Our industry-leading market intelligence shows transaction values hit a record US$16.3B in 2022 – in part due to the resurgence of corporate aviation – with the corporate buyer roaring back to life following a dip during the pandemic. The share of our buyers from the corporate sector reached 60% in the last year, demonstrating the value businesses place on jet ownership to facilitate in-person meetings.

Nothing beats meeting face-to-face when it comes to finalizing major deals, with video conferencing only ever a temporary substitute. Whether it’s a company acquisition or a new product launch, face-to-face interactions offer the ability to read body language and build relationships, which create the foundations for success. Equally, the return of industry events, such as EBACE and NBAA, underlines the value of human connection, with surveys also revealing a strong preference for in-person events over virtual.

More favorable economic conditions for businesses

While corporations have once again become more active in business aviation, the current economic conditions are another reason they might be more likely to invest in aircraft ownership than individuals.

This is because, at a time of high inflation, cash-rich businesses can purchase aircraft outright, as opposed to taking out financing agreements that might involve higher-than-usual repayments. This has resulted in a buildup of manufacturer backlogs as corporates invest in pre-owned and new aircraft.

For individual buyers, it’s even more important right now to benefit from Jetcraft’s uniquely comprehensive market oversight in order to find value. Equally, our financial strength, with credit lines in excess of $150m, mean we can handle the most complex of transactions.

When it comes to realizing opportunities and finalizing deals, the value of meeting face-to-face is also important at Jetcraft. It’s why we have 80+ aviation experts across the globe and are never more than three hours away from a potential buyer or seller. We’re always on-hand to meet with clients and advise on the right aircraft for them. To find out more, connect with our team: jetcraft.com/contact/

Naturally, during the pandemic, the level of activity from corporate buyers significantly tailed off, with many businesses establishing policies advising against travel.

The good news for our industry is that, with the world once again open for business, corporate travel is increasing, and companies are looking to renew their fleets as they restart their travel planning.

These are market developments that reflect our own optimistic outlook in our recent 5-Year Pre-Owned Business Jet Market Forecast.

Rising to the challenge

Corporate fleet planning, in which businesses begin evaluating opportunities to update their aircraft, typically takes place months in advance of aircraft replacement, meaning a dialogue should be constantly ongoing between aircraft suppliers and buyers.

With these conversations dropping off due to the pandemic, as well as some corporates selling aircraft fleets completely during 2020, there is added pressure on flight departments to act quickly in order to fulfil travel needs.

UHNWI interest in business aviation is still extremely high and aircraft inventory remains relatively low. This makes it even more important for corporate fleet planners to work with the right company to source fleet replacements and manage their transactions.

Buying incentives

Additionally, in the US, the end of this year will mark the closing of 100% bonus depreciation – which allows a business to write off the total cost of their investment into an eligible asset from their taxable profits, as opposed to writing the value off over the ‘useful life’ of the asset. With 100% bonus depreciation facing an intended ladder step down of 20% each year beginning in 2023 – before it ends completely in 2027 – now is a particularly financially attractive time for US corporates to buy – adding to the pressure of aircraft sourcing.

For corporate buyers who can take a longer-term view, the strength of the dollar against other currencies means we will see more pre-owned aircraft come to the market as European and Asian owners look to sell – with aircraft trading in dollars, international sellers converting the proceeds of their sale into weaker currencies will benefit from exchange rate gains.

As Ever Forward, our 5-Year Pre-Owned Business Jet Market Forecast, shows, transaction volumes will see steady growth through 2026, with more than 2,000 transactions forecast per year.

Ultimately, strong demand across the globe from different customer and aircraft types mean the overall health of the market is sustainable and predictable. This has translated into strong performance for many manufacturers, which are currently enjoying healthy order books bolstered by large corporates’ increasingly advanced planning.

Our industry remains in demand, so corporate buyers that need to replace aircraft shouldn’t delay. To find out more about how we can assist you, please contact your nearest Jetcraft sales representative to discuss your options.

The good news for prospective buyers is that when we take a more sophisticated approach and assess lasting trends, there is plenty of value to be found. For example, a five-year-old Gulfstream G550, which, while trading at a higher price than it was during the market lows of the pandemic, is still available at around 50-60% of its new price on the pre-owned market, which represents a healthy depreciation curve for buyers.

We’re now entering a period of market stability, so both buyers and sellers should be getting fair deals, with key barometers, such as fleet operator acquisitions, suggesting it’s unlikely there will be any significant drop in prices imminently.

However, while a stable market helps with values, market conditions aren’t a guarantee and there are several other key considerations when buying or selling your aircraft.

