Now that we are officially in the 4th quarter of 2023, and the NBAA convention is starting up next week, I thought it might be a good idea to update you on the current market conditions we are seeing in the Turbine Aircraft Marketplace. To help paint a clearer picture, I have attached two documents for your reference: A Jet market summary and a Turbo-Prop market summary.
Jet Market
The first document provides some data trends we have been seeing in the jet market over the last 12-months. Inventory levels have been steadily climbing over the last year and have experienced a roughly 40% increase from this time last year. Although that is quite a swing, considering that supply was at an all-time historic low 12 months ago, the increase has now brought supply levels to just under 7% of the in-service fleet, which I would consider to be a fairly “balanced market”.
Asking prices have been up and down over the last year but have been generally trending downward since Q1. It’s a split market right now with some models experiencing steep price drops while others have been mostly flat and some even continued to experience modest increases in value. It is also taking longer for aircraft to sell right now with the average jet aircraft having been on the market for 242 days. Jet Market Snapshot
Turbo-Prop Market
Trends in the turbo-prop market are similar to that of jets, but not quite as extreme. Inventory levels have climbed ~ 30% over the last 12 months and supply currently sits at just under 4% of the fleet. Average asking prices have been a bit more sporadic, but overall are down slightly from where they were this time last year.
The average turbo-prop has been on the market for 265 days and sales activity peaked in December of 2022, like it did on jet aircraft. Turboprop Market Snapshot
Take Aways
Overall, demand is still be there, though not quite to the levels it was last year. There is greater supply and Sellers are being much more realistic and willing to negotiate reasonable and more even-handed terms on a sale. It’s a far more balanced, reasonable and sustainable market right now than it has been during the frenetic buying seasons of the last two years.
Buyers are still able to take 100% depreciation on the purchase of an aircraft placed in service by year-end (with help of your tax advisor), and that still seems to be a strong motivator for a certain percentage of the buying population. But, getting a pre-buy slot and getting the aircraft through inspections and returned to service by year-end is going to be a challenge. If that is your goal, I would suggest pushing all ahead full as soon as possible.
The current market can be challenging and one in which there where there will be some surprises. It’s one where an experienced broker can help you navigate those surprises and keep things moving forward to help you accomplish your goals. But, its also one where Buyers and Sellers need to cooperate in order to get a deal done. Parties on both sides of the transaction will need to work together toward the common goal of completing a sale by year’s end as opposed to viewing yourselves as opponents, or risk missing that deadline.
I hope you find this information helpful. If you would like any more information on the general turbine aircraft marketplace, would like to know where prices are heading on your current model of aircraft or any aircraft you may be considering as replacement, please don’t hesitate to reach out.
I’d also be happy to visit in Las Vegas next week if you will be in attendance at NBAA.
Kind regards,
Toby Smith