“"How many leaders actively seek out and encourage views alien and at odds with their own? All too few...Who in your organization serves as your Challenger In Chief? Interrogating the choices you are considering making? Making you consider the uncontemplated, the unimaginable and that which contradicts or refutes your position? And also challenging you?"”
Preowned Aircraft Annual Report 2010
We'll remember 2010 as a year when bargain hunters snapped up business aircraft at prices that left some sellers with a sense of disbelief.
The large-cabin segment was among the brightest, particularly for Gulfstreams, as buyers showed favoritism for sub-$20 million GVs, $10 million to $12 million GIV-SPs and sub-$10 million GIVs. The pricing "adjustment"-which is probably too innocuous a word for what really happened to values-was clearly the necessary fix, as evidenced by the substantial number of Gulfstreams that traded hands. A 50-percent discount from 2007 peaks brought buyers back to large-cabin legacy Gulfstreams with a vengeance, while less sizable but clearly attractive price breaks applied to those still in production.
Bargain hunters are definitely out shopping, but some markets are languishing, as sellers have been slow to accept what appears to be the new normal in pricing. Twenty used Learjet 60s sold over the last 12 months, but only about a quarter of these transactions occurred during the past six months. A handful of Learjet 60s selling in the $2 million range ignited a flurry of buying, but those low-price opportunities may now be gone. This may explain the drop-off in transactions to one a month during a recent six-month period, leading to a slight inventory increase from the 2010 low reached in May.
Similarly, either because of competitive factory pricing or because there are just too many good choices of the earlier variant available, there hasn't been a single used Learjet 60XR to sell this year. This is probably about to change as compelling prices are beginning to infiltrate this market and buyers seem ready to pounce.
So, as 2010 ends, we see some market segments showing signs of life while others remain on life support. Considering the economic backdrop the situation appears somewhat improved. Those waiting for the overall market to come back will likely continue to wait while others who heed the examples set by the large-cabin segment will recalibrate their expectations, acquiesce to pricing pressure and put a mark in the sales column.