There are so many signs that it’s that time of year. Fireplace chimneys smoking, commercials on television playing Christmas music, and department stores setting up the Santa area for kids to whisper in Santa’s ear what they hope to have under the tree on Christmas morning.
From my vantage point, I can almost see the new year by the drop-off of calls from people who are trying to capture a year-end business aircraft transaction. Sure, I am still getting some—even as recently as last Friday—looking for an opportunity. But most people are now thinking about next year rather than this year.
2023 has been a very good year on many fronts. The transactions have been less frenzied, and the balance in our market seems to be returning. Inventory levels are increasing, signaling the balance is here to stay—for a while. And days on the market are lengthening.
But this gives buyers more choice and success in negotiating for better pricing rather than just having a yes-or-no answer from a seller. Don’t misunderstand—prices are not dropping off a cliff. They are gently floating down a bit. This gives sellers the ability to not feel as if they are in a fire sale and buyers a bit of confidence that they are not in a bidding war. Both sides are winning.
As I look out over the horizon into next year, I see what mirrors the start of 2023. A bit of a slow start for aircraft sales transactions in the first quarter. This momentary slowdown will afford opportunities that may be a bit better than the current fourth quarter for those buyers who can wait.
Buyers will have time to scour the market and find the best opportunities. The seller may feel a bit panicked, but this feeling should not last since the market will likely pick up steam as the second quarter begins.
Remember, 2024 is an election year. This always takes a few buyers to the fence to await the outcome. I have always felt that those prospects that say they must wait until the election is over to decide if they would buy or not are always looking for a fence to sit on to delay the buying decision.
Regardless of who wins, our country tends to move along and promote the need for business aviation. Also, one must still get out ahead of their competition and be in front of clients.
I think we can expect continued strong book-to-build ratios at the business aircraft manufacturers. As an industry, we have a terrific lineup of products being delivered. I would expect the supply-chain problems to continue to ease.
Already in many segments, I see this matriculation moving in our favor. I anticipate pre-buy slot opportunities being freed up with more regularity. Paint and upgrade slots should also be more readily available. All in all, doing business in the business aviation space is shifting in the direction of the consumer.
2024 will bring another productive year of trade shows and gathering venues. NBAA, CJI, and others are lining up with full slates of domestic and global events. Now that the pandemic is in the rearview mirror, crowds are less scary and attendance at all events is on the rise.
Doing business in aviation has always provided for those of us who make our living in this industry, and 2024 should be no different. Thank you all for being such great readers of my blogs and great aviation supporters. Happy holidays and a happy New Year to you all!
The opinions expressed in this column are those of the author and not necessarily endorsed by AIN Media Group.