JetNet issues July 2011 pre-owned market data

JetNet issues July 2011 pre-owned market data

31-Aug-2011 Source: JetNet

JETNET LLC, the leading provider of corporate aviation information, has released July 2011 and the first seven months of 2011 statistics on pre-owned business jet, business turboprop, and helicopter markets.

The 2nd half of 2011 begins with mixed signals on market recovery from both new and pre-owned fixed wing and rotary marketplaces.

  • New aircraft deliveries are down 16% and billing is down 22% compared to 2010
  • Business Jets showed the largest decline, down 26%
  • Cessna is the only OEM in the Top 6 to show an increase in new deliveries: up 35%
  • Dassault Falcon and Embraer are down 58% and 48% respectively
  • Pre-owned Business Jet Sale Transactions are up 11.2%
  • Average Asking Price is down by 9.2% but showed increases in June and July 2011 vs. 2010
  • For Sale inventories have continued to slowly drop to 13.7% for business jets and 10.1% for business turboprops
  • Jet-A Fuel Prices have increased steadily and are within 3% of the previous 2008 record level
  • The U.S. Economy had a weak 1% GDP growth (“second” estimate) in the 2nd quarter of 2011

JETNET reported that the first six months of the 2011 pre-owned market showed early-stage recovery signs. In July this trend continued as JETNET reported double-digit growth of 11.2% in pre-owned business jet retail sale transactions in the first seven months of 2011. However, the average asking price in June and July improved by $1.2 million and $2.7 million respectively compared to 2010, a trend seen for the first time in 2011. Two consecutive months of increases in the average asking price for business jets is a clear signal that the bottom has been reached in average asking price and that a turn-around is in the works.

Market Summary
Among key worldwide trends, Business Jet inventory For Sale percentage showed the largest change (down 1.2 points), to 13.7% from 14.9%. The only sector to show an increase in for-sale inventory was the piston helicopter market, from 6.3% in July 2010 to 6.5% in July 2011. Business Jet Sale Transactions increased 11.2% in the first seven months of 2011 compared to the same period in 2010. Business turboprops also showed an increase of 3.7%. Both helicopter categories saw double-digit declines in sale transactions (down 11.5% for turbine and 17.7% for piston) in the first seven months of 2011 versus the first seven months of 2010.

After seven months, all pre-owned aircraft categories showed large decreases in average asking price percentages except piston helicopters, which showed an increase of 5.2%. The decrease in average asking price ranged from a -9.2% for business jets to -3.8% for business turboprops and -11.0% for turbine helicopters.

Business Jet For-Sale Fleet Age
Aircraft age is split between aircraft that are less than 20 years old, and 21 years and older. While the total percentage for sale in July 2011 is at 13.7% compared to 12.6% in July 2006, there has been nearly a doubling of aircraft for sale today for aircraft 20 years or less in age, at 1,239 (10.1%) compared to 664 (7.6%) in July 2006. The for-sale percentages of aircraft 21 years or older are nearly the same—21.1% in July 2011 versus 20.8% in July 2006. The 21 and older age group percentages for sale are very high and account for 1 out of every 5 being offered for sale.

US JET-A Fuel Prices
The 2nd quarter 2011 U.S. Jet-A prices at $6.63 per gallon are on the rise, up $1.10 per gallon (19.9%) from $5.53 in the 2nd quarter 2010. The current fuel price is only 20 cents below the 2008 record-setting price of $6.83 per gallon.

US Economy
Real gross domestic product increased at an annual rate of 1.0% in the 2nd quarter 2011, according to the second estimate released by the Bureau of Economic Analysis. In the 1st quarter, real GDP increased 0.4%. Historically, with a GDP of greater than 3.0%, the business aviation market is in a growth mode.

Summary
Market recovery in the 2nd half of 2011 depends on stronger U.S. GDP growth, fuel prices being held in check, and a rise in new aircraft deliveries. The pre-owned market has been slowly improving in 2011, and the average asking price for pre-owned business jets has improved in the past two months, positive signs for business aircraft owners.

Since 1988, JETNET has delivered the most comprehensive and reliable business aircraft research to its exclusive clientele of aviation professionals worldwide. JETNET is the ultimate source for information and intelligence on the worldwide business aircraft fleet and marketplace, comprised of some 60,000 airframes. The company offers services for both fixed wing and helicopter aircraft. Headquartered in its state-of-the-art facility in Utica, NY, JETNET offers comprehensive user-friendly aircraft data via real-time internet access or regular updates.

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