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Wed, Apr 19, 2023

Pre-Owned Business Aircraft Market Rebalancing

So States the International Aircraft Dealers Association

The International Aircraft Dealers Association (IADA) is a professional trade association founded more than thirty-years ago for purpose of promoting the growth and public understanding of the aircraft resale industry.

The organization’s dealers account for 48-percent of global pre-owned business aircraft sales—collectively buying and selling more aircraft by dollar-volume than the remainder of the world’s pre-owned aircraft dealers combined. Annually, IADA dealers officiate over 1,100 aircraft transactions totaling some $10-billion.

IADA set forth in its First Quarter 2023 Market Report that a global survey of its members occasioned a more optimistic six-month outlook for the pre-owned business aircraft marketplace than was anticipated in the fourth-quarter of 2022.

The expressed expectations are supported by the sales results of IADA’s accredited dealers, which collectively buy and sell more aircraft by dollar-volume than the remainder of the world’s pre-owned aircraft dealers combined. In the first quarter of 2023, IADA dealers closed 239 transactions—49 fewer than the 288 aircraft deals they closed in 2022’s first quarter and 26 more than they moved in the first quarter of 2021.

IADA dealers ended 2023’s first quarter with 197 aircraft under contract, 62 fewer than the 259 jets under contract in 2022’s first quarter and 51 fewer than the 248 planes under contract during the first quarter of 2021.

Results from IADA’s first quarter 2023 survey suggest the dynamics of the pre-owned business aircraft market are conforming to expectations—to include replenishment of aircraft inventory and a return to more rational pricing and valuations against a backdrop of continuing customer interest and inquiries.

Notwithstanding prevailing macroeconomic forces, geopolitical tensions, and banking crises, customers appear to be little-swayed from interest in buying, selling, and operating business aircraft. Even in the faces of 2022-2023 year-over-year back-slides in aircraft sales, flight activity, and MRO shop demand, the market for business aviation products in 2023 remains vibrant.

Ms. Zipporah Marmor, IADA chair and vice-president of transactions for Architect-Engineer Contract Administration Support System (ACASS) Montreal, stated: “There is evidence that demand and supply forces are rebalancing, with less frenetic activity, more realistic pricing, and a slow but steady buildup of available inventory. Although specific low-time aircraft with attractive pedigrees continue to attract top-dollar, the overall market has begun to downshift from a peak characterized by accelerating prices and strong residual values.


IADA executive director Wayne Starling remarked: “Although pre-owned inventory levels have begun to slowly replenish, most OEMs have grown their order backlogs to represent more than two years of production and they are straining to accelerate deliveries in the face of slowly recovering supply chains. Our organization foresees a continuation of relatively tight market conditions through 2023, driven by customers who cannot or will not wait two or more years to receive their next aircraft.”

In 2020, following the onset of global COVID madness, IADA commenced tracking monthly sales of pre-owned business aircraft. Subject reports are informed by two key factors: IADA members’ market perspective as gleaned by monthly surveys, and actual sales data supplied by IADA accredited dealers via monthly transaction and activity reports. Comments from IADA members add context to the report. For example:

“Pre-owned buyers are expecting significant price reductions but inventory remains low especially on late model aircraft.” – Robert Sammartino, IADA accredited dealer Skytech, Inc., Westminster, Maryland.

“Surprised by how many acquisitions we have already confirmed for early in 2023. Feel that the early part of 2023 will be a bit slower, but the latter part of 2023 is looking even more active.” – Chad Anderson, IADA accredited dealer Jetcraft, London, England.

“I don’t expect any large swings in inventory, or demand; I believe that the used market will, however, remain strong all throughout this year.” – Jeremy Cox, verified products and services member JetValues Jeremy, Waterloo, Illinois.

“Still low inventory and a seller’s market. Buyers being more cautious but still active.” – Todd Spangler, IADA accredited dealer Jetcraft, London.

“Feeding frenzy is over. The market has slowed to a balanced pace, yet with lots of inquiries and activity. Inventory is limited, but not like last year.” – Bryon Mobley, IADA accredited dealer Wetzel Aviation, Inc., Englewood, Colorado.

“Certainly, a little calmer compared to third and fourth quarters 2022, but we are very steady and keeping busy. Normal busy.” – Daniel Cheung, verified products and services member Aviation Tax Consultants, Scottsdale, Arizona.

“A slight pause in January and February, but activity has come back in the last couple of weeks.” – Joseph Carfagna, IADA accredited dealer Leading Edge Aviation Solutions, LLC, Parsippany, New Jersey.

“We are seeing increased balance between buyers and sellers in today’s marketplace. This is driven by increased inventory, more realistic pricing, and a return to standard transaction dynamics (including pre-buys).” – Emily Deaton, IADA accredited dealer jetAVIVA, New Century, Kansas.

“Sellers are still trying to maintain a sellers’ market by keeping prices high. However, buyers are refusing to pay these prices. Currently the aircraft sale market is off to a very slow start for the year.” – John Swartz, IADA accredited dealer Swartz Aviation Group, LLC, Fort Worth, Texas.

“If it weren’t for supply chain issues limiting OEM production capacity, we’d be looking at best ever.’” – Ronald Smith, IADA accredited dealer Western Aircraft, Inc., Boise, Idaho.

“The pack has separated. Every market’s for itself. Some are firm, others are soft. Some prices are way down, others remain unchanged.” – Mike Swartz, IADA accredited dealer Swartz Aviation Group, LLC, Fort Worth, Texas.

“What we are seeing right now is a lot of wait and see. Sellers have not caught up yet with the reality of the market, whereas buyers feel that values will still decline.” – Zipporah Marmor, IADA accredited dealer ACASS, Montreal.

“Some buyers are on hold due to macro-economic uncertainties and they believe that prices will continue to soften in 2023. Barring a major recession or major equity market correction, I expect prices to continue to trend down.” – Frank Janik, IADA accredited dealer Leading Edge Aviation Solutions, Parsippany, New Jersey.



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