The Asset Insight Q2 AI2 2021 Market Report shows that pre-owned business aircraft experienced a 30 per cent increase in sales volume in Q2 over Q1 2021, and a 101 per cent increase in sales volume in Q2 2021 over Q2 2020. Coupled with the increase in transactions, asking prices also increased, on average, 2.2 per cent across the for-sale fleet. The Q2 AI2 Market Report covers 134 fixed wing models and 1,450 aircraft listed for sale.
Along with the brisk transaction activity, large jets saw a seven per cent asking price increase while turboprops posted a 3.2 per cent increase in price in the second quarter of 2021 over Q1 2021; and a 0.8 per cent increase and 8.3 per cent increase over Q2 2020 respectively. While activity continued to be strong for midsize and light jets, prices for both categories were down in Q2 versus Q1 and versus 2020 – with light jet asking prices dropping over 17 per cent year-over-year.
“Viewed from any angle, the pre-owned business aircraft market is white hot,” comments Asset Insight president Tony Kioussis. “As sellers bring additional aircraft to the marketplace, newer/higher quality assets are snapped up by eager buyers at values very close to their ask price. We are seeing a small number of very old aircraft stay on the market, and those assets are skewing the days on market data. It is possible that many of those older aircraft are with their final owner and may not sell. However, we are seeing engaged sellers quickly matched with eager buyers for the bulk of the for sale fleet, and there is no indication that this pace will slow any time soon.”
Average ‘Days on Market’ increased over 5.1 per cent during Q2 (406 versus 386 during Q1 2021) to post a record high/worst figure. The tracked fleet's Maintenance Exposure to Ask Price Ratio (ETP Ratio) improved (decreased) to 73.5 per cent from March's 74.4 per cent, following May's record high/worst 76.3 per cent. The ETP Ratio is a useful indicator of an aircraft's marketability. It is computed by dividing the asset's Maintenance Exposure (the financial liability accrued with respect to future scheduled maintenance events) by its Ask Price. Days on Market analysis has shown that when the ETP Ratio is greater than 40 per cent, a listed aircraft's time on the market increases, usually by more than 30 per cent. During Q2 2021, assets whose ETP Ratio was 40 per cent or higher were listed for sale nearly 89 per cent longer (on average) than aircraft whose Ratio was below 40 per cent (281 versus 530 Days on Market).
The Quality Rating covering the for sale fleet declined in Q2 compared to Q1, but the fleet remains in the ‘Excellent’ range. The Quality Rating for Turboprops on the market, however, improved in Q2 over Q1 2021, and increased 6.7 per cent in Q2 2021 over Q2 2020.