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GWelcome to the inaugural issue of the JBA Aviation Market Report This quarterly Market Report will provide you with an insightful analysis of developments and trends in the business jet marketplace as a whole, as well as a more detailed look at pricing on specific models of Gulfstream, Dassault Falcon, Bombardier, Hawker, Beechcraft and Cessna aircraft. If you have questions about this analysis or would like some insight into a market we did not cover, please give us a call. If you are in the market to buy, lease or sell a business aircraft, trust the experts at JBA. With more than 30 years experience, JBA is known throughout the industry as the brokerage organization with a reputation for professionalism.
Citation preview
October 2010
3rd Quarter 2010
A LOOK AT THE LAST QUARTER
3rd Quarter 2010 There are several signs around us that fall has finally arrived. The weather is cooler, football season is in full swing and buyers are making offers on jet aircraft. The summer months are usually pretty slow in the turbine aircraft resale market. This summer seemed to be even slower than usual as motivated sellers tried in vane to entice offers with frequent price reductions.
However, since the first of September, most dealers and brokers have reported a strong surge in activity and a large spike in transactions. The increase in demand paired with a slow but steady decrease in supply over the last six months are two very good indicators that things are starting to improve. Although many markets appear at first glance to be flooded with inventory, when the list of aircraft for sale is narrowed down to the truly desirable aircraft, many times there are few alternatives to consider.
The charts on the right side of this page give a quick snapshot of the jet market over the last several months. Because of the long lead time necessary to close a transaction, .the recent spike in activity will not be reflected in the jets sold chart for some time. However, you can see the decrease in supply has continued. Current inventory levels are down more than 12% from where they were this time last year.
2650
2700
2750
2800
2850
Apr
'10
May
'10
Jun '10 Jul '10 Aug.
'10
Number of Jets for Sale
0
100
200
300
Apr '10 May
'10
Jun '10 Jul '10 Aug
'10
Number of Jets Sold
A LOOK AT THE LAST QUARTER
3rd Quarter 2010 With a couple of notable exceptions, pricing has continued to fall slightly over the last several months. Although a modest price increase was seen in the G-550 & Global Express markets a few months ago, those increases were not enough to overshadow the continued decline in the small, midsized and large cabin markets.
Turnover rates remain slow as It is still taking quite a long time to sell in today’s market. The average days to sell has been hovering around the 12 month mark for quite some time. When prices finally stabilize, that trend should correct itself as aircraft owners will have a clearer picture of what their aircraft is worth when they decide to put it on the market. Today’s seller can only look at the most recent transaction for an estimate, than try to price the airplane “ahead of the market” to compensate for dropping prices.
$4,400
$4,600
$4,800
$5,000
Apr
'10
May
'10
Jun
'10
Jul
'10
Aug
'10
Average Jet Asking Prices
0
100
200
300
400
500
Apr
'10
May
'10
Jun
'10
Jul '10 Aug.
'10
Average Days to Sell
4th Quarter 2010
LOOKING FORWARD
It seems as if the recent surge in activity is being driven primarily by the need for lift, as opposed to
opportunistic buyers attempting to capitalize on low pricing and desperate sellers. Driving that need
would be an increase in domestic flying, which seems to have been steadily increasing over the last 9
months. Assuming we continue to see the stock market indices improve and domestic flying continues
to improve, I think it is a safe bet that there will be an active market through the end of the fourth
quarter. The approval of bonus depreciation for 2010 & 2011 should keep the OEM’s backlog growing,
which should drive more and more buyers to the pre-owned marketplace.
. The following chart was compiled from the U.S. Energy Information Administration which
tracks U.S. Jet Fuel sales in Average Thousand Gallons per Day.
40,000
50,000
60,000
70,000
Jan '10 Feb '10 Mar '10 Apr '10 May '10 Jun '10 Jul '10
GULFSTREAM
DASSAULT FALCON
BOMBARDIER
HAWKER BEECHCRAFT
CESSNA
0
10
20
30
40
50
60
Available G100 Available G150 Available G200
Available GII Available GIII
GULFSTREAM – Midsized Aircraft Available
Supply of aircraft in
the Gulfstream
midsized category has
been fairly flat over
the last year, with the
exception of the G-
200 which has
displayed a steady
decline since last
September.
