PRIVATE JET INVENTORY LEVELS
Private Jet Inventory levels are a healthy determinant of market performance. As a rule of thumb, if 10% or more of the fleet of any given aircraft model is for sale, it indicates a healthy buyers’ market, and one can expect a continuous drop in price over time. Inversely, if less than 10% of any given fleet is for sale, it indicates a healthy seller’s market, and one can expect sale prices to increase. However, a decrease in inventory levels typically accompanies an increase in how long the aircraft takes to sell. In such a scenario, it will take longer to find a buyer willing to pay a premium for a model, given its limited inventory levels.
A LOOK AT HISTORICAL EVENTS
The two major world events that have impacted private jet inventory levels have been the 9/11 attacks and the 2020 shutdowns.
First, we saw a dramatic decrease in the demand for private travel following the 9/11 attacks – counter-intuitive given the circumstances. Nevertheless, the manufacturing and production of private aircraft suffered a significant dip.
Secondly, the demand for aircraft increased to unprecedented levels during and after the 2020 Shutdowns. Those who had aircraft did not want to sell. This drove the perceived value of these flying assets to never-before-seen levels. So much so that it has taken about two years for a correction in the market. Experts suggest that many post-2020 buyers are experiencing buyer’s remorse and bringing their aircraft to market at a loss since private jet inventory is increasing in most markets.
DO YOU TRUST YOUR BROKER/DEALER?
The private jet sales world is considered the wild west. There exists almost no federal regulation on becoming an aircraft broker. One can become a private jet broker if you have a phone and a laptop. It is as simple as finding a buyer and a seller and convincing them to transact. Of course, there is more to it than that. But one should not expect to take a test and get a license to start this line of work. So this begs the question, how can a client ensure they are adequately represented? Or how can one verify the legitimacy of a listing? There are a few things an one, as aircraft owners or buyers must confirm with their representative before signing any contracts:
- How long have they been in business
- Are they part of an ethics association like IADA
- Do they have listings major Aircraft Listing Platforms like Controller?
These three questions will give you a quick gauge of the type of experience this potential representative has. Private jet inventory adequately listed on significant platforms like Controller require a high dollar amount to help verify validity. You also want to make sure serial numbers are disclosed on their listings. This indicates the representative holds an exclusive agreement with the seller. This brings additional validity to their operations.