Dear friends,

Historically, election years have been perceived as challenging times for aircraft sellers. Conventional wisdom suggests that political uncertainty dampens market activity, leading to sluggish sales. Yet, when we examine the data, we often find that sales volumes in election years align closely with those of the preceding and succeeding years. The pattern we observe is typically characterized by three slower quarters followed by a flurry of transactions towards the year’s end, once the political dust settles.

This year, however, presents an extraordinary level of uncertainty. As I write, recent events—including a high-profile assassination attempt, the current President’s unexpected withdrawal from re-election, and the upcoming Democratic National Convention with a new candidate—have compounded the usual unpredictability. Although this letter is not meant to delve into political analysis, it’s important to recognize that these events do impact the pre-owned aircraft market. We’ve seen a notable uptick in “wait and see” conversations recently, reflecting the heightened apprehension among potential buyers and sellers alike.

Seasonal trends also play a role in market dynamics. Summer months often bring a slowdown, as aircraft owners take advantage of the warmer weather for family vacations and busy travel schedules. However, the end of the year will approach quickly, and it’s crucial to keep an eye on some key market variables.

One notable trend this year is the increase in inventory across all aircraft makes and models. Although the percentage of fleet for sale remains healthy and below 10%, suggesting a continued sellers’ market, it’s essential for sellers to remain strategic. With increased inventory, pricing becomes critical. Aircraft must be competitively priced and feature compelling attributes to attract buyers in these slower periods. Sellers aiming for higher price points may face extended time on the market and end up chasing the market down as the year progresses.

Looking ahead, there are a few economic factors that could offer quick wins to the incoming administration, regardless of the election outcome. Potential interest rate reductions and the return of 100% Bonus Depreciation are still on the table for 2024, which could create a favorable environment for aircraft transactions.

As we approach the fourth quarter, we might be on the brink of a significant uptick in activity. My advice? Act proactively and anticipate the year-end rush. Supply chain constraints and labor shortages continue to affect our industry, which means buyers and sellers who delay decisions until November may find themselves grappling with limited availability for pre-buy inspections, parts, and service timelines.

In this ever-evolving landscape, I’ve recently had the pleasure of reconnecting with many of jetAVIVA’s previous clients, and it has been a wonderful reminder of what makes this industry so special. While market conditions and industry variables may shift, the passion our clients have for owning and operating their aircraft remains unwavering. Whether their aircraft serves as a tool for business, a means of leisure, or a vessel for philanthropy, the enthusiasm and dedication of aircraft owners and aviators are truly inspiring. It’s both an honor and a joy to continue supporting and serving this vibrant community. Here’s to a fantastic remainder of the summer!

Blue Skies,

Emily