As it is often said, “hope is not a strategy.” And in the ever-evolving aircraft sales market, this rings entirely true. For many entering this market, hope plays a significant role – hope to secure the highest possible price, to strike the best deal, and to breeze through aircraft inspections. Brokers, too, find themselves hoping for seamless and timely closings. However, the reality is that the most successful deals are built on a foundation of clear strategy. To achieve the right strategy, one must be well-informed. So, let’s delve into the developments in the market since our
Firstly, the number of aircraft listed for sale has been steadily climbing since early 2022. While there has been a slight slowdown in the rate of climb over the last thirty days, it remains to be seen if this is a developing trend. Nevertheless, optimism is high for the second half of the year, with dealers and brokers forecasting a busy fourth quarter. This echoes traditional annual sales cycles, and the market’s return to a more pre-pandemic-like fashion makes this expectation reasonable.
However, the biggest variable affecting second-half activity is pricing. Currently, seller pricing expectations are not aligned with current inventory volumes. The prices that sellers could secure for their aircraft in 2022 are no longer reasonable, yet we’re not witnessing price adjustments that meet buyer expectations. This misalignment has led to a surplus of inventory, with aircraft remaining on the market for extended periods.
Despite this, there is good news. Demand for aircraft remains strong, which is a crucial factor in maintaining a healthy market. Savvy buyers are willing to wait for prices to adjust before making their move, presenting a wealth of options on the market. Realistic sellers who price their aircraft in line with current market conditions will find ready buyers eager to make swift transactions.
Other aspects of the market have also normalized. The pendulum has swung, and the days of highly seller-favorable offer terms to secure an aircraft are behind us. Negotiations are now more balanced, creating a fairer and more satisfactory experience for all parties involved in the transaction.
However, we must be mindful of potential risks. As discussed in a recent jetAVIVA article, certain fractional and charter providers may face challenges. If these companies decide to sell their assets, it could lead to an influx of aircraft into the market, putting downward pricing pressure on those models and competing airframes. Sellers should be prepared to navigate this scenario strategically.
In summary, the pre-owned aircraft sales market has normalized, presenting both buyers and sellers with exciting opportunities. However, success in this market lies in being strategic and well-informed. Each make and model has its unique dynamics, and a careful approach is vital to maximize profit and secure excellent buying opportunities.
As a knowledgeable resource in this field, we encourage potential buyers and sellers to reach out for further guidance. With the right strategy and a clear understanding of the market’s dynamics, you can soar to new heights in the world of pre-owned aircraft transactions.