Gerrard Cowan speaks to a selection of leading Business Aviation professionals to discover more about the current US market...
While the US business aircraft market experienced a post-Covid boom, there have been signs of softer demand in recent months. Nevertheless, although the sector is adapting to new economic and geopolitical realities, industry experts retain strong optimism looking forward.
Among the factors impacting today’s market, Wen Chongjian, Vice President, Aircraft Sales at Leviate Air Group, says the US business aircraft market in 2024 faces a unique set of challenges and opportunities, driven by political uncertainty, economic factors, and shifting demand dynamics.
“Compared to one to two years ago, demand in the pre-owned market has softened somewhat, with more buyers taking a cautious approach due to heightened uncertainty and higher interest rates,” Chongjian notes.
“Key geopolitical events, such as the ongoing war in Ukraine, have added complexity by impacting fuel costs and global supply chains, indirectly influencing aircraft ownership decisions.”
Chongjian reckons the more immediate drivers of demand in the US market are domestic political uncertainty tied to the Presidential election in November, as well as broader economic conditions reflected by inflation and interest rates.
There has been a gradual increase in inventory across most aircraft markets, which is impacting pricing strategies, Chongjian notes. The overall percentage of fleet for sale is still below 10%, which typically indicates a seller’s market, but there are signs of transition in some segments, he says.
“Older models with higher operating costs, for instance, are increasingly entering a buyer’s market due to reduced demand, and certain markets have already dived deep into the buyer’s market with nearly 18% of the fleet for sale,” he qualifies.
“The current interest rate at over 7% for aircraft financing is making aircraft ownership more expensive, especially for those models that are less fuel-efficient or come with higher maintenance costs.”
This article was originally published by AvBuyer on October 3, 2024.
