Gulfstream’s launch of its long-range G700 twinjet was the lead story at last week’s NBAA business aviation convention in Las Vegas and led to a buoyant mood at the show. In our more than 55-year history, we’ve discovered new aircraft announcements are always good news for the pre-owned market.
When buyers have options to upgrade to the next model, this moves young, high-quality aircraft into the pre-owned market. However, despite the surge in manufacturer announcements of late, sought-after young pre-owned jets remain in limited supply, compared to the high demand for them.
Having a minimal amount of these young aircraft for sale underpins demand for new models. If buyers miss out on the acquisition of a pre-owned Global 6000, or Gulfstream G550, they may not want to move away from that model; choosing instead to purchase a new version.
We can therefore see how the new and pre-owned markets share a valuable interrelationship, with rising activity in one spurring interest in the other.
As explained in our 2019 5-Year New & Pre-owned Market Forecast, sales of both new and pre-owned aircraft are predicted to reach $29.9bn per annum by FY2023. Although we expect to see four times more pre-owned transactions than new, we anticipate a 12.1% total growth of the business aviation fleet over the period, driven by new model sales.
Increasing attention in pre-owned aircraft is not only due to interest in younger jets. Previous buyers of new aircraft are now more willing to consider older models, due to better MRO capabilities and more accessible, rapid and cost-effective refurbishment options. As a result, we’re also seeing higher demand for out-of-production aircraft.
Purchasing a pre-owned aircraft can increase mission capabilities for a buyer. For example, our forecast demonstrates how a pre-owned midsize aircraft could be acquired for the same price or less than a new light jet; combined with ownership costs, the overall investment compares equally across a five-year period.
Despite our present period of global uncertainty, it is clear from last week’s NBAA show that the value of business aviation endures. We look forward to seeing what the next year brings ahead of the 2020 convention in Orlando.
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