Global Jet Capital: Private jet market ‘will be tested’ this year
The business aviation market will be tested this year as the possibility of recession could threaten the industry’s user base, according to Global Jet Capital.
The financing specialist said in its fourth quarter (Q4) Market Brief that a possible recession in 2023 could still challenge the market, despite its “unique value proposition”.
“While many economists forecast the global economy to experience a recession in 2023, Q4 2022 data indicates that the contraction may be less severe than originally expected,” predicts the report.
Flight operations dipped slightly in Q4 2022, from 945,218 in Q3 to 905,513 in Q4, but remained 19% above pre-Covid levels, which the report said shows “the broadening of the business aviation user base has endured”.
Pre-owned transaction levels were down in Q4 year-on-year (YoY) from 3,243 to 2,709 units, but their value increased YoY from $16.7bn in Q4 2021 to $19.1bn in Q4 2022. Both the amount of pre-owned aircraft delivered and their value were up from Q4 2020, which saw 2,536 units delivered worth $11.8bn.
“The pace of transactions in 2021 was not sustainable, given the substantial decline in pre-owned inventory and continued supply chain disruptions affecting new aircraft production,” the report said. “The strength of the market in 2022 compared to previous years, however, demonstrated the continued demand for business jets among fleet operators and individual users.”
New aircraft deliveries remained relatively steady since last year, dipping slightly from 721 units at a value of $15.6bn in Q4 2021 to 655 units worth $15bn in Q4 2022.
OEM backlogs across Bombardier, Gulfstream and Cessna increased from $32.2bn in Q4 2021 to $40.3bn in Q4 last year, almost doubling Q4 2020’s backlog of £24bn. The book-to-bill ratio remained above 1-to-1 in the quarter.
Total aircraft listings during 2022 were 23.7% higher (2,279) than in 2021 (1,843). Industry observers said that some aircraft owners may have been motivated to sell their aircraft to take advantage of the pricing environment, according to the report.
In addition, many aircraft sales in 2021 involved unlisted aircraft, while sellers last year returned to public listings. Global Jet Capital said listings may increase this year when new deliveries begin to pick up, with owners marketing their current aircraft after taking delivery of a new one. Around 5% of the business jet fleet was available for sale in Q4, up from 2% in the first quarter of the year.
The report concluded: “Looking toward 2023, the overall macroeconomic environment remains the biggest concern, with many economists expecting a recession. While the business jet market has seen a substantial expansion of its user base and has been resilient to economic volatility, this resilience may be tested in 2023.”
Earlier this month, Global Jet Capital announced that it reached a business jet financing milestone of $3.5bn.
Global Jet Capital Q4 Market Brief – at a glance
% change YoY
Pre-owned transactions (units)
Pre-owned transactions (value)
New aircraft transactions (units)
New aircraft transactions (value)