Fri, Jul 22, 2011
Depressed Pricing Of Pre-Owned Aircraft Making For Good
Deals
Signs are strong that the market for light jets is heating up,
according to light jet sales company jetAVIVA. 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.
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