Value relies on the right advice

Professional, impartial advice can be worth millions of dollars to pre-owned aircraft buyers. An objective advisor not only takes the emotion out of a purchase to provide an objective assessment of value, but also offers market intelligence that helps minimize surprises, whether these relate to technical, legal or operational issues.

Because there is currently an undersupply of pre-owned jets, having an expert on hand can help buyers to avoid overpaying or making snap decisions in response to the more limited choice on offer. That means buyers are more likely to be recommended a technically sound aircraft, which fully meets their requirements, at a fair price.

Sellers benefit from expertise

Sellers are also in a good position, with low inventory meaning they are likely to have plenty of potential buyers. Despite this, expert advice also remains important for sellers. This is because solid market intelligence can help sellers to maximize value, while the qualified network that external experts have access to significantly boosts sellers’ market exposure and minimizes time to sell.

Whether it’s qualifying buyers, bringing them to the table, or guiding them through the legal processes, sellers will nearly always benefit from having impartial experts in their corner, with extra sale value, an expedited selling process and greater market exposure worth significantly more than the typical fees that are involved in engaging experts.

Ultimately, even without a backdrop of Covid-19 and the current commercial aviation chaos, a proper understanding of long-term trends reveals that pre-owned aircraft offer good value to buyers, while representing a fair deal for sellers. Sourcing the expertise offered by Jetcraft, with its market intelligence and global network is the best way to realize this opportunity. To find your next aircraft, visit www.jetcraft.com.

In private aviation, the decision to upgrade or replace an aircraft has traditionally required an owner to sell their asset to fund their purchase, a process that often takes months and involves considerable downtime on the ground. Trade-in transactions, on the other hand, provide a swift, and seamless alternative, where the broker or dealer accepts a client’s current aircraft in exchange for another. With a trade, the owner simultaneously transitions into ownership of their new aircraft, eliminating the risk of holding and selling their asset and avoiding a costly crossover period.

Reducing transaction time and complexity

A trade-in transaction essentially combines two events – the aircraft sale and purchase. There is only one contract, and an aircraft owner will deal with one invested partner for the trade, rather than two disconnected parties with bilateral interests. Importantly, the pre-buy inspections will also occur at the same time.

As we emerge from the impact of the Covid-19 pandemic, our current focus is to reduce the timeframe in which an aircraft transaction is executed. With a trade, and a devoted player handling both the buying and selling, the timeline can be cut in half. At the time of writing, the fiscal year end in the United States is fast approaching, offering another reason to consider the benefits of a trade-in transaction.

Trades in a low inventory market

Worldwide, pre-owned inventory is at the lowest level for 30 years. When supply is this low, trade-ins offer one of the easiest and fastest ways for business jet owners to upgrade their aircraft and react to today’s rapid transaction pace. We’re currently seeing the heaviest demand for new airplanes in the Americas, with aircraft often being sold before they officially hit the market. It’s important therefore to broaden your gaze, reviewing options from international emerging markets to widen the pool in which to trade.

At Jetcraft, we offer clients complete confidence that due diligence has been carried out on their next aircraft, wherever it is from, through our rigorous program of pre-buy inspections, maintenance and title checks, and registry transfers. With a trade-in transaction, the complexity and burden of purchasing an aircraft from overseas is removed.

Choose a trusted partner

For decades Jetcraft has served as a trading partner for the world’s Ultra High Net Worth Individuals (UHNWIs) and public companies. Our deal resume has been established by equitable business practises, our financial strength and diverse credit lines which enable us to offer generous trade-in terms. With a global team across the Americas, Asia Pacific, Russia, Europe, the Middle East and Africa, we’re able to identify opportunities for our buyers and sellers, giving them an edge in today’s market.

The key to a successful trade is to choose a partner that is neutral and objective, with the unique ability to take in trades for a broad range of aircraft models. To find out how Jetcraft can support your next transaction contact us at info@jetcraft.com or +1 919 941 8400.

On behalf of everyone at Jetcraft, we would like to thank all our clients, employees, partners, vendors, and friends for their continued support. Now, let’s look ahead to business aviation in 2021.

A tool for health, protection and productivity

With the continued presence of Covid-19 around the world, travel health will remain a big priority as the psychology of protecting your ‘bubble’ continues. Researchers from the University of London argue that it can take between 18 and 254 days to change a habit. We’ve now learnt to live with our ‘new normal’ for much longer than this, suggesting some patterns of behavior will be permanently altered. New users to business aviation are likely to keep coming back to our industry because they appreciate the safety and protection it offers them and their families through reduced touchpoints, as well as the ability to fly a more direct route.

