Dealer Broker Mkt Update April14_Gil WolinNov06 18/03/2014 15:49 Page 2
DEALER BROKER MARKET UPDATE
business. The economy continues to turn in decent growth numbers – which is a relief to many a business planner and economist. Overheated growth too often reverses direction with equal or greater ferocity. It’s better flatter sine wave on the growth-versuscontraction graphs. With so many decent, late-model preowned choices available – and so many newer upgrade options for so much of the preowned fleet, some of the manufacturers' existing in-production aircraft provide competition for their new models. Underpinning some of this up-tick is an increase in global business aircraft use, which, according to a recent report by Jet Support Services, Inc., grew by about four percent in 2013. Throw in fewer airline seats and fuller flights on the air carriers and the combination seems to be encouraging some people to turn to – or return to – private flying.
MORE A “SURGE” THAN “FLAT” In early February, market-observers at JETNET reported a drop in almost every segment of pre-owned turbine-powered business aircraft actively ‘For Sale’ in 2013. The numbers also reflected a small increase in the sales of jets (by 0.6% over 2012), versus declines in sales of pre-owned turboprops (-8.8 percent). Buoying expectations, however, are analysts’ projections (including those of JETNET)
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WORLD AIRCRAFT SALES MAGAZINE – April 2014
We have seen an improvement in the past couple of quarters here in the U.S. and in Europe. that rate the national economy to be finally growing at a pace that is traditionally primed for positive Business Aviation growth. While the percentage of the fleet listed as actively ‘For Sale’ has declined steadily since 2010, much of that percentage decline, JETNET notes, comes from an increase in the actively flying fleet of more than 2,350 aircraft as of the end of 2013. Still, there's no ignoring the small growth in sales in 2013, helped significantly by a strong Fourth Quarter that helped off-set a weaker Third Quarter last year.
BUSINESS AVIATION'S CONVERSION CATALYSTS Numerous catalysts seem to drive this recent sales resurgence, modest though it is. Tax issues drive the decision for some buyers; swelled cash coffers make financing a purchase a non-issue for others, leading some companies to fulfill long-delayed fleetwww.AvBuyer.com
replacement and fleet-expansion plans – and again, providing benefits at tax time. For still others, it's the classic benefit of time efficiency that Business Aviation offers driving the decision. The benefits make a business aircraft a viable choice for expanding a company's reach – with convenience and efficiency well above anything available from the common carrier. As one frequent Business Aviation user noted, “With few exceptions, the airlines are serving fewer markets than ever, and service options to the third-tier markets are schedulekillers of the highest degree.” (Essentially, markets with minimal service, often subsidized, are in some cases limited to one daily flight – one in, one out.) The CEO of Houston's Charlie Bravo Aviation noted the improved market activity at many levels. “We're seeing a lot of interest here in the U.S.,” Rene Banglesdorf told World Aircraft Sales Magazine. “That's a swing-back from how things had been.” She reflected on the flat years in 2010, 2011 and 2012, but the signs of improvement in 2013. “We have seen an improvement in the past couple of quarters - here in the U.S. and in Europe.” The nature of the contacts seems improved as well, according to Banglesdorf and others in the world of pre-owned business aircraft sales where there are neither “fire sale” people Aircraft Index see Page 4