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Sluggish start to 2015 for pre-owned aircraft sales: JETNET

Utica, N.Y. - JETNET LLC, the leading provider of corporate aviation information, has released March 2015 and first quarter 2015 results for the pre-owned business jet, business turboprop, helicopter, and commercial airliner markets.


May 11, 2015
By JETNET

Market Summary

Key worldwide trends across all aircraft market segments, comparing March 2015 to March 2014, reveal that Fleet For Sale Percentages for business jets showed the largest decline for all market sectors. Commercial Airliner Turboprops showed the largest increase in the for-sale percentages compared to all market sectors.

Business jets are showing a slow start in the first quarter of 2015, with a 13.5% decrease in pre-owned sale transactions, and are taking 66 days more to sell than last year, with a 20.5% increase in average asking price. The increase in average asking price is one of the largest increases we have recorded, as the asking price trends are shifting. We will continue to track this trend as 2015 continues to unfold. Also, following a similar pattern, business turboprops showed a decrease of 5.7% in sale transactions, with a 32.1% increase in asking price. Further analysis of the asking price increase has revealed that, on average, newer aircraft were sold in the current quarter comparison.

Turbine helicopters saw a decline of 10.8% in sale transactions in the first quarter comparisons, while piston helicopters showed a 4.6% increase. However, they took more days to sell, with turbine helicopters taking 42 days more, and piston 94 days more.

Commercial airliners reported by JETNET include the numbers for sale for both commercial jets (including airliners converted to VIP) and commercial turboprop aircraft. The number of pre-owned commercial airliner sale transactions—at 362 for the first quarter of 2015—showed a double-digit decrease of 14.2% compared to the first quarter of 2014.

Across all aircraft sectors, there were 6,317 aircraft for sale, with 1,759 sold through the first quarter of 2015. Overall, the first quarter of 2014 pre-owned market showed a slow start to 2015.

Pre-Owned Trends

In total, there were 23 (8.1%) fewer business jet transactions in the first quarter of 2015 compared to the first quarter of 2014.

In comparing trends by aircraft weight, with the exception of the VLJ, all weight groups showed decreases in used retail sale transactions, with the light weight group (10,001-20,000 lbs.) comprising 67 (or 39%) of the transactions, followed by heavy weight (35,000+ lbs.) at 46 (or 27%), and medium (20,001-35,000 lbs.) at 45 (or 26%). These three weight groups combined accounted for 92% of the total transactions in 2014. The VLJs comprised the remaining 8%.

There are few differences in the numbers between the weight groups. The light jets lead with the largest number of transactions. There appear to be no bifurcation trends in the pre-owned market.

U.S. GDP
Real gross domestic product—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 0.2 percent in the first quarter (that is, from the fourth quarter of 2014 to the first quarter of 2015), according to the advance estimate released by the Bureau of Economic Analysis. 

The BEA report shows that U.S. GDP is below the 3.0% growth mark (when business aviation does well). The advance estimate of the U.S. GDP release showed the economy grew for the fourth straight quarter. In the fourth quarter, real GDP increased 2.2%. The second and third quarters of 2014 were very strong growth quarters. In reviewing the first quarters’ GDP results since 2009, the current quarter ranks as the third lowest. However, one quarter of a year does not make for a full year.