Availability of G-II’s &
G-III’s is well off peak
numbers, but still
represents a very high
percentage of the
active fleet.
Back to aircraft listing
0
2
4
6
8
10
12
G100 Sold G150 Sold G200 Sold GII Sold GIII Sold
GULFSTREAM – Midsized Aircraft Sold
Several models of
midsized Gulfstream
aircraft have had
pockets of activity
which resulted in a
number of transactions
during a particular
month. However, only
the G-200 has
demonstrated any
consistency in the
number of transactions
for any length of time.
Back to aircraft listing
GULFSTREAM – Midsized Aircraft Asking Price
For the most part,
asking prices in the
midsized Gulfstream
market have been flat
to slightly decreasing
over the last 12
months. The G-200
seems to have leveled
off and even showed
a slight uptick earlier
this summer.
$1,000,000
$3,000,000
$5,000,000
$7,000,000
$9,000,000
$11,000,000
$13,000,000
$15,000,000
G100 Asking Price G150 Asking Price G200 Asking Price GII Asking Price GIII Asking Price
Back to aircraft listing
0
10
20
30
40
50
60
Available GIV Available GIVSP Available G450 Available GV Available G550
GULFSTREAM – Large Cabin Aircraft Available
Availability of G-IVSP
aircraft for sale has been
steadily shrinking since
February. Over the last
30 days, supply of in
service G-450, G-V & G-
550 aircraft has shrunk
drastically and the supply
of G-IVs is well off peak
numbers. A significantly
large percentage of 450
& 550 supply currently
consists of delivery
positions & lease aircraft.
Back to aircraft listing
0
2
4
6
8
10
GIV Sold GIVSP Sold G450 Sold GV Sold G550 Sold
GULFSTREAM – Large Cabin Aircraft Sold
Activity on large cabin
Gulfstream Aircraft has
been sporadic, but
generally good. Prior
to year end there was a
large spike in G-450 &
G-550 sales. Most
recently, there has
been a surge in sales
of straight G-IV’s and
what few remaining G-
V’s are for sale are
getting serious offers.
Back to aircraft listing
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
GIV GIVSP G450 Ave Asking Prices GV Ave Asking Prices G550
GULFSTREAM – Large Cabin Aircraft Asking Price
The G-550 market was
one of the first to
experience a true
increase in pricing this
spring. Though the G-
450, G-IVSP & G-V
markets have taken a bit
longer, all are now
trending towards
increasing asking prices
and lower availability.
Back to aircraft listing
0
10
20
30
40
50
60
F20-5 F50 F50EX F2000 F2000EX
DASSAULT FALCONJET – Midsized Aircraft Available
Supply of midsized
Falcon Jet aircraft for
sale over the last year
has been relatively flat.
A few of the models
are off peak figures,
but the drop in supply
has been driven more
by Seller’s removing
their aircraft from the
market rather than
transactions.
Back to aircraft listing
0
1
2
3
4
5
6
7
8
F20-5 F50 F50EX F2000 F2000EX
DASSAULT FALCONJET – Midsized Aircraft Sold
Sales of midsized
Falcon Jet aircraft over
the last year have been
spotty. Straight Falcon
50’s have had a couple
of good months this
year while Falcon 20
retrofits and Falcon
2000’s have had only
moderate success.
Back to aircraft listing
$1,000,000
$3,000,000
$5,000,000
$7,000,000
$9,000,000
$11,000,000
$13,000,000
$15,000,000
$17,000,000
$19,000,000
F20-5 F50 F50EX F2000 F2000EX
DASSAULT FALCONJET – Midsized Aircraft Asking
Just about all models
of midsized Falcon
Jet aircraft have
continued to
experience price
decreases over the
last 12 months. The
largest drop seems
to be on the straight
Falcon 2000s, with
the average asking
price dropping by
around 25% over the
last year.
