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With the first quarter of 2024 now in the books, analysts are starting to use the data to speculate on the remainder of the year when it comes to the business aircraft sales market.
This week, OGARAJETS released its market report for the first quarter. It still rates the climate as a seller's market with 10 months of supply of jets listed for sale with a six-month absorption rate. It shows the number of planes on the market finding resistance at the 600 mark, or nearly 6% of the fleet which is just below where that number has hovered since September after hitting a historic low of just under 200 in early 2022 before steadily climbing.
The OGARA Report tracks around 40 makes and models of business jet aircraft of varying cabin class and size.
In the report summary, Austin Bass, business intelligence manager for OGARAJETS, emphasized the nuanced landscape of the business aviation sector, noting that election years are historically associated with uncertainties that influence economic sentiments and business decisions.
"The future of bonus depreciation remains uncertain," says Bass, pointing to ongoing discussions regarding the extension of the tax rebate that has fueled demand for preowned aircraft over the past few years. Such incentives significantly influence aircraft acquisition and fleet management strategies.RELATED STORY: OGARA Report on business jets shows a market worth studying closely (Fall 2023)
Despite these uncertainties, Bass notes the robust backlog of aircraft manufacturers as a stabilizing force, creating a disparity between market demand and available supply, which contributes to market strength.
"Pricing dynamics are undergoing a shift," he wrote. "This trend is driven by various factors, including changing supply and demand dynamics driving the new market equilibrium, as well as the ability of customers to narrow preferences based on price and pedigree."
Transactions in the first quarter of 2024 surpassed levels in the same period of 2023. Bass attributed the jump to post-pandemic realized demand, which led sellers to reprice based on more neutral market conditions.
Bass remains optimistic about the market despite increased supply, with momentum from Q1 carrying into Q2.
"The lockstep between changing supply and sales underscores the ever-present demand of business aircraft, with buyers and sellers actively engaging in transactions despite prevailing uncertainties," he wrote.
While supply has increased across markets, Bass noted that the overall percentage of fleet available for sale has remained relatively low, particularly for late-model and modern aircraft. This stabilization in pricing and supply could reflect a balance between buyer and seller expectations.
"As we navigate through the uncertainties and challenges confronting the business aviation market, it becomes evident that resilience and adaptability are prevalent in the normalizing business aviation markets," he wrote. "Despite some of the potential headwinds, the markets remain steadfast."