Light jet market improving
July 19, 2011, Santa Monica, Ca. - Signs are strong that the market for light jets is heating up, according to jetAVIVA.
July 19, 2011 By Carey Fredericks
Citing recent market data and the company’s own direct experience, jetAVIVA reports that depressed pricing of pre-owned light jets is driving the recovery.
Deliveries of new light jets are down the first two quarters compared to last year, but overall sales activity and inquiries continues to increase due to exceptional values in the pre-owned market,” said jetAVIVA co-founder and President Cyrus Sigari. “While pre-owned inventories are in most cases coming down, pricing has yet to completely firm up or reverse trend toward appreciation. This is creating an environment where prices for newer pre-owned aircraft are driving buyers to enter the market due to a sense that depressed pricing may not last much longer.
According to a June report from corporate aviation intelligence firm JETNET, retail sales of pre-owned business jets were up 15.7 percent in the first four months of 2011 while the inventory for sale percentage dropped from 15.5 percent to 14.3 percent, year over year.
Many buyers are making step-up purchases, selling their first light jet in search of increased speed, range, and cabin size,” Sigari continued.
While the market for new aircraft in 2011 has largely been driven by demand for large cabin business jets from developing economies, jetAVIVA is seeing the uptick in light-jet demand coming from relatively established markets. Sigari noted, “With the exception of Brazilian interest, most of the demand for light jets is still coming from U.S. and European markets. Interest from China, India, and other emerging markets has yet to have a noticeable impact on the this market segment.
In addition to buyers moving up to their second or third light jet, jetAVIVA is seeing an increase in early-stage shopping for light jets from first time jet buyers seeking to upgrade from high-performance piston and turboprop aircraft. “This is a dynamic market. Pre-owned aircraft present a great value right now, but as this inventory declines, prices are likely to stabilize and begin to increase, which may drive buyers back to considering new aircraft,” Sigari predicted.