The Impact of Historic Low Levels of Supply – July 2021

The Impact of Historic Low Levels of Supply – July 2021

Pre-owned private jet inventory decreased 38% since June 2020. This decline of supply on the market has had a residual and meaningful impact on the marketplace this year.

Only around 4.65% of the pre-owned jet fleet is for sale – the lowest level since records began in the 1980s. In total, around 1134 private jets are for sale globally, compared to approximately 1839 in June 2020, a decline of over 38%.

This low inventory, plus a drop in the number of new private jets being delivered – down 20% last year from 2019 (the lowest number since 2004), means that despite a difficult market for commercial aviation and travel in general, the private jet sector has been experiencing high levels of demand.

“Buying private jets is extremely difficult right now, particularly for European compliant aircraft. Multiple buyers and a shrinking inventory of available aircraft have made a very competitive market. We recently tried to purchase a late model Challenger 650 for a client, and at least six offers were made for this aircraft, which ended up trading close to its headline asking price. To say that the market is competitive at the moment is an understatement,” said Oliver Stone, Managing Director at Colibri Aircraft.

He added, “This decline has been led by the USA, which re-opened far quicker than other parts of the world. Key factors driving the dramatic drop in the supply of private jets for sale was a strong desire to travel in an environment with far lower risk of Covid transmission – Globeair recently reported there are as many as 680 fewer person-to-person interactions when flying by private jet compared to commercial – and a significantly reduced airline service making airlines less convenient, which meant that more owners of private jets wanted to keep hold of their aircraft and a large number of first time buyers entered the market.

In addition to this, surging asset prices in stock markets and real estate, historically cheap debt due to government stimulus, and depreciation benefits that applied to private jet purchases removed many of the financial pressures some owners might have been under to sell their aircraft in more normal circumstances and also encouraged new buyers to act.

Finally, as inventory declined so rapidly we found that current owners are often holding onto their current aircraft as they struggle to find a suitable replacement in such a supply-constrained environment, further decreasing the aircraft that are coming available for sale.”

 

Percentage of Private Jet Fleet For Sale: Dec 1985 – June 2021

percentage of jets for sale

The recent sell off has taken inventory levels (when seen as a percentage of the fleet) to the lowest point on record.

Total Number of Private Jets For Sale: June 2004 – June 2021

Total Jets for sale

There have not been this few jets for sale since Jan 2001. Keep in mind, the OEM’s have produced 15,000+ jets in this time.

Total Number of Private Jets For Sale: January 2020 – June 2021

Total Jets for sale close up

A close up look at supply levels in the last 16 months shows the sharp decline in the number of jets for sale since the fourth quarter 2020.

*Data analysis based on Amstat