Recent model pre-owned private business jets deliver much of the same efficiency, capability, and luxury as any new private jet, at a mere fraction of new aircraft prices.
(PRWEB) November 16, 2016
Following years of gradual growth in sales of new business jets, a recent industry forecast predicts a slight decrease in sales of new private jets over the next 10 years. While this isn’t the best news for aircraft manufacturers, fewer new private aircraft deliveries could reverse years of decreasing prices for pre-owned business aircraft, making now the ideal time to buy a pre-owned private jet.
According to the 25th annual Global Business Aviation Outlook released by Honeywell Aerospace earlier this month, ongoing political and economic concerns worldwide will drive deliveries of new private aircraft down through 2026.
"We continue to see relatively slow economic growth projections in many mature business jet markets," said Brian Sill, president for commercial aviation at Honeywell Aerospace. "While developed economies are generally faring better, commodities demand, foreign exchange and political uncertainties remain as concerns."
Honeywell foresees approximately 8,600 business aircraft delivered through 2026, a decrease of some 600 aircraft - or seven percent - over its 2015 predictions, at values totaling approximately $255 billion. Between 650-675 new private jets will be delivered through the end of this year, a single-percentage drop over 2015 levels, with another slight decline expected through next year.
While these totals remain far healthier than delivery rates in the immediate aftermath of the 2008-2009 global economic downturn, even a slight decrease in new aircraft delivery rates could send ripples through the pre-owned market.
Currently, approximately 10 percent of the worldwide fleet of private aircraft is for sale. That serves to keep prices down; however, the projected decrease in new private jet deliveries could bring an uptick in transaction prices on pre-owned aircraft, particularly over the next 2-3 years.
"Although prices remain at near-record lows for many pre-owned aircraft, we expect those prices will stabilize, and perhaps even increase, as fewer new aircraft are introduced into the market over the next several years," said Dan Jennings, The Private Jet Company CEO.
Jennings added that many desirable aircraft, including jets less than five-years old, are currently available for immediate purchase at attractive prices. "That makes now the ideal time to consider purchasing a pre-owned private business jet, as these newer aircraft deliver much of the same efficiency, capability, and luxury as the very latest private jets, at a mere fraction of new aircraft prices," he noted.
Large cabin, intercontinental private jets, such as the Gulfstream G650ER and upcoming Bombardier Global Express 7000, will represent 57 percent of anticipated purchases worldwide through 2026, with continued decreases in deliveries of smaller jet models. Approximately 27 percent of the current private jet fleet will be replaced over the same period.
The North American market will continue driving new aircraft deliveries, representing 65 percent of expected sales per Honeywell's estimates. This demand will offset continuing sluggishness among the BRIC (Brazil, Russia, India, China) countries, with Brazil representing the best prospects for near-term growth. Somewhat surprisingly, new jet purchase plans in Europe have improved slightly, despite ongoing economic concerns and depreciated currencies following the “Brexit” vote.
Although overall flight activity hasn’t increased markedly over the past year, operators surveyed by Honeywell said they plan to increase aircraft usage “modestly” through 2017. Sill noted that even a slight increase would provide “some welcome momentum to aftermarket activity, which has been flat recently."
Issued in conjunction with the National Business Aviation Association (NBAA) annual convention, the Honeywell Global Business Aviation Outlook is based on interviews with 1,500 non-fractional business jet operators worldwide, as well as OEM production rates and development plans, macroeconomic analyses, and assessments by aerospace industry experts. Click Business Aviation Forecast for the full report.