This website uses cookies
More information
Business Air News Bulletin
Business Air News Bulletin
The monthly news publication for aviation professionals.
Resale uptick leads to optimism for coming six months
1Q24 ended on a buoyant note with an uptick in pre-owned business aircraft sales, according to IADA. Its First Quarter 2024 Market Report also indicates an optimistic outlook for the next six months.

IADA-accredited dealers reported 253 resale transactions in the just-ended first quarter, up from 239 in the first quarter of 2023. 1Q24 ended with 248 aircraft under contract, compared to 206 YoY.

And IADA dealers had 302 contracts-to-sell exclusively in the first quarter of 2024, compared to 197 in the previous year. So the pre-owned business aircraft market is objectively healthy, with numerous signs of rebalancing after a heated sales climate.

"I'm happy to report that the first quarter proved to be more active than we had expected," says chairman Phil Winters, vice president of aircraft sales and charter management for Western Aircraft. "The six month projections for sales, demand, willingness to inventory and supply all continue the cautiously optimistic trends we saw in the fourth quarter of 2023, despite regional unrest and the uncertainties of a US presidential election."

"About three-quarters of the IADA respondents to our quarterly member survey believe that large and ultra long-range jet resale pricing will fall and that inventories will rise over the next six months," says executive director Wayne Starling. "The most pronounced changes are expected at the top of the market."

The IADA Market Report is especially prescient because it is based both on quantitative sales data and the perspectives of IADA members, who buy and sell more aircraft by dollar volume than the rest of the world's dealers combined. Nealy 80 per cent of IADA dealers handle both new and pre-owned aircraft.

IADA's proprietary quarterly member surveys provide insights into, and projections for, business aircraft supply, demand, pricing and dealer willingness-to-inventory across several size categories: turboprop, light jet, midsize jet and large and ultra long-range jet.

About half of first quarter 2024 respondents look for prices and inventories to stabilise in pre-owned turboprop aircraft, a segment that typically avoids the wider gyrations seen in other parts of the market.

In the first quarter of 2024, the pre-owned business aircraft market continued to rebalance after the heady and unsustainable conditions in the immediate aftermath of the COVID crisis. Retail transactions of pre-owned aircraft peaked in 2021 and into the first part of 2022, emptying the available on-market inventory and driving a surge in transaction prices.

Since the latter half of 2022, inventory has continued to seep into the pre-owned market, providing much-needed products to satisfy a clear step-change in demand for business aircraft. The recent certification of the Gulfstream G700 is expected to deliver fresh pre-owned inventory into a marketplace eager for young, highly pedigreed aircraft, especially at the top of the market.

IADA dealers submit monthly transaction and activity reports. The entire membership, including products and services members, are surveyed quarterly for their perceptions of the market and where it is heading. Comments from IADA members, which lead the resale marketplace, add colour and clarity to the report:

"We have seen a settling of the insurance market in recent months, and I expect that will continue for some time. That being said, there are still issues to be resolved and I would expect pricing to be fairly stable with inflationary increases. Capacity to place coverage has been available, and we expect it will remain steady or continue mild growth," says Steve Johns, LL-Johns Aviation Insurance, IADA-verified products and services member.

"After a small lag in activity during February, March is proving to be an extremely active marketplace. Buyers are making good offers with the expectation of putting aircraft into service during the second quarter, which is keeping supply in check and keeping prices stable in many markets, but not all. It remains a split market with newer, lower time aircraft in good demand, while older, higher time aircraft are losing value," says Toby Smith, JB&A Aviation, IADA-accredited dealer.

"The aviation insurance market is starting to normalise in 2024 after four plus years of a 'hard market.' We are starting to see premiums stabilise around expiring rates and reductions are to be had in certain market segments," says Tom Hauge, Wings Insurance, IADA-verified products and services member.

"Q1 2024 has demonstrated resiliency in the market as levels of inventory are increasing across segments. Demand for excellent pedigree aircraft is good and pricing changes are reflective of predictable depreciation rates. Some owners that acquired aircraft during the COVID market, who did not seek professional broker counsel that contemplates and discusses asset exit strategies during the buying process, may be slow to accept the reality of a levelling off of the market. We are on track for a solid 2024," says Jim Riner, Wetzel Aviation, IADA-accredited dealer.

"Insurance market should continue to level off. There will be competitive pockets but overall we should, hopefully, see stabilisation in rates of plus or minus 10 per cent either way," says Jason Riley, Acrisure Aerospace, IADA-verified products and services member.

"Geopolitical factors will certainly impact global markets in 2024. With prices stabilising, available aircraft numbers and transaction terms normalising, private aircraft, a critical tool for the successful operation of any dynamic enterprise, are sound investments no matter which way the political winds blow. It is my belief that most companies or individuals utilising the essential tools of private aviation will not let the winds of political change determine their fate or force them to operate less efficiently while Washington chaos continues to churn," says Ann Polard, Duncan Aviation, IADA-accredited dealer.

"In the turboprop and light jet markets, inventory levels have been increasing over the past 12 months, but the number of transactions has also increased in that time frame, resulting in a slight decrease in prices. However, the total months' supply of inventory has remained stable, suggesting a balance of supply and demand.," comments Phil Winters, Western Aircraft, IADA-accredited dealer.

"It will be interesting to see what effect, if any, the certification and eventual deliveries of the new Gulfstream G700 and G800 have on the pre-owned market. One would think that for every G700 and G800 that gets delivered, a new G450/G550/G650 would hit the market," says Kyle Wagman, Leading Edge Aviation Solutions, IADA-accredited dealer.

Other News
 
IADA teams with Jetquity on residual value deal
May 30, 2024
Jetquity, which has 80 deals with aircraft buyers, is financially backed by a collection of Middle Eastern family offices, wealth funds and financial institutions. The organisation has already structured numerous guarantees.
IBAC reveals additional industry partners at EBACE
May 28, 2024
Duncan's first IADA-certified sales broker in EMEA to speak at EBACE
May 25, 2024
IADA broadens global connections
April 19, 2024
IADA's AircraftExchange tops $60 billion in resales
March 18, 2024