JETNET releases September 2012 and first nine months data

JETNET has released September 2012 and year-to-date (YTD) 2012 results for the pre-owned business jet, business turboprop, and helicopter markets.

JETNET has highlighted in Table A key worldwide trends across all pre-owned aircraft market sectors, comparing September 2012 to September 2011 as well as YTD. The Fleet For Sale percentages for all market sectors were down in the September comparisons, with the largest drop in business turboprops, to 8.5% from 10.0% in September 2011.

The company shows key metrics (September 2012 vs. September 2011 and YTD)

For Sale inventories continue to decline:
• Business jets for sale were at 13.5% (down 0.3 points from 13.8%)
• Business turboprops for sale were at 8.5% (down 1.5 points from 10.0%)
• Turbine helicopters for sale were at 6.2% (down 0.4 points from 6.6%)
• Piston helicopters for sale were at 6.0% (down 0.4 points from 6.4%)

Full Sale Transactions had mixed results, with only business jets showing growth:
• Business jets were up 5.5%
• Business turboprops were down 3.7%
• Both turbine (-8.2%) and piston (-9.0%) helicopters were down

Average Asking Prices show mixed results:
• Both business jets (+4.9%) and turbine helicopters (+12.4%) increased
• Both business turboprops (-4.7%) and piston helicopters (-0.4%) decreased

Average Days on Market are all at very high levels:
• All market sectors were on the market more than a year (on average) before a sale, except business turboprops (at 345 days)
• All market sectors have shown increases in Average Days on Market in September, except business jets which took 3 fewer days to sell
• Piston helicopters took two months (63 days) longer to sell than a year ago
While the pre-owned market continues to show improvement, all market metrics have been slow to recover, though are much improved compared to the lows recorded over the past three years.

However, after 9 months the business jet market is showing a 5.5% increase in full sale transactions compared to the same period in 2011. Typically, the fourth quarter shows stronger results compared to the first three quarters of any given year, so an improvement is expected on the 5.5% increase.

The US is just a few weeks away from the presidential election, which may or may not have an effect on the final year-end results. The recent news that Hawker Beechcraft intends to emerge from Chapter 11 protection, as a standalone company renamed Beechcraft Corporation, will be much talked about at next week’s 65th NBAA Annual Meeting and Convention in Orlando, Florida as well.

Business jets showed a positive start in 2012, with a 7.7% increase in pre-owned sales transactions, and by selling in less time than last year with a 3% increase in average asking price. However, other market sectors are not showing similar results. Other pre-owned aircraft are showing decreases in sales transactions, are taking longer to sell on average, and are at much greater average asking prices compared to the same period in 2011.

Chart A depicts pre-owned business jet sale transactions based on a 12-month moving total, and average asking price based on a 12-month moving average from 2004 to present.

September 2012 retail sale transactions have continued to flatten out and stay just below the 2,200 mark since mid-year 2011, 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. After a brief recovery in Q2 2011, Average Asking Price continued a sharp decline, a big concern to sellers, but over the past several months has started to climb again after little change for most of 2012. It’s still a buyer’s market, with ample inventory of most business jets at near-low average asking prices.

According to JETNET there us some food news, real gross domestic product—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 2.0% in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. For comparison, in the second quarter real GDP increased only 1.3%.