As the preowned business jet market softens from the seller’s standpoint, industry analyst Altea is advising that the ultra-long-haul sector, and specifically the Gulfstream family, is an area to watch as the G700 enters service later this year.
According to Altea partner Jean Sémiramoth, “Without obviously moving to a buyer’s market—there has been a mild shift whereby market conditions favor sellers a little less.” Unlike the frenzied market in the past couple of years, Sémiramoth noted more buyers are paying attention to the condition of aircraft, damage history, records, pre-purchase inspection, and delivery conditions. However, he said the shift was anticipated.
While the market is “normalizing and heading to balance,” other factors will come into play, such as Gulfstream’s G700 joining the lineup of in-service aircraft, Altea noted.
“If the OEM is able to deliver as planned and to the numbers expected—then we could see the availability of both G550s and G650/ERs increase and prices begin to fall,” said Altea partner Andrew Butler, “Whilst inventories of both types have been relatively stable over the last six months—demand remaining robust—a concerted effort to deliver G700 aircraft—given certification delays—could bring a change in this sector.”
Butler pointed out that the number of preowned G550s on the market saw a 300 percent jump once G650 deliveries spooled up, “so we might see a similar occurrence in the market again—this time potentially affecting the G650/ER types.”
Also, given the loyalty of the Gulfstream family, G650 buyers may move into the G700 and then offload their existing model, which could dampen preowned pricing overall, the company said.
In any case, sellers and financiers should seek out proper appraisal guidance to limit risk, Sémiramoth said. “We are working with several owners and financial institutions to deliver a realistic estimate of what their aircraft is worth in prevailing market conditions, and to help them recognize the issues and concerns prospective buyers are likely to point out that could ultimately impede the prospect of a successful resale.”