Asset Insight’s latest AI2 Market Report found that as inventory of pre-owned business aircraft continued to increase during 3Q 2022, so too did the overall ask price, and there is continued “very strong” demand.
Additionally, the for-sale fleet’s quality rating continued to be “excellent”, while maintenance exposure (the cost of embedded/accrued aircraft maintenance) remained stable.
Overall, the inventory fleet’s marketability (ETP ratio) set another 12-month best (low) figure at 52.7% for the 134 fixed-wing models and 881 aircraft listed for sale covered by Asset Insight’s 3Q 2022 AI2 Market Report.
Inventory of for-sale pre-owned business aircraft has increased monthly since March 2022, but remains below 2021 levels for the same period, for each category of aircraft. Fleet-wide, monthly increases raised 3Q 2022 inventory by more than 11%. The average ask price rose another 8.9% during 3Q to set a 12-month value peak, while unlisted aircraft sales are reportedly down substantively, and young, low-time inventory remains scarce. But not all aircraft categories are seeing the same relative ask price increase, as mid-size jets are up 140% year-over-year.
“The pre-owned business aircraft market continues to defy the generally accepted laws of supply and demand,” said Tony Kioussis, president of Asset Insight. “As we enter the final quarter of 2022, we have to ask ourselves: what will give and when? Will we see inventory continue to climb and price increases naturally ebb? Will we see prices continue to climb while fewer aircraft enter the for-sale fleet? Or, will the business aircraft market continue to redefine basic economic principles? 4Q 2022, and 2023, should be quite illuminating.”
The latest maintenance exposure to price ratio (ETP ratio) decrease evidenced a marketability improvement for the listed fleet. Asset Insight said an ETP ratio over 40% represents excessive embedded maintenance in relation to ask price and hinders aircraft marketability. During 3Q, aircraft with an ETP ratio above 40% were listed for sale nearly 89% longer (on average) than aircraft with an ETP ratio below 40% (175 versus 331 days on market). Average days on market decreased/improved 25% during 3Q to 227, the second consecutive historical low figure.