Pre-owned business aircraft values dive 15% due to Covid-19
The average and median values of pre‐owned business aircraft have fallen between 10% and 15% so far during the Covid‐19 crisis, with some individual make model seeing decreases of more than 20%, according to AMSTAT and VANGAS Aviation Services. Values in all segments have fallen since early April, but there is some indication that these delinks are beginning to slow in some market areas.
Andrew Young, AMSTAT general l manager said: “It remains to be seen whether the trends of the last few months will continue long‐term. However, whether the result of a Covid-19-driven reduction in travel or the logistical issues surrounding getting deals done under quarantine, or both, there was a year‐over‐year reduction in resale transactions in March and April this year. Further, the analytics clearly show a reduction in estimated aircraft values.”
The continuation of an existing trend can also be seen within aircraft inventories. The inventory of business jets was up 1.6% between January and March and then up 4.2% since mid‐March. The
inventory of business turboprops was largely unchanged between January and March and up 2.8% from March to May. However, AMSTAT said inventory levels remain below 2016 levels and significantly below those of 2009.
Furthermore, the report indicates that resale retail transactions for business jets were ahead of 2019 levels in January and February but, as the world entered lockdown, fell 23% in March year-on-year (YoY) and 40% in April YoY. Resale retail transactions for turboprops were at or ahead of 2019 levels in January and February but were down 27% in March and down 40% in April compared with the previous year.
Young continued: “What is also interesting is that inventories, while up, are not indicating a panic to sell and levels remain below recent highs seen in 2017. If inventory levels remain relatively low and interest in business aviation materialises as an alternative to commercial travel in parallel
with an economic recovery, then we might expect to see a significant uptick in transaction activity leading to a recovery in aircraft values in the coming months.”
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