As these new entrants have come to realize, business aviation brings a lot of value to their lives, particularly while commercial aviation schedules are shelved. In January 2021, the International Air Transport Association (IATA) forecast airline activity will at best reach just 50.6% of 2019 levels, so we expect more individuals and companies to turn to private charter, fractional, jet card programs and ultimately, aircraft ownership as a solution to unpredictable schedules. Moreover, a general industry move towards new technology and greater pricing transparency will continue to make business aviation more accessible, lowering the barriers to entry.

Heightened growth

Ultimately, more users in business aviation means the industry will grow to new levels. The influx of new users is complemented by the surge in ultra-high net worth individuals (UHNWIs) joining the market. In our 5-Year Pre-Owned Business Aviation Market Forecast, we noted that the number of UHNWIs is set to rise by almost 5% per annum until 2024.

We also expect to see the pent-up demand for travel during Covid-recovery play out regionally, with a particular area of growth across Asia-Pacific. We’re seeing good momentum from Southeast Asia, including Singapore, Malaysia and Indonesia where a greater acceptance of pre-owned aircraft among buyers, and the driving force of geography itself, is piquing interest for larger, long-range jets that can fly intercontinental journeys. Business aviation utilization data tells us the Americas and European regions are rebounding (albeit the Americas at a faster rate), with the Latin American market also ripe for growth.

For price conscious first-time buyers, the market for pre-owned business aviation aircraft is much healthier today than the balloon economy we saw during the 2008 global financial crisis. Instead of extraordinary manufacturer lead times which artificially inflated the prices of used aircraft, today, manufacturers have a balanced supply chain which doesn’t let values get out of sync. There’s much for new entrants to our industry to benefit from.

Sustainability will return to the fore

Before Covid-19, the reporting of the world’s media was dominated by sustainability, putting pressure on airlines, operators and transport providers to show the steps they were taking to reduce their contribution to global carbon emissions. This year, that focus will return, and business aviation is ready.

The National Business Aviation Association (NBAA) and the European Business Aviation Association (EBAA) are among the drivers of the SAF Coalition – dedicated to promoting the use of Sustainable Aviation Fuel within our industry. In August 2020, they released their latest guide on SAF adoption for industry leaders, reporting increased demand from customers, as well as governments and lawmakers, keen for decisive action.

Electric aviation is another trend to closely watch in 2021. Planes that can fly up to nine passengers on electricity over fossil fuels are already in the test flight phase, while electric vertical take-off and landing (eVTOL ) aircraft promise green solutions to urban congestion in the not too distant future.

A year of opportunity

Historically, business aviation has recovered in line with economic growth. However, we believe our industry will play a significant role in driving economic recovery this time around. A rising tide floats all boats, so, with business aviation utilization currently the closest it’s been to pre-Covid levels, and as more people appreciate the value private jet travel brings, there are real opportunities for our future and of the economies that benefit from the sector.

We expect the turning point for business aviation activity to be midway through the year. With this outlook and the number of sale acquisition enquires we’ve already received this year, I truly believe we can look ahead to 2021 with hope and more happy landings.

This year, we are focusing our predictions solely on the pre-owned market, an area often excluded from other industry outlooks and which is a particular strength of ours. Moreover, for the first time, our forecast is enriched by the introduction of trends from our own past transactional data and customer insights.

In our previous forecasts, we did predict a downturn. Although it has taken place sooner than we thought, we were prepared and, as a result, are in a stronger position than 2008, the last big downturn for our industry.

During the five-year period we will see pre-owned transaction volume and value recovering to steady growth, despite the challenges of this year, reaching 2,271 pre-owned transactions worth $11.1B annually by 2024.

Business aviation is resilient, and our forecast shows it has begun to stabilize from the effects of Covid-19 as more people realize its value. Furthermore, trends in international trade activity bode well for industry growth. According to the World Trade Organization, trade volume is expected to rebound in 2021. Another key driver in business aviation transactions is the increase in the number of ultra-high net worth individuals (UHNWIs), which is set to grow by 5% per annum until 2024.

Drawing upon nearly 60 years of industry knowledge, this is the first year we are incorporating our own past transactional data and customer insights into the forecast, delivering a unique look at buyer behavior. Our data shows Large Jets representing a strong share of purchases by younger buyers, and that High Net Worth buyer types are more likely to invest in this aircraft segment as compared to Corporations and Governments. These trends, coupled with the predicted increase in worldwide UHNWI population, truly demonstrate the potential of the Large Jet category, which remains poised for long-term growth.

On behalf of the team at Jetcraft, I am honored we have had the opportunity to produce another annual forecast this year to support the future of our industry. In this climate, it is increasingly important for us to come together to share helpful insights and information.

