transactions in the pre-owned business jet market, exceeding the high mark of 2,191 retail transactions set in 2014.
These are very promising indicators for the industry, but how do they affect value?
While the broader market is unlikely to see the sort of value appreciation that occurred from 2004 through mid-2008, industry experts are starting to notice slowing depreciation, flattening and even some slight upticks in value for certain models – especially those aircraft that have a clean history and are well-equipped.
Brad Harris, President and CEO of Dallas Jet International, has seen particularly strong activity in the pre-owned Gulfstream G-450 market. “Of the early model G-450 aircraft you see on the market, half have either sold or are under contract. Most of the well-pedigreed G-450s have been purchased, and we’re not seeing the used supply being replenished like it has in the past. For example, if 7 of these aircraft get sold, we’re only seeing 1 or 2 G-450s come back on the market.”
What we’ve seen recently is that when any of the early model, well-pedigreed G-450s come onto the market, they’re demanding a higher price. Where we’ve seen aircraft priced at $12.9MM before, a similar G-450 would be priced at $13.9MM today – and they sell fast. - Brad Harris, President & CEO, Dallas Jet International
"Buyers seem to be ‘sitting on the sidelines’ waiting for these better pedigreed aircraft to pop up because what’s left on the market either has too many hours or doesn’t have the upgrades that the buyer wants.” Harris notes that they have also seen similar activity in the G-V market.
Business doesn’t seem to be letting up for Dallas Jet. “The demand is incredible. Just this month, we’ve seen a good amount of first-time buyers, previously fractional-usage or charter customers, come to us to help them acquire an aircraft. There hasn’t been a noticeable trend on price point with these customers – it’s been all over the board.”
Dallas Jet International has done more business in the first 4 months of 2017 than they have in any 12-month period over the last 10 years. “If business continues at the same pace, 2017 is going to be a record-breaking year for us” Harris predicts.
Is this uptick in the market a short-term trend, or is it a trend that will continue throughout the year? Time will certainly tell.
Our suite of flexible financing solutions is uniquely designed to meet the needs of sophisticated corporate aircraft owners - from a high net-worth individual to the Fortune 500 Company.
Contact Us »
We have tools to help you bank when and where you want.Mobile Apps Directory »
Be part of our inclusive culture that strives for excellence and rewards talent.Visit PNC Careers »
The PNC Financial Services Group, Inc. All rights reserved.