With ‘For Sale’ inventory levels across all business jet categories continuing to slide lower, the used business aircraft marketplace is shifting from what has been an extended buyer’s market into a more balanced situation. Rollie Vincent elaborates…
Inventory levels for aircraft that are less than ten years old have been combed thin by savvy buyers seeking what have been historically attractive values. With the US economy now expected to expand at a rate of 2.8% in 2018 (fueled in part by business- and wealth-friendly tax reforms) conditions are improving, and should favor additional business aircraft sales this year.
Meanwhile, the Euro Area continues to rebound at a steady, albeit more modest pace, with the latest economic forecast indicating a 2.4% GDP growth rate for 2018.
As has been the pattern for much of the period since the 2008 financial crisis, just a handful of countries where the highest concentration of business jets can be found have economies that are growing at 3% or more per year.
Collectively, India, China, Turkey and Malta represent just 4% of the world’s bizjet fleet. Encouragingly, the US is inching towards an annual growth rate of 3%, although current forecasts are that both the US and Euro Area economies will slow from their 2018 pace next year.
With the unemployment rate in the US hovering near 4.1%, businesses across the country are under increasing stress to find and nurture the talent they need.
Within the Business Aviation community, more than half the aircraft owners and operators who responded to the recently published JETNET iQ Q4 2017 Survey indicated that they are having difficulty recruiting and retaining pilots with the desired credentials. The long-awaited talent shortage in aviation (certainly in Business Aviation) appears to be finally upon us relating to pilots, technicians and other professionals.
As in other industries vying for the best and brightest talent, the competitive pressures will ultimately drive up wages on a real (after-inflation) basis, a welcome development for many.