December 2, 2011
By Thomas A. Horne
Click to view the entire Amstat report.
Corporate aviation market analysts at Amstat think that trends in the used business jet and turboprop market may be indicating a change for the better. “When the downturn hit in 2008, the number of used airplanes on the market rose,” says Amstat Executive Vice President Tom Benson. “And by mid-2009 that used inventory hit the high point, with 18 percent of the entire business jet fleet up for sale, and 13 percent of the turboprop fleet.”
The latest quarterly report from Amstat shows that the used inventory is dropping, and that’s good news. Now, some 14 percent of the business jet fleet and 10.7 percent of the turboprop fleet are on the market. After dropping steadily for two years, the used inventory has leveled off. In fact, Benson says that used turboprop inventories are actually below the 20-year average of 11.2 percent. Normally, a return to “normal” inventory levels would be a sure sign of economic recovery, but in this case that equation is marred by the fact that used sales transactions are below the 20-year average.
There’s a strong relationship between used aircraft inventories and sales of new airplanes. “In a downturn, used inventories go up and so prices of used jets and turboprops are forced down, and the used inventory shrinks,” Benson said. “Eventually the deals are so good that buyers buy, which drives used prices up.” Eventually, the prices of new jets and turboprops—which have dropped during the downturn, but not nearly as much as used prices—become attractive and new sales pick up. “But new sales typically don’t pick up until 12 to 18 months after used aircraft prices rise,” according to Benson, who thinks that the used market is “better than it was in 2009, but not back to normal.”
Meanwhile Amstat analyst Judy Nerwinski reports that jets 20 or more years old accounted for most of the used business jet deals, with 2.6 percent of retail sales. This narrowly edges out jets 10 to 20 years old (which account for 2.5 percent of sales) and jets less than 10 years old, with 2 percent of retail sales. That’s an improvement over last year, when jets less than 10 years old accounted for 1.7 percent of retail sales. “The younger market remains the healthier, but decreases in overall percentage of aircraft for sale, higher percentage of retail sales, and increases in asking price could be the glimmer of hope we’ve all been waiting for,” Nerwinski wrote in a December 2011 report.
AOPA Pilot Editor at Large Tom Horne has worked at AOPA since the early 1980s. He began flying in 1975 and has an airline transport pilot and flight instructor certificates. He’s flown everything from ultralights to Gulfstreams and ferried numerous piston airplanes across the Atlantic.
The Catholic Aviation Association wants to use faith, flying, and fellowship to promote general aviation.
AOPA is urging the town of Islip, N.Y., to reconsider a recently enacted fee schedule that sets higher rates for night landings.
A satellite-based transceiver has shown promise to enable worldwide Automatic Dependent Surveillance-Broadcast coverage.
VOLUNTEER AT AN AOPA FLY-IN NEAR YOU!
SHARE YOUR PASSION. VOLUNTEER AT AN AOPA FLY-IN. CLICK TO LEARN MORE >>>
VOLUNTEER LOCALLY AT AOPA FLY-IN! CLICK TO LEARN MORE >>>
BE A PART OF THE FLY-IN VOLUNTEER CREW! CLICK TO LEARN MORE >>>