JETNET releases November 2011 data


JETNET says the market is still slowly recovering

JETNET has released November 2011 and the first eleven months of 2011 results for the pre-owned business jet, business turboprop, and helicopter markets.

Pre-owned business aircraft inventories continued to decline in November, but asking prices- especially for jets-have yet to find a bottom. Business jet inventory in November stood at 14.0% of the in-service fleet, down 1.1% from a year ago. In the first 11 months of 2011, jet sale transactions increased by 9.6% compared to the same period in 2010. However, in the same time frame average asking price dove 14.1% to $4.537 million, and average days on the market swelled by nine days to 334.

Meanwhile, the turboprop market appears to be gaining a better footing. Inventory  of pre-owned turboprops settled in at 9.9% in November, down from 10.8% in 2010. Turboprop sale transactions rose by 12.4% in the first 11 months compared with the same period in 2010, while the number of days on market decreased by 12 days to 327. Average Asking price was the only negative in the turboprop segment, though it fell by only 3.2% versus a year ago, to $1.311 million.

Turbine and Piston Helicopter Full Sale Transactions have declined by double-digit percentages, at 10.9% and 18% respectively, after eleven months of 2011 versus 2010. The percentage of the Turbine and Piston helicopter fleet for sale in November 2011 was below 7%.

One million dollars separates the average asking prices for Turbine helicopters, at $1.277 million, and Piston helicopters, at $223 thousand. While the average asking price for turbine helicopters is declining, the piston helicopter average asking price has increased by 8.3%. This was the only pre-owned aircraft market sector to show an increase in average asking price, as highlighted in Table A.

Real buyers today seem more discerning and knowledgeable than ever, and continue to control the market. Many are selecting the business aircraft and helicopters that are priced right, and the activity is directly proportional to the aircraft quality.

A review of U.S. FAA financial documents from 2000 to present shows that prior to the economic meltdown, debt financing versus cash transactions was roughly split 50/50. As illustrated in Chart A, the percentage of debt financing decreased to 21% through the 3rd quarter of 2011 (based on a fourquarter total moving average), as financing has become available primarily to the lowest credit risk buyers.
JETNET Chart A Nov2011