SAVANNAH, GA. (July 11, 2017) – Hagerty Jet Group, the experts in business jet sales and acquisitions, announces today that we have been featured in “Aviation Week”
Buyer’s Market For Used BizJets? Not Always, Report Says
The supply of used business jets has remained “stubbornly” above 10% of the fleet, noted Haggerty Jet Group in its second-quarter Gulfstream Quarterly Market Update.
“Conventional thinking suggests that buyers will control this market into the foreseeable future,” the update said. But “it’s not always a buyer’s market anymore … We see signs of a transition.”
New buyers evaluating choices are facing unexpected challengers in finding aircraft that meet their requirements.
“We hear countless stories about buyers’ multi-year searches pursuing specific make/model/floor plans ending with little or no success of buying the right airplane at the right price,” the update said. Haggerty Jet Group, based in Savannah, Georgia, is an aircraft brokerage firm specializing in Gulfstream aircraft.
Buyers want turn-key aircraft priced below the last transaction, and they prefer U.S. or European-operated aircraft with avionics mandates and inspections completed, it said.
“The choices narrow further if there are special requirements such as specific floor plans or cabin layouts,” the update said.
An uptick in Broker Wanted advertisements may point to a stabilizing market.
The G550 market, for example, is deceiving. Thirty of the 540 G550s in operation are for sale, representing 5% of the fleet. But options are limited. Eleven are under contract. Only nine are available if a buyer demands a U.S.-registered aircraft, the update said.
“Suddenly a 5% supply becomes a 2% supply,” it said. “In other words, it’s not a sellers’ market for the right G550.”
Of the nine, only one G550 for sale is five years old or newer, compared to four for sale a year ago.
“This is good news for the manufacturer which now faces less competition from young inventory in the preowned market but limits buyer’s options for late-model used aircraft,” the update said. At the same time, values for G550s decreased 20% on average per year for the past three years because of foreign sellers competing solely on price along with “heavy OEM discounting … We anticipate future residual value loss will become more moderate and show signs of stability.”
In the G650 market, 13 are for sale with no deals pending, representing 5% of the fleet. Average days on the market total 236 days, up from 135 days a year ago. Prices range from $48.5 million to $66.5 million.
In the G450 market, 30 used aircraft are for sale, representing 8% of the fleet. Five deals are pending. The G450 market has shown signs it is stabilizing after a major pricing correction a year ago, the report said. Inventory is expected to remain flat. The market is trading from $10 million to $21 million.
Thirteen Gulfstream GV’s are on the market with no deals pending, representing 6% of the fleet, the update said. At least two other GV’s will be up for sale in the next few months. GV supplies peaked in mid-2015 with 23 for sale. Asking prices range from $9.95 million to $13 million, “but are not reflective of where the market is or should be,” the report said. Days on the market have remained flat.
Thirty-nine preowned GIV-SP, G400 and G300 aircraft are on the market, representing 9.5% of the fleet. Three deals are pending and two are advertised as “lease only.” Asking prices range from $3.3 million to $6.4 million with supplies remaining flat.
Supplies of used G280s have declined steadily since the year began, with the average price and number sold increasing. Three are for sale and one deal is pending, with asking prices ranging from $14 million to $17.9 million.
In the G200 market, 34 are for sale, representing 13% of the fleet. Ten deals are pending, with asking prices ranging from $3 million to $7.95 million. Nine G150s are for sale with one deal pending, with asking prices from $4.45 million to $7 million.