IADA: ‘Market on turning point where supply is outgrowing demand’

The number of pre-owned aircraft for sale in the second quarter (Q2) of this year has exceeded acquisitions in a turning point for the market, according to International Aircraft Dealers Association (IADA).

“It’s clearly a defining transition moment where there are more aircraft coming on the market than we’ve had retained clients to place them in,” said David Monacell, executive vice president, Corporate Fleet Services and chairman at IADA. “Historically, acquisitions have been more challenging to achieve, but when inventory was so tight, we found those to be as easy as anything to obtain.”

In its most recent market report, IADA found that aircraft retained to sell increased year-on-year, from 133 in 2021 to 146 this year. New acquisition agreements dropped from 177 in Q2 last year, to 134 in 2022.

The number of deals under contract also dropped year-on-year, from 330 to 231 and the number of closed deals fell slightly from 316 to 310. Contracts that ended up dropping in price doubled, from 11 last year to 22, while deals that fell apart remained stable at 44.

Phil Winters, vice president of Aircraft Sales and Charter, Western Aircraft and treasurer at IADA supplied more evidence of the market undergoing change. “We still have a tonne of demand, we still have folks who  are interested in transacting on planes,” said Winters. “But the fact that we can’t find them … so many of these airplanes aren’t even hitting the market. What we’re able to experience now is a little bit of a step back and softening of the market.”

Monacell said that while he had “some initial concerns” about acquisitions falling, the rest of the year-on-year data indicates that the market will continue supplying pre-owned aircraft remain strong. He pointed out that the total number of deals closed in the first half of this year (598) is still up compared with 2021 (529) and 2020 (298). However, he was cautious about the strong figures we’ve seen in Q1 this year and said they could be a “roll-over of activity” from the end of 2021 (see tables below).

Wayne Starling, executive director, IADA said: “While we expect to see a strong market for the balance of this year, our dealers and transaction specialists are experiencing a bit of softening in some of the leading indicators for our industry.”

He added that while closed deals in Q2 this year were healthy, a decrease in acquisition agreements and deals under contract “indicate the market is returning to normal levels from the frenzied pace of 2021”.

IADA began its quarterly sales metrics reports in April 2020, due to volatile market conditions caused by the pandemic. The report is informed by sales data supplied by IADA members and a survey of the members’ market perspective.

Dealer activity Q2 year-over-year

Total closed deals by quarter