After reaching historic lows in 2021, the percentage of available used business jets for sale is creeping back up, marking a 14 percent year-over-year jump in December and a 6 percent month-over-month climb, according to analyst Jefferies. Meanwhile, pricing is up 21 percent from a year ago.

In the past six months, the available inventory is up 31 percent, Jefferies added, citing Amstat data. Young jet inventory—those less than seven years since production—have increased 64 percent year-over-year and 12 percent from November.

Despite these increases, only 3.3 percent of the fleet is for sale, well below the five-year average of 5.9 percent, Jefferies further pointed out. In December, heavy jet inventory increased by 27 percent, while medium and light jets were up 13 percent and 9 percent, respectively, from a year ago.

Embraer aircraft for sale rose 26 percent from a year ago, to 24 units, but inventory is still at 2.1 percent. Phenoms lead this increase. The number of Cessna Citations, meanwhile, has jumped 62 percent year-over-year. to 105 units for sale—driven by more XLS/XLS+, CJ1+, X, and Mustang aircraft on the market, Jefferies said. This is still only 2.7 percent of the active fleet. Bombardier aircraft inventory has scaled up by 71 percent, to 60 units, with available Challengers surging by 600 percent.

Gulfstream's available inventories similarly grew by 78 percent. Jefferies said Amstat data shows Gulfstream has produced 23 G700s as it prepares for a third-quarter 2023 entry-into-service. Ostensibly, 17 would be for customers, given the six flight-test airplanes.

Dassault's available inventories are also up 83 percent, but with only 11 units for sale that amounts to just 2.1 percent of the active fleet.

Meanwhile, list prices for available Cessna Citations are up 37 percent year over year. Embraer prices are up 27 percent, Dassault Falcons cost 15 percent more, and Gulfstreams saw a 3 percent increase. Bombardier inventory pricing increased 21 percent, but Learjets are soaring, with prices escalating 113 percent year-over-year in December.

Conventional wisdom has it that new vehicles are worth more than old ones. But there are exceptions—throughout 2022, the price of used cars went through the roof as the production and availability of new vehicles became increasingly limited. Aircraft pricing has been quite similar.

“We live in a world where an aircraft that is a year old in many cases is worth more than a brand-new one that is yet to come off the assembly line for the mere fact that the older aircraft is available right now,” says Chris Reynolds, business aviation valuations manager for Aircraft Bluebook.

Intense demand has created a seller’s market
Pre-owned aircraft market could moderate in 2023, some experts say
Reynolds confirmed that fourth-quarter data concludes aircraft valuations, across all types and sizes, continue to rise or represent no change since earlier in 2022.

In business aviation, since time is the ultimate value, trumping the latest technology or the flashiest upgrades, there is a good chance an airworthy aircraft that hits the market could sell for a higher price than one that will take an OEM a year or more to deliver. Thus, the market remains in the seller’s favor.

“In a traditional market, any time fleet availability goes from about 10% or higher, it becomes a buyer’s market,” notes Reynolds. “I’d say we’re currently below 5% in most sectors, with others showing zero availability.”

This trend is continuing even though charter demand has cooled off slightly.

One reason the business aviation aircraft market is tight is that first-time buyers are not bringing usable trade-ins to replace new aircraft they scoop up. Regardless of size, type and year, prices are all over the place due to the fierce competition for aircraft—which in many cases occurs off-market and through internal connections. Amid this unpredictability, the only generalization that can be made is that prices are up, which is not the way things usually happen.

Traditionally speaking, legacy aircraft depreciate around 6-7% per year, and by the time they have weathered a decade of wear and tear, the aircraft’s value is typically half the original worth. The financial crisis of 2008 delivered a blow to the business aviation market, and it took the COVID-19 pandemic to help accelerate the leftover recovery.

However, some experts predict the pre-owned market will moderate in 2023 to more “reasonable” levels, with inventory expected to increase. When that occurs, pricing will ease or decline, says Carlos Brana, Dassault Aviation executive vice president of civil aircraft. A decline in used-aircraft pricing broadens the gap between the cost of new and used. That can slow the decision process of buying a new aircraft, Brana says.

A move to a more moderate market, though, could mean that those who waited to purchase a used aircraft in the midst of record-low inventory and rising prices may decide now is the time to buy, he adds.

 Matthew Orloff

Based in Los Angeles, Matthew Orloff covers business aviation for Aviation Week Network.

MIAMI—A record number of aircraft transactions could occur this year, and given upcoming changes to U.S. depreciation accounting rules, will this put even more of a race to close deals by the year end?

It could, but it depends on a buyer’s risk tolerance level. 

The issue at question is the 2017 U.S. tax bill that provides 100% bonus depreciation on certain assets, including aircraft, “but it begins to phase out next year (up to 100% in 2022, 80% in 2023 and 60% in 2024),” says Kent Jackson, Jetlaw’s managing partner. 

The same tax bill also eliminates “like kind exchanges, which had been used to avoid recapture of depreciation. Like kind exchanges weren’t necessary while 100% bonus depreciation is available, but as bonus depreciation phases out, there will be tax issues. And no one can fully predict what Congress will do next. Altogether, these factors put pressure on buying aircraft this year, particularly for those who are replacing aircraft,” Jackson says.

For motivated buyers, it’s still possible to close an aircraft transaction this year, but “there is risk involved with it,” especially if buyers proceed with only a visual aircraft inspection or no inspection at all, says Keri Dowling, Air Law Office president, speaking at the Corporate Jet Investors Miami event.

“The fourth quarter is always a horse race and this year is no different. In fact, I’d argue it’s a little accelerated this year because of the changing bonus depreciation,” says Andy Priester, Priester Aviation’s chairman and CEO, speaking at Corporate Jet Investor Miami.

While buyers waved inspections last year around this time, now Dowling says she’s having more “substantive conversions with the entire team of the purchaser about whether they really want to take the bonus depreciation and whether that’s something that really fits into their overall tax planning structure,” Dowling says. 

While the depreciation appeals to some, to others they “realize that the bonus depreciation looks really good until you get down to the nitty gritty,” she adds.

Regardless of whether buyers are motivated by the bonus depreciation, expect the rest of this quarter to be busy and MRO slots for pre-buy inspections to be hard to book.