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While aircraft sellers played the role of bully on the schoolyard in the months right after the pandemic, getting whatever price they asked for their planes plus your lunch money, the game of tug of war more recently has looked to be shifting toward an even playing field.
The number of available aircraft for sale has drifted to a level of around 6%, slowly skipping along the curve back toward normalcy. For brokers, it has been more calculus than recess, making it even more important now for them to do their homework.
The market has become a seesaw as prices and aircraft inventories swing. Even with everything helter-skelter, though, it hasn't been a complete slide to the bottom. So what should we expect as we graduate into 2024? So far, it might as well be a game of hide and seek.
The latest to try to find order in the scattered numbers of private jet sales, how much they are selling for, and how quickly, is Austin Bass, market research manager for OGARAJETS.
"While all of the segments remain in good health, concerns have risen in several markets, reflecting an industry landscape that is a mix of optimism and caution," he wrote in the Atlanta-based brokerage and aircraft management firm's recently published OGARA Report for the third quarter.
In other words, as other market reports have started to note, conditions vary by user, especially when it depends on the type of plane involved.
In the numbers crunched by Bass, the OGARA Report shows that 5.9%, or 549 aircraft of the 9,215 in service, were listed for sale at the end of the most recent quarter, taking an average of 139 days to sell.
He notes that the second and third quarters of 2023 more resembled their prior-year counterparts after a sloth-like opening quarter in the year. Across its four divisions of "core markets" of private jets, the OGARA Report still labels the current climate as a seller's market.
However, when looking at particular class segments and even further at specific models, one will find many more neutral and even buyer-market ratings.
Among the smallest and largest jet sizes, the candlestick graphs of planes new to the market by age show a resurgence of newer aircraft coming available, especially in the 5-10-year age range of jets. Meanwhile, in the super-midsize category, the biggest swing over recent quarters has been the rise in the number of 10-15-year-old jets coming up for sale, chiefly driven by the Gulfstream G200, of which 15.4% of the fleet is listed on the market, according to the report. Elsewhere in the class, volume remains brisk for Gulfstream G550 aircraft.RELATED STORIES:Major business jet makers post strong earnings with stable backlogs - Is it time to consider the 2024 aircraft market? Analysis shows older jets feeling tightest pinch as business aircraft market shifts War, Recession andamp; the Aircraft Market - JETNET's latest assessment of the business aviation world Could 2023 produce the slowest market for preowned aircraft in a decade? A dive into the numbers shows the possibilityBass notes that some in the business aviation world have grown more concerned after the slow first quarter, compounded by rising inventory.
"It's fair to acknowledge that this unease is not unfounded, but critical to remember that transitioning from exceptionally thin and pronounced seller's market back to equilibrium can be a painful process," he wrote. "Supply in our core markets is edging closer to pre-pandemic levels. Yet, the persistence of elevated pricing across nearly all markets remains a concern.
"If supply and pricing don't balance in a timely manner, it is possible that we will experience a ‘yo-yo' in market conditions. … It's reasonable to expect increased supply will perpetuate price degradation seen over the last 18 months, but we believe that addressing this moving forward should be done with caution. Any adjustment or degradation of the markets should not immediately be construed as an imminent market collapse, but rather a necessary recalibration of markets that have been over-inflated for the last 3 years."
OGARA on the light-jet market
For the smaller private jets out there, the report concludes that the volume of newly listed light jets looks to be stabilizing and balancing in an overall seller's market. The hottest planes in the market are the Cessna Citation CJ2 class and Citation CJ4 class, rated as being seller's markets. Elsewhere, Embraer Phenom 100 aircraft, along with the Hawker 400 class of jets and the Citation CJ3 and its variants are rated by OGARA as being in a neutral market.
OGARA on the mid-size jet market
The report calls the mid-size business jet segment "some of the best performers in the market," also saying that conditions favor sellers. However, that can differ based on the aircraft model.
"The Excel series remained strong and was one of the healthiest series across all segments'" the report states. "Concerns linger regarding the Hawker series due to increased supply and pricing volatility."
Jets performing the best include the Phenom 300, and the Citation Excel, Citation XLS and Citation XLS+, while the Hawker 800XP and Hawker 900XP are rated as neutral.
For super mid-size jets, OGARA notes a volatile supply amidst a "slightly" improving market, yielding more planes on the market. Of the segments, it has been the most dynamic, with numbers varying by quarter. QGARA also rates this segment as one for sellers.
"While most markets still favor sellers, there are a few exceptions that have seen conditions deteriorate quickly," the report states.
The most in-demand super mid-size jets, according to the report, are the Challenger 300, the Falcon 2000 EX and LX series, and the Citation Sovereign. The Challenger 350 and Gulfstream G280 are rated as neutral, while OGARA calls it a buyer's market for the Gulfstream G200.
OGARA on the ultra-long-range jet market
For bigger bizjets the tide isn't as frothy as elsewhere, the report concludes, "with all vintages of supply (and) sales either rising or remaining steady."
The report concludes that for the most part, the market for the heavier private jets is healthy and "poised favorably heading into" the fourth quarter, while rating the market for the category as overall neutral.
That rating holds true for large private jets including the Challenger 604, Challenger 605, Gulfstream G350, Gulfstream G450, Gulfstream G500, Gulfstream G550, and the Gulfstream G650 and G650ER.The segment includes another Gulfstream, the Gulfstream V, to be listed as being in a buyer's market.
"While we may not know exactly where we are headed," Bass wrote, "it is imperative that we know where we are." And as the schoolyard at the Academy of Aircraft Sales braces for the coming winter months, that might mean being stuck indoors between the periods of bonus depreciation and the New Year, watching as the asking prices of aircraft and their actual sale prices turn into a game of dodgeball.