A Great Time to Buy a Biz jet
Will President Donald Trump’s policies encourage a surge in private jet sales?
On 1 January 2016, there were 21,342 business jets in the worldwide fleet, of which 11.1% were for sale.] 5-year old aircraft residual value level is at a 55% of the list price. About 70% of the fleet was in North America at the end of 2011. The European market is the next largest, with growing activity in the Middle East, Asia, and Central America. In 2015 the total airplane billing amounted to US$21.9 billion, and 718 new business jets were delivered to customers across the globe : 199 (27.7%) by Bombardier Aerospace, 166 (23.1%) by Cessna, 154 (21.4%) by Gulfstream Aerospace, 120 (16.7%) by Embraer and 55 (7.7%) by Dassault Falcon.
In 2016 Honeywell predicted 8,600 aircraft would be delivered during 2016–26 for a total value of $255 Billion. Its breakdown is 57% big (85% in value) — super-midsize to business liner, 21% midsize (10% in value) — light-medium to medium, and 22% small (5% in value).
For the decade starting in 2017, Aviation Week predicts 11,346 deliveries of business aircraft (jets or not) valued at $250.1 billion, with a fleet growing from 31,864 aircraft to 36,702 aircraft (64% in North America): 4,838 more at an average annual growth rate of 1.6%, with 5,835 retirements. For the coming five-year period, Textron Aviation should lead the market with a 22.8% market share, followed by Bombardier with 20.4%, Embraer with 16.6%, Gulfstream with 15%, Dassault with 8.4% then the rest of manufacturers with 16.9%.. The average utilization should be 365 flight hours per aircraft per year.
In 2016 we saw the continuing sharp drop in private jet prices, in particular in the large cabin space. However, over 2,200 biz jets (<1% compared to 2015) were sold worldwide in 2016, with an average of 308 days on the market.
The private jet market witnessed great success in 2007–2008 with 1317 new deliveries in 2008 compared to 718 in 2015.
With prices low and lots of jets to choose from 2017 is looking like an excellent time to buy. With, President Donald Trump promising to lower corporation tax and encouraging U.S. businesses to bring money back to the U.S. this should encourage higher capital spending by US companies and High Net-Worth Individuals. A strong US dollar will encourage higher imports of product and services, also increasing the effective cost of US-dollar priced assets like private jets to prospective international buyers.
Prices will still stay low first 6 months of the year but as sales start to increase I predict we will see prices of private jets to start to increase after that. You need to also factor in the need for businesses to do more trade internationally and a private jet is a great tool to help business grow. A 2010 study by the National Business Aviation Association found that small and midsize companies that use private jets produce a 219% higher earnings growth rate than those that strictly fly commercial.
Fabrizio Poli is Managing Partner of Aircraft Trading Company Tyrus Wings. He is also an accomplished Airline Transport Pilot having flown both private Jets and for the airlines. Fabrizio is also a bestselling author and inspirational speaker & has been featured on Russia Today (RT), Social Media Examiner, Bloomberg, Channel 5, Chicago Tribune, Daily Telegraph, City Wealth Magazine, Billionaire.com, Wealth X, Financial Times, El Financiero and many other Media offering insight on the aviation world. Fabrizio is also regularly featured as an Aviation Analyst on Russia Today (RT). Fabrizio is also aviation special correspondent for luxury magazine, Most Fabullous Magazine. Fabrizio is also considered one of the world’s top 30 experts in using Linkedin for business. You can tune in weekly to Fabrizio’s business Podcast Living Outside the Cube available both in video & audio. You can also follow Fabrizio’s aviation videos on Tyrus Wings TV.Fabrizio’s latest book “Health4Flyers” , the first natural-health book for pilots, flights attendants and frequent flyers is now available worldwide.
You can contact Fabrizio on:
fabrizio.poli@tyruswings.com
OR Mobile: +44 7722 350 017
