Jetcraft Forecasts $66B Used Jet Market Over Five Years

Aircraft broker Jetcraft is predicting that preowned business jet transactions will dip slightly this year and then rise at a 3.6 percent compound annual rate until year-end 2026, according to its latest Five-Year Pre-Owned Business Jet Market Forecast, released last month.

“This year’s report predicts that, after stabilizing in the wake of a post-Covid surge, preowned transactions should maintain their new higher base and growth rates, reaching 10,921 transactions valued at $66.6B over the forecast period,” said Jetcraft CEO Chad Anderson.

Last year’s preowned jet transactions reached a record value of $14.5 billion, a nearly 40 percent increase from 2020, primarily driven by midsize and large-cabin jet purchases, the company said. Despite an equally strong performance earlier this year, Jetcraft expects the market to soften, with normal depreciation levels resuming in 2023.

Jahid Fazal-Karim, owner and chairman of Jetcraft, said in the report that the market has not yet returned to pre-pandemic norms and the industry is still “in an opportunistic position.” However, it is trending more toward “normality,” Fazal-Karim added.

“When compared to 2020, it might feel as though prices are rising at an unstable rate," he said. "Our data, however, indicates this is a rational market, with value growth expected to return to pre-pandemic levels."

Unlike the time between 2004 and 2007 when the preowned market experienced 50 percent average price increases, the current period has pricing that reflects short-term world events and remains “far more rational” with average prices returning to pre-pandemic levels, Jetcraft maintained, according to Jetcraft.

North America has led growth in demand for preowned aircraft, with its market share growing from 53 percent in 2010 to 73 percent in 2021. Even so, Jetcraft identified international growth areas in the report, noting that the ultra-high-net-worth population in Asia-Pacific—a region that prefers large-cabin jets—is set to increase 33 percent over the next five years.

The study reports that the share of preowned jet buyers under age 45 has risen 20 percent since 2017 and notes that the younger age group is trending toward larger aircraft with an average transaction price of $25 million. This is 31 percent more than the over-45 demographic.

“Shifts in buyer behavior continue to fuel this upward trajectory with more and younger first-time buyers entering the market, greater demand for larger jets, and a growing ultra-high-net-worth population. And we’re now entering a post-pandemic business cycle from a new, higher starting point,” Fazal-Karim added.

By model segment, preowned transactions for large aircraft are expected to dip from 419 aircraft in 2021 to 368 this year. However, they will grow steadily each year thereafter, exceeding 2021 levels by 2024, and reaching 483 by 2026.

Midsize aircraft transactions will experience a similar year-over-year slide, from 573 in 2021 to 507 this year, but grow at a slower rate, exceeding 2021 levels in 2026. Light aircraft, however, are forecast for the biggest drop from 1,427 preowned transactions last year to 1,119 this year. They are not expected to return to 2021 levels over the forecast period, ebbing upward to 1,240 by 2026.

Market value is projected to have peaked in 2021, dipping to $13.7 billion this year and then $13 billion next year. Growth in pricing is anticipated to be uneven and slower after that, but not to return to 2021 levels before 2027.