JETNET releases March 2013 and first quarter 2013 data


JETNET has released March 2013 and first quarter 2013 results for the pre-owned business jet, business turboprop, helicopter and commercial airliner markets.

JETNET has released March 2013 and first quarter 2013 results for the pre-owned business jet, business turboprop, helicopter and commercial airliner markets.

Highlighted in Table A are key worldwide trends across all aircraft market segments comparing March 2013 to March 2012. Fleet For Sale percentages for business jet and business turboprop market sectors were down in the March comparisons, but increased slightly in the helicopter markets.

Business jets are showing a slow start in the first quarter of 2013, with a 4.2% decrease in pre-owned sale transactions, and are taking more time to sell (71 days longer) than last year, with a 3.3% decrease in average asking price. Business turboprops decreased 8.8% in pre-owned sale transactions, with a double-digit increase in average asking price of 18.7%.

Both turbine and piston helicopters saw double-digit declines in sale transactions YTD, at 34.8% and 21.5% respectively. Turbine helicopters recorded a double-digit decrease in average asking price at 38.4% in the YTD comparisons through March 2013.

Commercial airliners are reported here for the first time by JETNET in Table A – Worldwide Trends, and include For Sale numbers for both commercial jets (includes airliners converted to VIP) and commercial turboprop aircraft. The number of pre-owned commercial airliner sale transactions, 469 for the first quarter of 2013, showed a double-digit increase of 21.2% compared to the first quarter of 2012. However, commercial turboprop sale transactions declined by 25% in the same first quarter comparisons. Also, the average days on the market increased by more than 114 days for commercial airliners, and 7 days for commercial turboprop aircraft in the same quarterly comparisons. Both were on the market for more than a year before selling.

JETNET Worldwide Trends 03mo13 

For Sale Inventory Levels by Weight Class

Business jets for sale by weight class are shown in Chart A, from the first quarter 2007 to first quarter 2013. The light weight class dominates business jets for sale at 40%, or more than 1,000 out of the nearly 2,500. The light weight class has decreased in total percentage for sale, from 49% to 40% today. The most significant change in the for-sale percentage is in the heavy weight class. In the first  quarter of 2007 the heavy weight class represented 19% or 313 aircraft for sale and today accounts for 28% or 693 business jets for sale, more than doubled over this time period. Of most concern is that the total number of business jets for sale remains unchanged and very high today at almost 2,500 compared to 1,662 in the first quarter 2007, resulting in a buyer’s market.

JETNET PreOwned BusJet 03mo13
Full Retail Sale Transactions and Average Asking Prices

March 2013 retail sale transactions have continued to increase. They are now above the 2,200-transactions mark since mid-year 2012, based on a 12-month moving average trend line, after showing a sharp rebound from the low point in mid-year 2009. In January 2011 the 12-month moving trend lines met for the first time since June 2008. Since a brief recovery in the third quarter of 2011, the average asking price has continued to decline, a big concern to sellers, but has not dipped below the average of $4.50 million. In fact, the average asking price on a 12-month moving average over the past 18 months remains in the $4.50M to $4.75M price range. It’s still a buyer’s market, with ample inventory of most business jets at near low average asking prices, as shown in Chart B.

JETNET PreOwned BusJet Retail 03mo13
Turbine Helicopter Full Retail Sale Transactions

In the first quarter 2013 comparison to first quarter 2012, turbine helicopter full retail sale transactions fell from 351 to 229, or 34.8%. This is the lowest number of quarterly transactions in this seven-year comparison.

JETNET TurHelis QOQ 02mo13
Good News

Real gross domestic product (GDP)—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 2.5% in the first quarter of 2013 (that is, from the fourth quarter to the first quarter, as shown in Chart D), according to the “advance” estimate released by the Bureau of Economic Analysis (BEA).

JETNET US GD cont 03mo13
The BEA report is welcome news and shows that the U.S. GDP is heading toward the 3.0% growth mark (when business aviation does well). The advance estimate of the U.S. GDP release showed the economy grew for the fifteenth straight quarter.

In the fourth quarter of 2012, real GDP increased 0.4%, as reflected in Table B.

JETNET US GDP 09 to 13 03mo13
Financed vs. Cash

There can be no doubt that the reduction in available financing for used aircraft purchases has had an adverse impact on the business and helicopter aviation re-sale markets. As 2013 unfolds there remains a large inventory of business aircraft available at very affordable prices. The percentage of financed versus cash retail transactions for business jet aircraft was roughly split 50/50 from 2000 through September 2008. But then in late 2008 came the start of the economic meltdown, at which point securing debt financing for pre-owned business aircraft purchases became increasingly difficult. Thus the pendulum swung in favor of cash as the method of most pre-owned jet transactions. Today the ratio of financed versus cash transactions for used business jets stands at 23/77. This is based on a four-quarter total moving average trend, as reported by JETNET from U.S. FAA-filed financial documents.

There has been little change in the percentage of financed business jets over the past four years, as shown in Chart E.

JETNET BusJet Full Retail Sales Fin Cash 03mo13