Press Release

Issued by Amstat.

October 5, 2017

According to AMSTAT, there have been further encouraging signs coming from the business aircraft resale market. In its NBAA‐BACE Business Aircraft Resale Market Update, it examines the market based on aircraft size and age. The clear message from the report is that in almost all markets transaction activity has been most robust in the Newer and Mid‐Age segments.

In the Heavy Jet group, the Newer and Mid Age segments have shown the greatest year‐over‐year growth in resale retail transaction numbers with jumps of +38.2% and +12.9% respectively. AMSTAT notes that while these percentages, especially for the Newer segment seem high we should remember that this is the smallest jet segment and that a few transactions plus or minus will have a significant impact from one period to another. By contrast, the Older Heavy Jet segment saw transaction activity contract ‐3.4% versus the first 8 months of 2016.

The report shows a similar story in the first eight months of 2017 in the Medium Jets with the Newer and Mid Age segments leading the way with +33.0% and +30.7% resale retail transaction growth year‐over‐year respectively. The Older Medium Jet segment saw a ‐10.0% decrease year‐over‐year.

As with Heavy and Medium Jets, the Newer segment of the Light Jets did well in the first eight months of 2017, racking up a +20.9% increase in transactions over the same period in 2016. Interestingly, the Older Light Jets also performed well, with a +11.1% increase. Transactions in the Mid Age segment fell ‐6.4%.

The Turbo‐Prop segments saw very little change in the first eight months of this year versus the same period in 2016. Each segment was either up or down about 1.0%.

In a review of inventories, the report shows a reduction in availability in almost all market segments.

In the Heavy Jets, AMSTAT recorded a contraction in inventory in the last year. Overall, the percentage of aircraft for sale fell from 10.5% in September 2016 to 8.5% today. The Newer segment dropped from 9.3% for sale to 7.1%, the Mid Age segment dropped from 10.4% for sale to 8.3% and the Older Heavy Jet segment dropped from 12.7% to 11.8%.

AMSTAT also reported that Medium Jet inventories also contracted over the last 12 months. There is 10.5% of the fleet for sale today versus 11.5% a year ago. Interestingly, the largest drop in inventory was in the Older segment from 15.9% in September 2016 and 14.7% today. By contrast, the Newer segment fell from 7.5% to 6.7% and the Mid Age segment fell from 12.0% to 11.2%.

There was minimal year‐over‐year change in the Light Jet inventory between 2016 and 2017. However, that aggregated view while reflecting the activity in the Newer and Older ends of the market, hides what was a significant increase in Mid Age Light Jets for sale. Inventory in this segment rose from 11.0% a year ago to 12.9% today and has been on an upward trajectory since early 2015.

Turbo‐Prop inventories contracted only slightly from 8.4% a year ago to 8.0% today. At the segment level, there were also few changes. The Older Turbo‐Props were up 1%, Mid Age were down 2% and Newer were down 1%.

Looking at Average Asking Prices, the report shows continued downward pressure in almost all market segments.

Year‐over‐year, the Heavy Jet group as a whole recorded a ‐8.3% decrease in Average Asking Prices. All Heavy Jet Age segments reflected this decline with Mid Age Heavy Jets falling ‐8.9%, Newer models falling ‐7.5% and Older models falling ‐6.7%. That said, the Newer Heavy Jet segment saw a +4.0% increase in Average Asking Prices in the last 6 months.

In a similar fashion to the Heavy Jets, the Medium Jet group also saw a year‐over‐year decline in Average Asking Prices, in their case by ‐15.9%. The largest decline of any of the Jet groups. Within the Medium Jets, the Newer segment saw the biggest decline at ‐20.2%. The Mid Age segment fell ‐12.4% and the Older segment fell ‐4.0%.

The Light Jet group saw Average Asking Prices come down ‐9.8% year‐over‐year. As with the Medium Jets the Newer segment took the biggest hit, down ‐13.1%. Average Asking Prices fell ‐8.6% in the Mid Age segment and ‐2.7% in the Older segment.

Average Asking Prices in the Turbo‐Prop market fell ‐6.8% year‐over‐year. By contrast and unlike most other segments, Average Asking Prices for the Newer Turbo‐Props were up slightly year‐over‐year at +0.7%. Older Turbo‐Props and Mid Age Turbo‐Props segments were down ‐9.3% and ‐7.6% respectively.

“The market continues to show positive signs in terms of resale retail transaction growth and inventory contraction” said Andrew Young, AMSTAT general manager. He added, “and while, there was a nice bump of 4.0% in the Average Asking Prices for Newer Heavy Jets, we continue to wait for greater stability or even an upward trend in this metric for most market segments.”

For a full copy of the report go to: http://www.aso.com/AMSTATMarketUpdate.pdf.