I recently sat down with the Duncan Aviation Aircraft Sales & Acquisitions team to get their insight into the 2024 preowned business aircraft market and to see what to expect if you’re considering buying or selling your aircraft. Here’s what they had to say.
Duncan Aviation Aircraft Sales & Acquisitions Sales Rep Doug Roth is predicting a more stable market for 2024 across all model segments, as the balance between available aircraft and buyers seems to be at normal historic levels.
“Aircraft prices have come off their highs from the end of 2022 and have settled at a level that could be considered normal market depreciation from the values at the end of 2019, making it more of an opportunity for buyers,” says Doug. He points to the current book values of the G450 as an example. “The values for the G450 today are just slightly lower than they were in 2019. This price decline results from increased available aircraft for sale and some economic uncertainty among buyers.”
He goes on to point out that during the first quarter of 2024, buyers seem to be looking and ready for a good opportunity. While the number of G450s for sale has remained about the same since October 2023, the overall average of mid-size and long-range business jets for sale has declined from a peak in November 2023.
Tim Barber and Leah Alexander, EMEA Aircraft Sales & Acquisitions Sales, agree that the 2024 market will be comparable to 2023 in terms of the number of transactions and anticipate that prices will return to pre-pandemic levels. They predict that by year-end, the market will reflect where it was in 2019.
Leah says supply chain issues have eased, and new business jet delivery volume is steadily growing to meet this healthy demand. “The OEM book-to-bill ratio has stabilized, and the pre-owned inventory continues to rise. We will see a more balanced market between buyers and sellers, even in the newer airframes.”
Accepting a Loss
Aircraft Sales & Acquisitions Sales Rep Rene Cardona says that buyers who purchased their aircraft at the height of the market in 2022 and seek to sell now will likely need to accept a loss.
“Nevertheless, certain segments are doing better than others,” he adds. “If you purchased an aircraft in a strong segment today, the value is more likely to hold. Thus, without a clear volume of first-time buyers hurrying to exit the market, 2024 doesn’t appear it will be remembered as the year of the fire sale.”
The Year of Elections
2024 is a year of elections, with 64 nations heading to the polls, including the United States. There is always a chance that election results will cause a market reaction. European elections, in particular, will be worth watching because of the number of countries falling into the trap of pandering to extremist demands for bans on business jets.
Tim feels it’s inevitable that we will see a ban in at least one country over the next 24 months, and when that happens, the rest of the EU (European Union) will be watching. “Each year in the EU, the number of green MEPs (Members of European Parliament) increases and currently sits at around 7.5%. Sadly, these new politicians seem oblivious to the impact their initiatives and desires have on the economy.”
While there is often a perceived let’s wait and see approach to making major equipment purchases in election years, Aircraft Sales & Acquisitions Sales Rep Ann Pollard has never seen solid evidence to support this.
“Here in the United States, I believe that most companies or individuals utilizing the tools of private aviation will not let the winds of political change determine their fate or force them to operate less efficiently while Washington D.C. chaos continues to churn.” Ann goes on to say that with prices stabilizing and the number of available aircraft and transaction terms normalizing, private aircraft, a critical tool for the successful operation of any dynamic enterprise, are sound investments.
Rene agrees that whichever party wins does not tend to have much of an impact, as the economy is ultimately much larger than the outcome of a Presidential election. “Barring an unforeseen exogenous event, the market will continue to correct itself, moving in a positive direction.”
Political Instability and Geopolitical Factors
Ann says that geopolitical factors will undoubtedly impact global markets in 2024. However, barring a significant expansion of violence involving multiple superpowers, the world seems to have adjusted to the fact that there will be increased instability in many areas of the globe at any given time.
“We’ve become conditioned to the threats of bad actors. We’ve weathered a pandemic, fended off recessions, and, in many cases, emerged stronger, smarter, nimbler, and more resilient,” said Ann. “With respect to the need for business aviation, it’s never been more obvious. Every commercial flight we take reinforces that. There is no substitute for the security, safety, and efficiency of business aviation. During the pandemic, many more consumers experienced those benefits, and they aren’t lining up to return to the long list of issues that define commercial air travel today.”
That said, the political instability in certain parts of the world—Israel/Palestine, Russia/Ukraine in particular—has the potential to throw all of these predictions up into the air, but equally, any resolution of these conflicts may also assist the market.
Leah states that although the European market appears sluggish in the near term, they’re finally seeing the post-Covid flight activity rebound in Asia.
“There’s been a noticeable increase in demand for large-cabin, long-range jets in the APAC region, which speaks to positive economic sentiments and anticipated market growth,” she explained.
Business aviation will continue to be a critical spoke of our multimodal transportation system, connecting cultures and economies around the globe in tangible, meaningful ways. In all areas of the industry, billions are being invested in greener initiatives like SAF (sustainable aviation fuel), new engine and airframe technology, electric and hydrogen-powered aircraft, and other advancements. Like most industries, the aviation industry will continue to invest in greener technology because it makes sense to conduct operations in the most efficient, cost-effective, and greenest way possible. As we continue striving to reach these goals, people and goods still need to reach destinations worldwide. Businesses and individuals will continue to buy, sell, and operate aircraft to meet their unique and diverse mission requirements.
Starting the process of buying or selling an aircraft earlier in the year ensures sufficient time to analyze data and make the right decision at the right time.
“First-time buyers and experienced flight departments alike are wise to engage a reputable and qualified brokerage and acquisition consultant,” said Ann. “This will ensure they are empowered with the information they need to analyze factors such as current and future mission profiles, budget forecasts for upcoming major maintenance events versus upgrading to an alternate aircraft, available modifications that may improve efficiencies and performance, market conditions, equipment obsolescence, operating constraints due to upcoming airport construction projects, infrastructure and personnel availability, and other factors.”
The purchase and sale of business aircraft can be a complex undertaking that requires expertise to ensure a maximum return on investment. Throughout the process, you must skillfully meet head-on the myriad of one-offs, hurdles, and challenges unique to every transaction. It is imperative that you have someone you trust to represent your interests and mitigate your risks.
Duncan Aviation was founded as an aircraft brokerage organization and has been helping jet and turboprop owners with the sale and acquisition of aviation assets for more than 68 years.
If you are considering buying or selling a private jet at any time in the future or have questions about the current business jet market, don’t hesitate to reach out to our Aircraft Sales & Acquisitions team at AircraftSales@DuncanAviation.com or by visiting DuncanAviation.aero/AircraftSales.
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