Everyone is talking about the pre-owned market being stronger at the start of 2018 than it was last year. However, I’m going to venture a guess that most of us have heard this story a good number of times year after year. In fact, the number of green shoots stories that were published throughout the period of the Global Financial Crisis really did wear thin with most of us in the sector. What actually happened was that we all started to ignore the spin and looked at such media with some considerable cynicism.
So, what’s different this year?
The start of 2018 was a real whirlwind with a significant increase in deals, reducing inventory, and just about every broker attending Corporate Jet Investor London at the end of January was talking of a real market shift. At long last we were starting to see that buyers had choices. So did sellers. There was even bullish talk of it being a buyer’s market. In reality, then, as it is now, there are sectors of the market that are performing extremely well while a few are still lagging behind.
According to AMSTAT, sales in January increased by more than 12% followed by sales reductions in February and March, bringing the end of the first quarter of 2018 to a disappointing 5% reduction in retail transactions. However, there’s a buzz in the market more so than we have seen in recent years.
A few sectors really have come alive and whilst overall inventory for sale is now around 9.5%, there are many aircraft where the percentage is just 2% or 3%. Unfortunately, the overall market is hugely skewed by far too many older aircraft remaining for sale for far too long. The reality is that many will never sell and serve no real purpose other than to unfairly inflate the for-sale statistics.
Looking at this in greater detail according to the latest AMSTAT data, 27% of the aircraft for sale are more than 30 years old. This statistic rises to 46% when considering those over 20 years. Just 21% are 10 years old or less. If we remove the aircraft that are probably never going to sell, the market statistics look a lot better. For now we are stuck with the skewed history. Even so, there’s a clear trend of reducing inventory over recent years and more importantly over recent months, as well as plateauing values so there are real signs of improvements.
At Duncan Aviation we have had a promising start to the year and have seen a good number of sales and acquisitions complete during the first quarter. As a result of this, we are busy looking for new opportunities to sell aircraft. If you feel that Duncan Aviation can assist you in the sale or purchase of an aircraft for you, please don’t hesitate to get in touch.
If you are going to EBACE, please stop by our booth – #E89 – to find out more.
Oh, and the hot sectors I mentioned earlier? I’m afraid you’ll have to speak to us to find that out!