IADA: ‘Private jet supply and demand is rebalancing’
Supply and demand for private jets is rebalancing, according to the International Aircraft Dealers Association’s (IADA) First Quarter (Q1) Market Report.
IADA members closed 239 transactions in Q1, down from 288 in the same period of 2022. Members ended the quarter with 197 aircraft under contract, compared with 259 in Q1 2022, with 52 of these transactions reporting lowered prices while only six did last year.
The report said this is due to replenishment of inventory levels and a “return to more rational pricing and valuations” amid continuing levels of customer interest.
The majority of IADA members predicted that all aircraft types will see a slight decrease in pricing over the next six months, with 64% of respondents predicting a slight decrease in mid-size and large jet pricing. Just over half (52%) predicted this for turboprop prices, while 63% expected to see light jets experience a dip in price.
As for supply, the majority of respondents expect a slight increase in availability of all aircraft types, with 69% expecting a slight rise in light jets, 67% in mid-size jets, 62% in turboprops and 60% in large jets.
Zipporah Marmor, chair, IADA said: “There is evidence that demand and supply forces are rebalancing with less frenetic activity, more realistic pricing and a slow but steady buildup of available inventory.”
She added: “Although specific low-time aircraft with attractive pedigrees continue to attract top-dollar, the overall market has begun to downshift from a peak characterised by accelerating prices and strong residual values.”
Although the market is beginning to rebalance, Wayne Starling, executive director, IADA said OEMs are still under pressure due to a build up of backlog and slowly recovering supply chains. He said: “Our organisation foresees a continuation of relatively tight market conditions through 2023, driven by customers who cannot or will not wait two or more years to receive their next aircraft.”
In 2022, IADA members reported the strongest year ever for private jet sales in the history of the association, closing 1,399 deals compared with 1,370 in 2021, although more deals fell through in Q4 than any other quarter in the year.