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Fortem International Ltd.
Fortem International Ltd.
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IADA reports strong quarter for business jet sales
The bull market for pre-owned business aircraft has continued in 1Q22 for IADA members. They closed 288 deals from January-March, compared to 213 transactions in the same period in 2022, a 35 per cent increase.
It's a great market for sellers, not so good for buyers.

IADA members closed 288 deals from January through March 2022, an increase of 35 per cent compared to 213 transactions in the same period in 2022.

“We live in tumultuous times. Despite that, the aviation field continues to show extraordinary strength. Global demand is very high. Much like the fourth quarter of 2021, that demand is married to constrained inventory levels,” says executive director Wayne Starling. “From a qualitative point of view, our members sense a softening of those constraints and look forward to greater inventory levels as the year progresses.”

During the first quarter of 2022, IADA members entered into 223 acquisition agreements, were exclusively retained to sell 155 aircraft, had 259 aircraft under contract and saw only 45 deals fall apart for one reason or another.

IADA began monthly tracking of pre-owned sales metrics for business aircraft in April 2020 as a result of the volatile market conditions caused by the pandemic. Transaction volume by member dealers reflects the overall health of the used aircraft market, because its dealers buy and sell more aircraft by dollar volume than the rest of the world's dealers combined. This global impact and breadth of data help to make the IADA Market Report the go-to review of the used business aircraft market.

Two key factors inform the report. First is the IADA accredited dealers' market perspective, taken from a survey of the entire IADA membership. The second is actual sales data supplied by IADA members to support those points of view; IADA dealers submit monthly transaction and activity reports to IADA.

Comments from IADA accredited dealers, OEM members and verified products and services members add context to the report.

“We are continuing to see strong demand for aircraft. It does seem the speed at which we get a listing under LOI (letter of intent) is decreasing. It also seems there are more off-market aircraft being communicated. This indicates we may be seeing the first signs of the market softening a touch. Pricing remains very strong and availability remains very limited, but it's possible the first week of March was the peak for pricing and low availability. We will know in a month,” says Textron Aviation manager, pre-owned market analysis Cody Vanderslice.

“While it is a great market for sellers, it is a very challenging market for buyers, to the point of significant buyer frustration and, in some cases, desperation. This is the main Achilles heel of the current market,” adds Dallas Jet International senior partner Shawn Dinning.

“The business aviation industry should continue to show positive momentum in 2022. First time buyers, economic growth and business activity in general are expected to increase, helping to drive the demand,” says IADA accredited dealer Shawn Holstein. David Lee adds: “Demand is strong and will remain that way for this year. That said, the lack of supply is hurting deal flow.”

“I predict that globally, masking mandates and travel restrictions mandated by virus fears shall be completely eliminated by June. Then we shall see an explosion in corporate travel, which will fan the fire that is blazing due to extreme demand for business aircraft against a total lack of supply,” says JetValues-Jeremy Jeremy Cox.

“Price elasticity is coming to the forefront; the rising cost of capital will put pressure on the opportunity cost of acquisition, feel the pricing levels will remain but days on the market will start to creep up as demand slowly softens over the next 12 months,” says XO Global vice president outbound sales team Gordon Cameron.

“Insurance market conditions remain very challenging in the sector; premiums are at a high not seen over the last 20 years while capacity is truncated in the market," adds Tom Hague.

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