Analyst Warns of Possible Bizjet Bubble

Newly released analysis from Ascend by Cirium shows that market values for many business jets have increased—perhaps unsustainably—during the post-pandemic period on a constant-age basis (comparing aircraft of the same age over time).

While the preowned business jet inventory increased in the second half of 2022, pricing for completed transactions also rose and “buyer distress” transactions—where customers were willing to pay higher prices, above the asking price in some competitive situations—continued throughout the year.

Business jet values soared due to various factors, including the surge of new users into the market since the pandemic began, according to Ascend senior appraiser and principal aviation analyst Syed Zaidi. Midsize jet values jumped 60 percent from a year ago, for example, and very light and super-midsize jet prices rose approximately 45 percent. Long-range jet values increased by 20 percent year-over-year.

Zaidi warned that market values may have entered “bubble” territory and represent a risk to owners, financiers, and investors. He noted that the market-to-base-value ratios his company uses as a measure of potential risk are “significantly” above 100 percent across most aircraft segments. He added that as the airlines continue to repair their schedules to pre-pandemic frequencies, the staying power of those new users will prove a true test for the business aviation industry.