JETNET Reports ‘Mixed Results’ in Sale Transactions Across Aircraft Sectors

According to data from JETNET, inventories are down and full sale transactions had mixed results in the first six months of 2018 across all six aircraft sectors when compared to the same time period in 2017.

Key worldwide trends across all aircraft market segments were compared from June 2018 to June 2017. “Fleet for sale” percentages for all sectors were down in the June comparisons. June 2018 was the lowest “for sale” percentage (9.1%) for business jets since the great recession began.

Business jets are showing a flat start in the first six months of 2018, with a 0.2% increase in pre-owned sale transactions, but are taking less time to sell (26 days) than last year. Business turboprops saw no change in sale transactions, while taking more time to sell (13 days). Interestingly, new business jet shipments at 296 as reported by GAMA were also flat in the first six months of 2018 compared to 2017.

Comparing June 2018 to June 2017, turbine helicopters saw a slight increase in year-to-date sale transactions, up 0.6%, while piston helicopters showed a decline of 8.1% in sale transactions.

Commercial airliners are also reported by JETNET and include the number for sale for both commercial jets (including airliners converted to VIP) and commercial turboprops. Commercial jets and commercial turboprops were down in full sale transactions, at -9.1% and -0.8%, respectively, in the year-to-date June-over-June comparisons.

For the first six months of 2018 there were a total of 4,401 aircraft and helicopters sold, with business jets (1,344) and commercial jets (1,005) leading all types and accounting for 53% of the total. The number of sale transactions across all market sectors — at 4,401 — decreased by 2.9% compared to the first six months of 2017. Only pre-owned business jets and turbine helicopters showed increases in sale transactions compared to the other market sectors. However, they were both less than 1% and business turboprops had no change.

The flat results for business jets in the first six months were surprising because U.S. real gross domestic product (GDP) increased at an annual rate of 4.1% in Q2/18 and 2.2% in Q1/18. The second quarter rate is the second highest since 2014.

In an analysis of yearly U.S. GDP percentages from 2000 to 2017, the year 2017 was 2.2%, and 2018 is projected to be 3.0% for the U.S., as sourced from the IHS Markit Comparative World Overview report from July 2018.

Business jets and business turboprops were compared for the months of June from 2014 to 2018 (four years) for the U.S. vs. non-U.S. aircraft in operation, for sale and percentage for sale.

The general trend has been that growth in business jets has outpaced turboprops nearly two to one in the last four years. Since June 2014, 1,958 new business jets have joined the global fleet, compared to 1,120 turboprops.

The number for sale and percentage for sale have declined since 2014. The split of U.S. vs. non-U.S. business jets in operation has remained at 60/40 levels, whereas the split of in-operation U.S. vs. non-U.S. business turboprops is about 51/49. Interestingly, the number for sale in the U.S. vs. non-U.S. is 63/37 for business jets and 59/41 for business turboprops.

An analysis of the 12-month moving average for full retail transactions for business jets from December 2011 to June 2018 showed that from December 2011, used business jet transactions steadily increased to a high point of 2,714 in June 2017. A falling-off occurred in the second half of 2017, to a low point in December 2017 of 2,506, and has since steadily increased to 2,606 transactions in June 2018.

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