Posted June 25, 2009 10:50 AM
By Jake Reppert
A Few Key Business Jet Barometers
Business Jet Transactions Down Since 2007
Whilst talking to anyone in the business jet sector you’ll learn quickly that the number of deals has declined year over year. The graph below details the number of transactions done, one of the most important indicators on the business jet market dashboard.
The ramp up in transactions in the business jet market can be seen clearly here, with 2007 the clear peak. What is important to notice is the apparent gravity that seems to be interacting with the number of transactions.
Another important element of this graph is the percentage of sales transactions which the U.S. market has accounted for. Through 2008, the U.S. market took a much larger hit to the volume of transactions than the rest of the world, but the 2009 (YTD) numbers in the graph above show that the U.S. has started to regain its share. Importantly, this is coming not from an increase in the U.S. transaction volume but from a decrease throughout the world. It will be interesting to see how any recovery will move the dial on the dotted line (above).
Storage Trends since 2007
The graph below shows storage numbers for all business jet aircraft throughout the world.
What was see from the graph above is a steadily increasing number of aircraft in service and in storage, but with an increasing storage share that outstrips the number of aircraft in service, bringing today’s storage share around 4-5%. Embraer recently stated that there are likely about 5 years of used aircraft on the market right now. There are also plenty of aircraft due for delivery over that period.
Market Commentary
The business jet world has indeed entered something of a brave new world, but so have the markets for most major assets. A major demand driver for this class has traditionally been corporate profits, but with the current uncertainty in which direction the current recovery may be heading we’ve still got a way to go before we see a recovery in the type.
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