The aviation industry began rebounding from COVID-19 in 2021, facing a demand for aircraft inventory that brokers and manufacturers struggled to meet with a lack of inventory at their disposal.
As the industry moves into the second quarter of 2022, the General Aviation Manufacturers Association (GAMA) has released its Q1 general aviation shipment and billings report, showing that the rollercoaster of a market could be cresting the final hill. The question is, are aircraft buyers and sellers prepared for a potential drop?
The aircraft manufacturing industry's results for the first quarter showed an increase in the number of aircraft deliveries across the board by 14.7% year to year, while the pricing of those aircraft was down nearly 6%.
"It is reassuring to see aircraft deliveries continue to show strong progress as we emerge from impacts of the pandemic," said GAMA President andamp; CEO Pete Bunce.
The aircraft category with the largest year-over-year increase in deliveries should not come as a surprise. Turboprop aircraft deliveries increased 31% compared to the first quarter of 2021, delivering 110 units this year.
Turboprop aircraft have been an ideal solution for the multitude of new flyers entering the market since early 2020. These types of aircraft can be cheaper to operate, cheaper to fuel, and have the capability to carry a typical family of four.
With jet prices skyrocketing over the last year, shipments increased only 4.4%.
Piston aircraft shipments also saw an increase, delivering 13.9% more aircraft this year than in the same period last year.
What jet buyers wanted to see in 2021 and how manufacturers plan to make a comeback this year
Those looking to get their hands on a private jet last year struggled with a lower inventory than ever before, but that didn't keep them from turning to GlobalAir.com in record numbers.
Total inquiries - by text, email and PDF download - for aircraft listed for sale on GlobalAir.com in November 2021 outpaced November 2020 by 42% despite the historically tight business aircraft market. This comes on top of a record third quarter, which resulted in a 49% rise in inquiries, year to year.
Five aircraft models made up nearly 30% of the aircraft inquiries GlobalAir.com received in November, highlighting the most popular business jets on the market.
Those aircraft include the Gulfstream G550, Challenger 650, Citation XLS+, Citation CJ4, and Gulfstream G450.
Both Textron Inc. and Gulfstream released their earnings reports for the first quarter of 2022, raving about higher earnings year-to-year and increased volume in their new aircraft backlogs, a welcome change to the previously dismal monologues about production struggles.
RELATED: Plane makers report increased profits, staggering aircraft backlog in earnings statements
In May, JETNET noted that there were 744 business jets listed for sale on its index, but only 8% of those aircraft were delivered new since the beginning of 2017, showing that used aircraft are leading the way in the aircraft market.
"While we can take solace in strong order backlogs and book-to-bill performance at the aircraft manufacturers, isn't it ironic that supply chain woes - largely self-induced by decisions in early 2020 to shut down aircraft factories and furlough people - have come full-circle to limit our collective abilities to push forward the throttles and accelerate today's production rates?" said JETNET iQ Creator/Director Rollie Vincent. "Like a built-in safety valve, the long-cycle nature of our business is something that (I would argue thankfully) protects us, sometimes from ourselves."RELATED: One graph from JETNET shows where we are right now in the storm of business jet sales
A curveball thrown to the business aviation industry in April was the announcement by General Dynamics, Gulfstream's parent company, that the certification of its upcoming Gulfstream G700 could be pushed back to next year as the FAA brings unforeseen requirements to the process.
The certification process is said to have a first-time requirement in which the FAA requires a line-by-line examination of aircraft software, a move that General Dynamics' chairman and CEO Phebe Novakovic said was not part of the company's original flight test plan or prior development.
This new process could add three to six months to the aircraft certification process. But Gulfstream said it is prepared for the obstacle and plans to increase deliveries of aircraft currently in production should the G700 not receive certification this year.
How the software check could affect other aircraft seeking certification is still unknown.
Aircraft prices may be coming down, but fuel prices show no sign of slowing
While the cost of an aircraft appears to be on the downwards slope, the same cannot be said for the cost of fuel.
Not only are jet fuel prices hitting a record-high spike, but April 2022 was the first time ever that Jet A prices surpassed 100LL prices.
Since the average retail price of Jet A hit a three-year low of $4.49 in May of 2020, compounded by surplus supply and pandemic-driven airline shutdowns, it has risen 47.2% in the past two years, based on national averages tracked and compiled by GlobalAir.com.
"Just as we have seen demand for aircraft unlike anything in recent decades, and how that has impacted private jet prices, we are now seeing that in the aviation fuel market," said GlobalAir.com President and CEO Jeffrey Carrithers.