The past two years have been arguably the most notable years in the last century. As we enter a new year, we reflect on what we have learned from these previous years and gauge what we can expect for the corporate aircraft markets in the year ahead. In the last two years, we have gone from not knowing if corporate aviation would remain intact to an outright frenzy of new owners, sold aircraft, and historically low inventory. This aggressive appetite for corporate aviation may cool a bit as everyone catches their breath from 2021, but I am sure that there are no jet aircraft stuck on a cargo ship in a harbor off the coast of Los Angeles. The preowned aircraft markets are suffering from a prolonged starvation. Buyers are left scrounging for scraps and salivating over old Controller magazines from years past. We’re left wondering, where will the inventory come from for this year? Looking forward in 2022, there is some light at the end of the tunnel for inventory. How many and when will they arrive are the big questions.
We can all agree that inventory will remain low and prices high for at least the next 6 months. Buyers looking to purchase in the next few months will have fewer options to choose from. There are a few potential options that would allow for an inventory resupply and they might be just around the corner. New aircraft, that were ordered in the latter half of 2021, should be approaching delivery in the first two quarters of 2022. As owners take delivery of their new aircraft, they will be more likely to part with their current aircraft. This wave of new aircraft deliveries could help add much needed inventory to a starved market. However, with buyers still lined up from last year, these aircraft won’t last long, and they will not be sold cheap. Depending on the sales strategy that the owner deploys, these new offerings could be gone before ever hitting the open market. Buyer’s looking for their next purchase have a much better chance at acquiring their aircraft by hiring a professional in this market.
Another possible source of inventory could come from a decline in the overwhelming appearance of the first-time buyer. Over the last couple of years, the first-time aircraft owner has shown up in droves. Unfortunately, many of these new buyers were misinformed, either by neglect or deception, on the overall cost of ownership of a jet aircraft. Those that have owned aircraft will tell you that simply closing a transaction is only the first step in a long line of expenditures. Pilots, maintenance, hangar, insurance, fuel, etc., all start to add up over time. It is very likely that a few of these first-time aircraft owners were unprepared for these costs and will be looking to off-load their once prized purchase. If these new “regretful” first-time buyers decide to sell, the pre-owned aircraft markets could see an influx of inventory from recently sold aircraft. The good news for these first-time buyers is that they will be entering a very forgiving marketplace.
As buyers continue to stack up, the search for acceptable aircraft becomes more exhaustive. Regardless of where inventory comes from and how many new offerings the new year will produce, the buying pressure will continue well into 2022. The ball may have dropped on 2021, but it did not alleviate the shortage of aircraft supply. Those with inside knowledge of the markets will be the ones with the greater chances of success in 2022.
Those who know Ryan know his longtime passion for planes. As a matter of fact, Ryan soloed his first aircraft before receiving his driver’s license at age 16. Today, he holds multiple jet type ratings (LRJET, CL604 and B737) and is responsible for aircraft sales, brokerage, acquisitions, market analysis, data research and special projects. Ryan puts client needs first, always respecting time and understanding the importance of investments. Outside the world of aviation, Ryan enjoys spending time with his wife and two children. He also enjoys heading out to the golf course as often as possible.
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