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MARKET INDICATORS
Business Aviation Market Overview Pre-owned aircraft sales’ momentum is carrying across to new business aircraft sales, notes Brian Foley, Editor of Market Indicators for AvBuyer. Meanwhile, the pre-owned market looks set to further benefit… s anticipated in previous columns, the incredible sales volume in the pre-owned aircraft sales market over the past couple of years has finally spilled over into the new business jet market. While 2021 had initially been slow for manufacturers, they now report sales outpacing customer deliveries by a two-to-one margin. This is welcome news for the business jet OEMs, who have seen sales boringly flat for over a decade, since cratering to just half the yearly shipments they were enjoying before the 2008-09 Great Recession. This was temporarily exacerbated by the pandemic, which initially drove 2020 deliveries down a further 20% (compared to 2019), due to factory closings, supply chain interruptions, and ‘wait-and-see’ buyers. It’s a widely held belief in the industry that when preowned inventory shrinks and there are fewer choices of quality equipment, buyers will migrate to new aircraft. Until now this has been difficult to verify, having personally observed that new and used buyers are very different demographics who rarely cross over into one another’s domain. However, given the chronic lack of inventory, currently
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just a third of the typical numbers of used aircraft for sale, there is arguably nowhere left to go for some buyers except new; even for those who would prefer to buy used.
Volume Orders from Charter/Fractional Players
The sudden interest in new aircraft has been further stoked by a general desire of customers to avoid the crowds at public airports, and on densely-packed airliners. At first, these new users flocked to charter, fractional ownership programs, jet cards, and the pre-owned market. These same users are now responsible for charter and fractional fleet operators placing volume orders for new aircraft, which further bolsters the backlogs of OEMs. As a result, my consultancy’s forecast of new jet deliveries has them finally breaking out of the 700-unit worldwide delivery doldrums, and coming dangerously close to the 900-unit mark by 2025. (This is perhaps the most optimistic forecast in the industry currently, from a forecaster who is normally one of the more conservative.) The forecast does not foresee a return to the lofty 1,300-unit per annum levels of 2007 – at least not during its 10-year horizon.
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