Evaluating an Astonishing Market Reversal

The pandemic, which marks its second anniversary next month, has upended the preowned aircraft market along with the rest of business aviation, as post-lockdown travel has created an unprecedented wave of new-to-bizav consumers. Anyone in the preowned market today knows prices have risen—an unthinkable prospect before COVID. But by how much? Comparing prices over time is complicated by the need to account for differences in equipment, ages, models, and flight hours among aircraft for sale at any point.

JetNet incorporates data on all these factors to create average figures that can provide a more balanced perspective for price comparisons. We asked the bizav data specialist to give us category-by-category snapshots of preowned pricing, inventory, and sales activity over six-month periods during the pandemic. (See file attached at the end of this article.) We’ve assembled this overview from JetNet’s data, forecasts, and comments.

The preowned market looked promising when the pandemic began, as the market had “finally broken below the 10 percent threshold”—the dividing line between a buyer’s and seller’s market—for two years running, JetNet noted in its annual (2019) preowned market review. It added, however, that “models still exhibit the soft pricing brought on by the diminishment of residual values that completely dominated the post-recession years.” 

Then came the lockdown, which briefly tanked sales and values before an astonishing market reversal took hold. 

Light and Super-light Jets

Light jets have never punched above their weight class in sales activity, as most buyers want the range and/or capacity of midsize or larger models. But entry-level jets nonetheless have “demonstrated a firming in price and units sold over much of the pandemic period,” says Paul Cardarelli, JetNet’s vice president of sales, with values peaking in the second half of 2020 at just under $1.9 million for a 23-year-old model with some 6,200 flight hours. 

Transactions topped out in the second half of last year, at 630 units, and over the two years, the percentage of the fleet for sale fell from 10 percent in the first half of 2020 to 5 percent by the second half of last year, and by January just 244 jets in this category, or 3.5 percent of the fleet, was available. The average aircraft is “a rather market-irrelevant 31-year-old model” with about 6,400 hours of flight time, Cardarelli says. The $1.46 million ask price is 22 percent below market peak. Based on January’s figures, JetNet predicts that fewer than 250 light jets will change hands in the first half of this year.

Midsize and Super-midsize Jets

Values peaked in the second half of 2020 for midsize and super-midsize jets, with an average 21-year-old model with about 6,700 flight hours fetching just under $3.1 million. Since then, the ever-popular category has seen the biggest drop in value, reflecting the scarcity of desirable models. Upwards of 500 were for sale in both the first and second half of 2020, but the number on the market fell by more than half during the pandemic (from 566 to 273) as inventory shrank to 5 percent. By the end of January, with just 3.3 percent of the fleet available, the average aircraft for sale was a 27-year-old airframe with about 7,600 hours total time, offered at $2.31 million, about 25 percent below the apex. Sales in the first half of this year are expected to be “down sharply,” to under 200 units; 26 were sold or leased in January.

Large-cabin Jets

Like light and midsize jets, large-cabin models reached their peak price in the second half of 2020, when a 19-year-old aircraft with some 6,600 flight hours commanded $5.23 million, and sales activity topped out at 196 units—almost matched by the 190 jets that changed hands in the second half of last year as fleet availability dropped from 9 to 5 percent. After falling throughout 2021, prices are rebounding. In January, 54 of these jets were available—2.5 percent of the fleet—represented by a 25-year-old airframe with about 6,600 hours priced at $5.04 million, recovering to only 2.5 percent below peak. However, days on market—a telling indicator of the overall desirability of what’s for sale—increased significantly, from 394 in 2020’s second half to 497 in the same period last year. The 18 sold or leased last month suggest that about 150 will change hands by July.

Large, Long-range Jets

Values of large, long-range jets took an early pandemic hit, as these models were among the most affected by the lockdown’s international travel restrictions. Their prices rebounded strongly, however, with values peaking in the second half of last year; a 17-year-old, 5,900-hour airframe was selling at $12.85 million, more than 20 percent over the $10.1 million price a year earlier. As JetNet notes, by then prices in all other categories were in decline. In January, with 56 for sale, the average 20-year-old, 5,900-hour jet was going for about $12.04 million, and based on that, “one could argue that prices in this segment are in fact firming,” says Cardarelli. “If the pandemic teaches [the business aircraft market] anything, it is that demand for large, long-range jets endures even through the worst of times.” With 13 units sold or leased in January, about 100 transactions are expected in the first half of the year.

Large, Ultra-long-range Jets

The average value of large, ultra-long-range preowned jets fell drastically during COVID’s first year, down almost 28 percent (from $25.97 million to $18.79 million) between the first halves of 2020 and 2021. But after rebounding in the second half of last year, these world travelers in January had an average ask price of $27.84 million for the market average 11-year-old model with 2,600 hours—roughly the same average aircraft as was available before the market dropped but now priced 7 percent higher.

With just 2 percent of the fleet for sale in January, this segment represents the strongest bizjet sellers’ market, JetNet notes, but the mere eight units sold or leased in January point to sales “down sharply” to some 50 aircraft in the first half.

VIP Airliners

While other categories heated and cooled, VIP airliners remained in the bargain bin before 2022, as prices declined throughout the pandemic, falling more than 18 percent from the first half of 2020 through the second half of 2021 (from $31.26 million to $25.42 million). But the segment is resurging in 2022, with January’s average ask price at $29.52 million. Nonetheless, 7 percent of the fleet is available, while the figure for all other business jet categories stands at 4 percent or less. With three units sold or leased in January, JetNet forecasts 15 transactions through June.

Turboprops

For single-engine turboprops, pandemic prices held firm until they dropped less than 2 percent in the second half of last year, then climbed to new highs to start 2022. The average asking price is $1.8 million for an average 16-year-old aircraft with about 2,400 hours; that compares with $1.73 million for a similar average in the first half of 2020. Cardarelli calls the category seemingly “immunized from the market woes of the COVID pandemic.”

With 19 units sold or leased in January, single-engine turboprop transactions are trending “down sharply,” with fewer than 150 expected to trade hands in this half of the year.

Multiengine turboprop prices, in contrast, have fallen more than 19 percent from the first half of 2020 through this January, with the average now below $1 million. Most available aircraft are more than 35 years old, and operators appear to be “vacating this market segment in favor of single-engine models or even light jets,” Cardarelli says. Fewer than 150 transactions are forecast for the first half of the year; 22 units were sold or leased in January.

One inescapable conclusion you can draw from all the above: “Buyers need to be patient, they need to be ready to act fast, and they need to be prepared to pay ask price, if not more,” says Cardarelli. “They are in no position to negotiate today.

“Most of the those I speak with seem to expect this situation to carry on through at least the second quarter of this year,” he adds, “but we’ll just have to wait and see.”