Back to aircraft listing
0
5
10
15
20
25
30
F900B F900EX F7X
DASSAULT FALCONJET – Large Cabin Aircraft Available
The availability of newer, in service, large cabin aircraft has been coming down all year. However, the number of 7X delivery positions available on the re-sale market has climbed in recent months and the number of older Falcon 900B’s for sale has spiked quite a bit in the last quarter.
Back to aircraft listing
0
2
4
6
8
10
F900B F900EX F7X
DASSAULT FALCONJET – Large Cabin Aircraft Sold
The factory delivered a
good number of Falcon
7X aircraft at the
beginning of the year
and again in the
spring. When viewed
as a percentage of the
number of aircraft for
sale, Falcon 900EX and
900B sales have been
fairly slow, with a small
spike in early summer.
Back to aircraft listing
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
F900B F900EX F7X
DASSAULT FALCONJET – Large Cabin Aircraft Asking
Falcon 7X asking prices have remained pretty firm while Falcon 900EX & 900B asking prices have maintained a moderately decreasing trend in 2010.
Back to aircraft listing
0
10
20
30
40
50
60
70
Lear 31A Lear 40XR Lear 45XR Lear 60XR
BOMBARDIER – Midsized Aircraft Available
Availability of newer,
midsized Lear jets has
been fairly stable over
the last year.
However, inventory
levels on some of the
older model Lears like
the Lear 31A have
begun to creep back
up since the early
summer.
Back to aircraft listing
0
2
4
6
8
10
12
14
Lear 31A Lear 40XR Lear 45XR Lear 60XR
BOMBARDIER – Midsized Aircraft Available Sold
Several of the midsized
Learjet models saw a
spike in transactions in
the months of April
and June. The month
of August saw
extremely light trading
on all models of Lear
jets.
Back to aircraft listing
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
$11,000,000
Lear 31A Lear 40XR Lear 45XR Lear 60XR
BOMBARDIER – Midsized Aircraft Available Asking
Asking prices on midsized Lear jets have continued to trend down over the last year. Average prices on models like the Lear 40XR that only have a handful of aircraft for sale are drastically effected by one price change or one new addition to the market.
Back to aircraft listing
0
5
10
15
20
25
30
35
40
45
50
CL 601 3A CL 604 CL 605 CL 300 Global Express Global 5000 Global XRS
BOMBARDIER – Large Cabin Aircraft Available
Heavy Iron inventory
levels have generally
been coming down
over the last year
across the board.
However, several
current production
models like the
Global 5000 & XRS
have experienced a
recent increase in
delivery positions for
sale, causing total
availability to spike in
recent months.
Back to aircraft listing
0
2
4
6
8
10
CL 601 3A CL 604 CL 605 CL 300 Global Express Global 5000 Global XRS
BOMBARDIER – Large Cabin Aircraft Sold
A good number of
newer, large cabin,
Bombardier aircraft
were moved in the
months of April & May.
Age of airframe is
more important than
ever as the 605’s
outperform the 604’s,
which continue to
outperform the older
601’s.
Back to aircraft listing
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
CL 601 3A CL 604 CL 605 CL 300 Global Express Global 5000 Global XRS
BOMBARDIER – Large Cabin Aircraft Asking
Although the in
production, large cabin
airframes like the
Global 5000 & XRS
have seen some
significant price
increases recently, the
older vintage airframes
like the 601 continue
to suffer declining
values. Until the 605
shows signs of
improvement, I would
not expect the market
on 604’s to stabilize.
Back to aircraft listing
10
15
20
25
30
35
40
45
50
55
Premier 1A Beechjet 400A Hawker 400XP
HAWKER BEECH – Small Cabin Aircraft Available
Supply of Beech 400A’s
has been very stable
over the last year while
Premier 1A’s and
Hawker 400XP’s have
experienced some
fluctuations. Current
availability is not far
off from the numbers
reported last fall.
Back to aircraft listing
0
2
4
6
8
10
12
Premier 1A Beechjet 400A Hawker 400XP
HAWKER BEECH – Small Cabin Aircraft Sold
Small Cabin, Hawker
Beech sales tracked
pretty closely with the
seasonality of our
industry over the last
year. A spike in
transactions occurred
toward year end and
again at the end of
spring. with little
activity during the
summer months.
