Press Release: 00009

6 December 2009

Source: http://blog.jameslist.com/2009/jameslist-exclusive-the-state-of-the-jet-market/

As some of our readers might have noticed, we're currently working on broadening the scope of our blog here at JamesList. We want to offer something else than just your upcoming models and luxury goods gossip. That's why we introduced the JamesList Exclusive feature, aiming to provide a peek into the inside of the industry. In the past, we have featured ínterviews with subject experts, dealers, manufacturers and all sorts of people involved in the trade. The feature we have lined up for you today is not necessarily focused around one singular product, but rather the temperature in the business jet market. Aiding us in this endeavour is Mr. Tim Barber. Tim, managing director over at JetBrokers' European section, is based in the UK and was kind enough to share his thoughts on what the business jet market climate currently feels like. JetBrokers are old-timers in the game, with offices on both shores of the great pond providing them with a dynamic insight into the business.

James: A common concern for our visitors here on JamesList is, as it is for most of us, is the state of the worldwide financial market. A jet acquisition is hardly something you do in a heartbeat. What are your thoughts?

Tim: Has there ever been a better time to buy your business jet? The answer is probably no. Today you will find just over 15% of all business aircraft are for sale - a few months ago it was closer to 20%. At the beginning of the year every buyer appeared to be getting a bargain, today those bargains still exist but the vendors tend to know that the market has stabilised to some extent and the availability of "distressed" sales are now perhaps the exception, not the rule.

No one likes to come to terms with the fact that their $10m asset is now worth $6m, or less, but time is a great healer and as the months pass the bitter pill becomes easier to swallow, so there have been some truly astonishing deals to be secured this year.

James: How well do you think the market will doing in the near future?

Tim: No one really knows whether we've hit the bottom or whether there is another shock for us all just around the corner but the consensus appears to be that any further downward movement of prices will be selective. A healthy market would see around 10% of the bizjet fleet available and in certain sectors your will now see figures well below this level. For example, at the entry level you'll find the impressive Socata TBM850 with just 7.0% of the fleet for sale. Amongst the mid-size the Citation XLS has just 5.4% available and at the higher end the statistics for the Gulfstream 550 and Falcon 2000 are 5.1% and 1.2% respectively. Not surprisingly these owners will view their aircraft as still being sought after, regardless of what else is happening around them.

However you'll still find plenty of older aircraft where 25% - 30% or more are available and it is here you'll find vendors having little choice but to discuss your offer, regardless of how far it is from their aspirations.

As a summary of the market and different sectors, Tim submitted a list of what the most sought-after aircraft are likely to be, in no particular order:

Very late models
Totally refurbished or low time and made to look like a very late model
Excellent pedigree with no problems/squawk list
Current generation and still in production
Glass cockpit without technical issues
Priced competitively, ahead of the market

…and the less attractive aircraft:

Still advertised at the 2007 price.
Old generation, featuring avionics that is long outdated
Incomplete or missing logs
A squawk list the size of the aircraft
Where every owner seems to be selling at the same time
Been on the market longer than anyone cares to remember

And there you have it! JetBrokers Europe have their own hideout right here on JamesList. Among my favorites - and it's not even a jet - is the 1961 Beech G18 currently for sale at a bargain price of $189,000.

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