flyExclusive buys new from Textron
One of the ways that Jim Seagrave has grown flyExclusive into one of the US’s biggest charter operators is by being very good at buying pre-owned aircraft. The company has added more than 80 pre-owned, mainly Cessna, aircraft in the past seven years and refurbished them at a sister company. (It also added seven Gulfstream GIVs when it acquired Sky Night in March 2020). The Kinston, North Carolina company says it is now the third largest Part 135 charter operator in the US.
Last week Seagrave changed strategy and ordered up to 30 new Cessna Citation CJ3+ aircraft from Textron. His order shows how hard it is to find any pre-owned aircraft. AMSTAT data shows there are just four pre-owned CJ3+ aircraft for sale out of a fleet of 191. Just 3.49% of the total business jet fleet is on the market.
In 2021 Seagrave, chairman and founder of flyExclusive, told CJI how they were still adding pre-owned aircraft. “It is simple. We are paying too much for them,” he joked. “The pre-owned aircraft market is on fire – with very few to none available – but so is charter.”
FlyExclusive will get five new CJ3+ aircraft from Textron this year. It no doubt wanted more but this is still a significant amount. Textron only delivered 167 jets in 2021 (up from 132 in 2020). It has not said exactly how many it is aiming for in 2022, but in January Scott Donnelly, CEO, Textron said it did not “want to do something stupid and try to go radically accelerate production rates and then burn down backlog”. It had a $4.1bn backlog at year end.
In the past, large fractionals and fleet operators were a source of pre-owned aircraft. Now they are holding onto them and buying more. With charter demand strong, flyExclusive is not looking to use the new aircraft to replace older ones in its fleet. Instead, it is looking to use them to launch a fractional programme. It needs every aircraft it can find.
The same is true with NetJets, which is set to add almost 80 new aircraft in 2022. A significant number of these are from Textron. NetJets added 55 new aircraft in 2021, accounting for 8% of all business jet deliveries by unit (and a lot more by dollar value). Few business aviation acquisitions will get close to this amount. NetJets is also benefitting from signing its order for up to 325 Textron aircraft in 2018. Few predicted this level of demand four years ago.
Vista Global added 30 new and pre-owned aircraft in 2021. Jet Edge, Vista’s recent acquisition, added even more. FlexJet has also kept growing and is using older aircraft for its FXAIR charter business.
A lot of people have been hoping that owners taking new aircraft in 2022 will release their pre-owned aircraft. This will happen. But about one in five jets are going to fleet operators. They are holding on to aircraft and looking to buy others. Until the charter market slows down, it is hard to see the number of pre-owned aircraft for sale increasing.
Of course, if there is a sudden slump in demand for charter, things could change very quickly.
Above: Last week Jim Seagrave, chairman and founder of flyExclusive, changed strategy and ordered up to 30 new Cessna Citation CJ3+ aircraft from Textron.