Back to aircraft listing
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Premier 1A Beechjet 400A Hawker 400XP
HAWKER BEECH – Small Cabin Aircraft Asking
Average asking
prices on smaller
cabin, Hawker
Beechcraft models
have generally
continued to be
pushed downward
due to an over-
supply of used
aircraft on the
market and a general
lack of demand.
Back to aircraft listing
0
10
20
30
40
50
60
Hawker 800A Hawker 800XP Hawker 850XP Hawker 900XP Hawker 4000
HAWKER BEECH – Midsized Aircraft Available
Hawker 800A & 850XP
inventory levels have
come well off peak
numbers in recent
months. 800XP
availability has actually
increased since the
first of the year and
availability of the
newest Hawker models
including the 900XP
and 4000 remain low.
Back to aircraft listing
0
2
4
6
8
10
12
Hawker 800A Hawker 800XP Hawker 850XP Hawker 900XP Hawker 4000
HAWKER BEECH – Midsized Aircraft Sold
Sales on the midsized
Hawker models seem
to have spiked every
other month or so over
the last year. Sales
figures declined as the
summer slow down
took effect in July &
August, but should be
back up when Sept. &
Oct. numbers are in.
Back to aircraft listing
$1,000,000
$3,000,000
$5,000,000
$7,000,000
$9,000,000
$11,000,000
$13,000,000
$15,000,000
$17,000,000
$19,000,000
Hawker 800A Hawker 800XP Hawker 850XP Hawker 900XP Hawker 4000
HAWKER BEECH – Midsized Aircraft Asking
Just about all models of midsized, Hawker Beech Aircraft have experienced continued price declines over the last 12 months, with the exception of the 4000 which has been relatively stable, but only had 1 or 2 units for sale over that time.
Back to aircraft listing
10
15
20
25
30
35
40
45
50
Mustang CJ1 CJ2 CJ3 Bravo
CESSNA – Small Cabin Aircraft Available
Inventory levels on
all small cabin, Cessna
aircraft that are out of
production have
continued to rise,
while supply of current
production models
have been coming
down since early
spring.
Back to aircraft listing
0
5
10
15
20
Mustang CJ1 CJ2 CJ3 Bravo
CESSNA – Small Cabin Aircraft Sold
Trading on CJ1s, 2s,
3s & Bravos has been
light so far in 2010.
Mustangs sales spiked
in March and May
driven primarily by new
aircraft deliveries.
Demand for low time,
newer vintage CJ’s has
picked up significantly
since early September.
Back to aircraft listing
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
Mustang CJ1 CJ2 CJ3 Bravo
CESSNA – Small Cabin Aircraft Asking
Although asking prices
seem to have leveled
off on small cabin
Cessna aircraft, Sellers
must continue to get
aggressive with
negotiations in order
to motivate buyers to
move forward. Actual
sales prices continue
to be driven down in
today’s market.
Back to aircraft listing
10
15
20
25
30
35
40
Encore XLS Sovereign Citation X
CESSNA – Midsized Aircraft Available
Availability of midsized
Citation models saw
a steady decline from
the first of the year
until late spring, when
Encore & XLS
inventories began
climbing a gain.
Supply of Citation X &
Sovereign aircraft are
well off peak numbers,
but both have
increased in recent
months.
Back to aircraft listing
0
2
4
6
8
10
Encore XLS Sovereign Citation X
CESSNA – Midsized Aircraft Sold
Sovereign sales were
fairly steady in the 2nd
& 3rd quarters, and the
Citation X market was
active during the 2nd
quarter. XLS and
Encore sales have been
sparse so far this year
with little increase in
activity in recent
months.
Back to aircraft listing
$1,000,000
$3,000,000
$5,000,000
$7,000,000
$9,000,000
$11,000,000
$13,000,000
$15,000,000
Encore XLS Sovereign Citation X
CESSNA – Midsized Aircraft Asking
The recent increase in
supply and relatively
few transactions to
point to on midsized
Citations the last few
months have lead to
continued price
reductions across the
board.
Back to aircraft listing