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Business jet sales dive, but props hold up
Total full aircraft sale transactions in the first quarter were down by 337 aircraft and helicopters. Most of the decline is accounted for by turbine helicopters and commercial airliner jets.

JETNET has released its March 2020 and first quarter 2020 results for the pre-owned business jet, business turboprop, piston, helicopter and commercial airliner markets.

The company analysed key worldwide trends across all aircraft market segments, comparing March and the first quarter of 2020 to March and the first quarter of 2019. Generally, inventories are up across the board, but only slightly, from 5.5 per cent last year to 5.6 per cent in 2020. Total sale transactions for aircraft and helicopters were down 337 or 15.4 per cent for all the markets reported in the first quarter of 2020 compared to the first quarter of 2019.

Across all aircraft sectors, there were a total of 6,369 or 3.0 per cent more aircraft for sale in the quarterly comparison. This was a difference of 186 more aircraft and helicopters for sale.

Interestingly, fleet for sale percentages for business jets showed 9.9 per cent for 2020, an increase of .6 points from 9.3 per cent for 2019 in the quarterly comparison.

Total full sale transactions were down by 337 aircraft and helicopters. The top two were turbine helicopters (-144), and commercial airliner jets (-89) totalling 233 or 69 per cent of the total decline in the quarterly comparisons.

Business jet full sale transactions showed a 5.8 per cent decrease and are taking more time to sell (13 days) than last year. However, business turboprops showed a decrease of 13.8 per cent in sale transactions and are selling in less time (51 fewer days) comparing 2020 to 2019.

Turbine helicopters saw a large decrease in sale transactions in the first quarter comparisons, at -34.5 per cent. However, turbine helicopters took 31 fewer days to sell.

Commercial airliners were also analysed, and include the numbers for sale for both commercial jets, including airliners converted to VIP, and commercial turboprop aircraft. Business jets at 507 and commercial jets at 358 accounted for 47 per cent of the total full sale transactions (1,846). Interestingly, full sale transactions were up 7.1% for commercial turboprops, while piston aircraft also showed a 5.6 per cent increase. JETNET does not cover all piston aircraft inventory or sales.

In tabulating the March-ending changes from 2005 to 2020 for the business jet in-operation fleet, number for sale, percentage for sale and the year-over-year percentage point change, March 2020 marks the first time since 2016 that the month of March demonstrated a year-over-year increase in the fleet percentage for sale. Interestingly, the March 2018 number of aircraft for sale (2,020) is the lowest number since March 2008. While the percentage for sale increased to 9.9 per cent comparing 2020 to 2019, the number of for sale increased by 162 or 7.9 per cent to 2,215.

In 2009, as the great recession struck, there was an explosion of 62 per cent or 1,095 more business jets listed for sale compared to the year prior. What then followed was a trend toward recovery, as the market steadily shed inventory and moved closer to again being a healthy seller's market (below 10 per cent). This increase in units for sale in the first quarter of 2020 at 9.9 per cent is a far cry from the pronounced spike of 2009 at 17.9 per cent and 2,857 for sale.

Real gross domestic product (GDP) decreased 4.8% in the first quarter of 2020, according to the advance estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1per cent. This 4.8 per cent decrease in US GDP in the first quarter of 2020 is very concerning. In the first quarter of 2009, US GDP declined by 6.4 per cent. There were 337 (15.4 per cent) fewer transactions in the first quarter of 2020 than the first quarter of 2019. Interestingly, almost 80 per cent of the transaction decline in the first quarter of 2020 was in the United States.

A study of the 12-month moving average for turbine helicopters' full retail transactions from March 2012 to March 2020 reveals that from January 2017, used turbine helicopters transactions steadily increased until May 2018, at 1,749. Then there was a sudden drop to 1,375 transactions in March 2020, below the low point in January 2017.

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