The pace of used aircraft sales picked up sharply in June and July after the April and May doldrums brought on by the COVID-19 pandemic and its economic impact, according to aircraft dealer association IADA.

Accredited dealers reported 103 closed sales transactions in July, more than three per day for every day of the month. In June the association members also had a good month, making 74 deals.

Those 177 deals in the past two months compare with 100 total in April and May, a 77 per cent increase over the two-month period. In addition, August began with 87 additional aircraft under sales contracts. And fewer deals fell apart in June and July; 27 versus 38 in April and May.

“Our dealers reported exceptionally brisk activity in June and July after a protracted period in March, April and May where the deals were much harder to put together,” explains IADA executive director Wayne Starling. “IADA dealers also experienced a reduced percentage of deals where lowered prices were integral to completing the deal.”

Overall, dealers registered 19 new commitments to purchase aircraft in June and July and 52 acquisition agreements in the same period. The group also was exclusively retained to sell 217 aircraft in the past four months.

Brian Foley of Brian Foley Associates chimes in with more figures: Textron's aviation unit, which includes the Cessna and Beechcraft line of general aviation aircraft, reported that business jet deliveries in 2020 fell 36 per cent from 2019.

A similar trend was reported at General Dynamics' Gulfstream division, where the number of jet deliveries slipped by 16 per cent in 2020. The book-to-bill ratio was 0.88:1 for the year, meaning that for every delivery there was less than one new sale, a fact evidenced by the order backlog shrinking 12 per cent compared to the same time last year. Textron and General Dynamics are by no means outliers in the industry, with others expected to soon report similar shipment totals well below 2020 levels after COVID-19 resulted in factories being idled or curtailed for several weeks, coupled with supply chain problems from vendors experiencing similar challenges.

Business jet manufacturers are undoubtedly hopeful that they can claw back at least half of what they lost in 2020 deliveries compared to 2019. There is reason to believe that the industry can achieve this, and could even recover faster than the OEMs themselves are predicting.

First, preowned business jet sales were on fire in 2020, with transactions rising 13 per cent, according to the latest data from AMSTAT. Normally what's good for the preowned market is good for new sales and vice-versa. Thus it's possible that in 2021 new sales will finally catch up to last year's remarkable preowned performance, assuming that it wasn't just a function of recent rock-bottom prices for used aircraft.

Next, the use of corporate jets is off by just 10-15 per cent even though they're principally used for business travel, which has fallen off a cliff. This suggests that when business travel does return, presumably in the last half of the year, utilisation could easily surpass pre-pandemic levels and stimulate new sales.

“The desire to fly privately and avoid the airlines has not yet boosted the financial performance of charter, fractional or new aircraft manufacturers. Still, there's room to be hopeful for each of them as momentum from last year's preowned jet sales boon and an increase in jet utilisation for business combine to stoke the market,” he remarks.