If you’ve been keeping up with the latest commentary on the private jet market, you’ll find that 2023 is often portrayed as robust, although calmer and more reasonable in terms of inventory and pricing compared to 2022. Many articles suggest a return to “normal” market conditions. However, a closer examination of the markets reveals a different reality. Depending on the data source, inventory is reported to have increased anywhere from 48% to 67%. At first glance, this may not appear significant, considering the low inventory levels observed in mid-2022 when there was virtually no availability in most segments. But in many markets, the numbers are considerably higher.
Take the G550 market as an example. A year ago, there were only six units for sale. Now, that number has skyrocketed to thirty-six, representing a remarkable 500% increase. Similarly, the Global 6000 market has experienced a 280% increase in inventory, and the Citation X market shows a 300% increase. We’re not talking about a small uptick from a few units to a handful. These markets, which previously had single-digit availability, are now flooded with 20-30 aircraft for sale. Such rapid growth in inventory levels indicates a decline in overall demand. Buyers are not absorbing the incoming inventory as rapidly as they did in 2021 and 2022. Jetnet data reveals that the number of aircraft sold or transacted in December of the previous year was just under 600, whereas only 145 aircraft closed or transacted in April 2023. While some argue that December is not a reliable indicator due to year-end tax-driven deals, even accounting for that, we still see a significant drop when comparing April of this year to nearly 300 transactions in November 2022. In summary, sales between November and April have declined by 50%. Considering current macroeconomic factors, it seems unlikely that the strong demand we have grown accustomed to will return in full force anytime soon.
Out of the 1347 aircraft listed for sale in Jetnet, the average time on the market before being sold is now 260 days. This is significantly higher than a year ago when, in many market segments, the average was in single digits or, at most, less than 50 days. Overall, it appears that the strong seller’s market of the past two years is rapidly transitioning into a buyer-friendly market. Prospective buyers now have a much larger selection of inventory to choose from. While prices have not yet dropped to pre-pandemic levels, we are witnessing more frequent price reductions due to the various factors discussed above. Only time will tell whether prices will fall to 2020 levels or stabilize somewhere in between.
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