Pre-owned Aircraft Report 2016

Even before the U.S. election results and subsequent stock market rally, the used business aircraft market was showing signs of emerging from its summer crypt, with some brokers reporting record “activity” going into the fourth quarter and 37 percent of end users reporting to a survey compiled by our sister publication, Business Jet Traveler, that they intend to make more use of private aviation. While the inventory for both used business jets and turboprops is well below the historical average of 13 percent, the prices asked for them are bargain basement, attributable largely four factors: anemic global economic growth; deep discounting of new aircraft by the OEMs; too many late-model aircraft for sale and the continuous backfilling of the inventory of those aircraft; and the costs associated with performing mandated upgrades to older aircraft. There is still pronounced softness in both the light and large-cabin jet segments, but signs are emerging in various surveys that market pessimism amongst aircraft owners is waning and the bottom might be right around the corner. With the new jet market not expected to make a meaningful recovery until at least 2020, it might be a slow crawl out of the hole, but at least the worst of the carnage might be over.