IADA: Pre-owned aircraft market ‘to stay red hot for first half’

Mike Stones

The global pre-owned aircraft market will “stay red hot” for the first half of this year, while inventories remain low, according to the International Aircraft Dealer Association (IADA).

The first six months of 2022 will continue to bring increases in demand for all sectors of the used aircraft sales market including: turboprops, light, medium and large categories, predicts the IADA Fourth Quarter 2021 Market Report. Over the same period inventory deficiencies are expected to drive higher prices, based on the survey sent to nearly 900 IADA members. The association’s membership includes dealers, brokers and members who provide products and services related to aircraft transactions.

Paul Kirby, IADA chairman emeritus said values have increased an average of 10% a month for the past three months. “The rate of change feels unsustainable. However, absent an increase in supply or a dramatic drop in demand, appreciation will likely continue into 2022.”

The predictions follow what IADA describes as “an incredibly unprecedented year”. The association reported its members roughly doubling average aircraft transactions. Private airplane dealers accredited by IADA closed 20% more deals last year than the year before. Last year’s total reached 1,372 aircraft transactions, compared with 1,135 deals in 2020. “This was despite a shrivelled aircraft inventory, with many airplanes never making it to market before being snatched up by buyers willing to pay top dollar,” said the association.

Wayne Starling, IADA’s executive director, wrote in the report’s Executive Summary: “In the aviation field, there is red hot global demand married to lack of inventory; it’s a seller’s market. And our members believe that the market is likely to remain that way for the next six months.”

IADA accredited dealers buy and sell more aircraft by dollar volume than the rest of the world’s dealers combined and bring informed insight to market trends, he added.

Jeremy Cox of JetValues Jeremy said: “In my aircraft appraisals business, for below $10m fair market value aircraft, I am adding 20% to account for the lack of supply, and extreme demand.” Above $20m he reports adding 10%, with all points in-between pro-rated. “The used aircraft marketplace, since Q3 2020, has developed into a bull market, with minimal days on market and in most cases, premium pricing above asking price is occurring.”

Todd Spangler, sales director of  Jetcraft, covering Florida and Central and South America, summed up the feelings of many preowned brokers: “Buying activity is excellent. Inventory levels are serious concern. The OEMs need to begin delivering new aircraft at higher volume in order to displace more aircraft into the marketplace.”

Kyle Wagman, Leading Edge Aviation, services director of Aircraft Transactions and Consulting added: “I think we all have eager and ready buyers ready to strike with offers but with limited supply of preowned aircraft, values have gone to crazy numbers. Who would have thought that an aircraft purchased new from an OEM less than three years ago can be sold in today’s market at a premium compared to what the owner paid for it?”

 

IADA Fourth Quarter 2021 Market Report – at a glance

*Global pre-owned aircraft market to stay hot in first half

*Inventories to remain low

*Strong demand across all categories: turboprops, light, medium and large aircraft

*Low inventories expected to drive higher prices

*IADA dealers closed 20% more deals last year than in 2020

*1,372 aircraft transactions closed in 2021, compared with 1,135 deals in 2020.

 

 

Source: IADA.

 

 

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