Used Aircraft Sales, Flight Ops Improving

December 10, 2009

Key industry indicators such as used aircraft sales and flight operations are continuing to show positive signs, but the ongoing sluggishness in the market reaffirms the conclusion of many industry leaders that a "long road to recovery" is still ahead, analysts say. Used aircraft transactions, one of the most closely watched indicators, continued to pick up, while inventories declined in the past several months. Flight operations, another important indicator, also are up in recent months, analysts reported.

Industry statistics collected by AMSTAT and provided by the National Aircraft Resale Association show that the number of retail sales of used business jets and turboprops increased in the three-month period ending in September. Jet transactions rose 27.5 percent, from 334 to 426 units. During the third quarter, the inventory of jets for sale declined 2.3 percent, from 3,170 aircraft on the market to 3,096. The turnover time for jets dropped from 28 to 22 months. Turboprop retail transactions were up 17.5 percent, increasing from 246 in the second quarter to 289 in the third quarter. The number of turboprops for sale dipped 3.7 percent, with the inventory declining from 1,545 to 1,488 units during the period. The inventory turnover rate for turboprops dropped from 19 to 15 months. The number of used jets for sale peaked midyear, and the number of jets sold has now increased in two consecutive quarters, while the jet inventory turnover rate has declined for two straight three-month periods. Similar trends have been seen in the used turboprop market.

In more recent months, the decline of used jet inventory is moderating, analyst JP Morgan reported in its Business Jet Monthly update. The inventory - the number of jets for sale in proportion to the active fleet - decreased 10 basis points (bps) to 13.2 percent in November. This compares with declines of 30-50 bps in the three preceding months, JP Morgan noted. Inventories and inventory turnover rates remain near five-year highs, and industry experts concede it will take a long time to sell off the large number of previously owned business airplanes still on the market.

READ MORE:    Aviationweek.com 

Photo credit: Jet Republic