As always, we welcome your comments, questions and feedback.

To download the complete 2020 5-Year Pre-Owned Business Aviation Market Forecast, visit https://www.jetcraft.com/knowledge/market-forecast/.

When mobile phones and the internet were first introduced, they were privileged items to have in your home. According to a census taken in the US, only 51% of households had a computer in the year 2000. Today, it’s hard to imagine a world without one. How else could we talk to family members who live in other countries, complete business deals in different time zones, or facilitate cross-border transactions?

The importance of technology to our operations has become clear during the COVID-19 pandemic. With many countries under strict lockdowns, tools such as Microsoft Teams, WhatsApp, Skype and WeChat enable us to stay connected to our customers and employees. These platforms shorten distances, bringing us together so Jetcraft can remain open and ready to transact.

The pandemic will change how we do business in the long run. Already, the digital natives of Generation Z have started entering the market as private jet users through charter, empty legs and jet cards. It won’t be long before they’re looking to purchase their own aircraft. The way we’re using instant messaging during COVID-19 – for rapid communication with clients, speeding up transactions – will be the norm for these buyers. We must be ready to adapt our working practices to suit this new generation.

Lockdowns also mean remote business jet viewing might be a buyer’s only option. Developments in VR technology could bring full-scale walkthroughs – or the chance to ‘touch’ an aircraft through tactile VR gloves – to buyers’ living rooms in the future. Today, while travel restrictions are in place buyers can still remotely view multiple aircraft, through high-quality photos, videos and on-the-ground virtual viewings.

Beyond business aviation, adjacent technologies such as eVTOLs and supersonic jets should take off in the next five years, assuming they’re accepted by regulators and consumers. eVTOLs will be a major disruptor, as they’ll change a lot of people’s lives, shortening commutes and enabling ultra-fast deliveries. But these technologies remain ‘adjacent’ to business aviation. We don’t expect many owners to upgrade their long-range jets to supersonic, but they may charter one for especially time-sensitive travel.

The power of technology to build connections is second only to that of travel. This pandemic has shown us how digital platforms can help us reach our business goals faster, but also how much we value creating relationships face to face. With a global network behind us, we are ready for whatever the next decade of business jet transactions brings.

Growth by manufacturers is needed by the pre-owned market as buyers continue to trade up to newer models, so the 2019 results are extremely encouraging – particularly for long-range aircraft manufacturers such as Gulfstream, Bombardier and Dassault. As owners upgrade, they release relatively young pre-owned jets onto the market, creating value alternatives for buyers who can or will consider pre-owned options.

It is expected that pre-owned inventory will begin a nominal increase in late 2020 as more new models are introduced and Jetcraft anticipates a good velocity of deals throughout 2020 given the USA tax law that exists for those who can benefit from bonus depreciation on new or used aircraft.

In terms of regional growth, over the past five years the industry has been talking a lot about Asia rivalling Europe for market size. Global events, such as the USA/China trade war and coronavirus, have slowed this market’s progression, so the Americas will continue to be the most dominant for business aviation, followed by Europe.

When buyers have options to upgrade to the next model, this moves young, high-quality aircraft into the pre-owned market. However, despite the surge in manufacturer announcements of late, sought-after young pre-owned jets remain in limited supply, compared to the high demand for them.

Having a minimal amount of these young aircraft for sale underpins demand for new models. If buyers miss out on the acquisition of a pre-owned Global 6000, or Gulfstream G550, they may not want to move away from that model; choosing instead to purchase a new version.

We can therefore see how the new and pre-owned markets share a valuable interrelationship, with rising activity in one spurring interest in the other.

As explained in our 2019 5-Year New & Pre-owned Market Forecast, sales of both new and pre-owned aircraft are predicted to reach $29.9bn per annum by FY2023. Although we expect to see four times more pre-owned transactions than new, we anticipate a 12.1% total growth of the business aviation fleet over the period, driven by new model sales.

Increasing attention in pre-owned aircraft is not only due to interest in younger jets. Previous buyers of new aircraft are now more willing to consider older models, due to better MRO capabilities and more accessible, rapid and cost-effective refurbishment options. As a result, we’re also seeing higher demand for out-of-production aircraft.

Purchasing a pre-owned aircraft can increase mission capabilities for a buyer. For example, our forecast demonstrates how a pre-owned midsize aircraft could be acquired for the same price or less than a new light jet; combined with ownership costs, the overall investment compares equally across a five-year period.

Despite our present period of global uncertainty, it is clear from last week’s NBAA show that the value of business aviation endures. We look forward to seeing what the next year brings ahead of the 2020 convention in Orlando.