turbo-prop

Tinton Falls, NJ – August 9, 2018: According to AMSTAT, 5.0% of the Heavy Jet market group turned over in the first six months of the year, the best first six months in this group since 2007.

The report breaks the market into Heavy Jet (>=40,000 lbs), Medium Jet (20‐40,000 lbs), Light Jet (<20,000 lbs) and Turbo‐Prop groups and then further reviews these groups using the following age segments: Newer (<=10 years), Mid‐Age (11‐20 years) and Older (>20 years). Below we use the abbreviation “H1” to describe the first half of the year.

First Half 2018 Resale Retail Transaction performance was better in Larger and Newer market groups and segments:

• At a macro level, there were modest increases in the number of Jets and Turbo‐props sold in the first half of the year compared to 2017 (see Historical Perspective charts 1 & 2), but the overall active population of these aircraft also increased. A more relevant comparison is to look at the percentage of the active fleet that sold by group and age segments (see Historical Perspective chart 3).

• Resale transaction activity in all Heavy Jet age segments performed better in H1 2018 than in the same period in 2017. In each Heavy Jet age segment the percentage of active fleet sold in H1 2018 increased over H1 2017 from: 4.2% to 5.7% in the Older segment, 5.0% to 6.0% in the Mid‐Age segment, and 3.2% to 3.9% in the Newer segment.

• In the Medium Jet group 5.1% of the fleet sold in H1 2018. This matched transaction activity in the same period in 2017 which itself outperformed the first six months of the previous two years. At a segment level only the Older Medium Jet segment performance in H1 2018 beat the same 2017.

• The Light Jet group did not perform as well with 4.8% of the fleet turning over in H1 2018 versus 5.1% during the first six months of 2017. Despite the overall Light Jet performance, 4.7% of the Newer Light Jet age segment turned over in H1 2018, exceeding 4.2% in H1 2017.

• In the Turbo‐prop group, 3.9% of the fleet turned over in H1 2018, modestly up from 3.8% during the same period the year before. The Newer Turbo‐prop slightly underperformed H1 2017 with 3.7% of the fleet turning over in H1 2018 compared to 3.9% the year before. H1 2018 transaction activity in the Older and Mid‐Age Turbo‐prop groups exceeded transaction activity in these groups in H1 2017.

  Most market groups and age segments are reporting inventories at their lowest in many years:

At a macro level, 9.1% of the Business Jet fleet is for sale, the lowest overall percentage since 1998; and 7.2% of the Turbo‐prop fleet is for sale, a historical low in this market. Historical Perspective chart 3 shows that the gap between major inventory peaks and troughs during the last two industry cycles was approximately 6 years. The contraction since the peak in inventory in 2009 has been running for 9 years so far.

• 6.8% of the Heavy Jet fleet is for sale compared to 9.0% a year ago. This is the lowest percentage of Heavy Jets for sale since 1998. The greatest year‐over‐year contraction has occurred in the Mid‐Age (from 9.0% to 6.3%) and Newer (from 7.6% to 5.2%) Heavy Jet segments.

• 9.2% of the Medium Jet fleet is for sale compared to 10.7% a year ago. This is the lowest percentage in this group since 2000. The greatest year‐over‐year contraction occurred in the Mid‐Age (from 11.6% to 9.6%) and Newer (from 6.2% to 4.8%) Medium Jet segments.

• 10.7% of the Light Jet fleet is for sale compared to 11.7% a year ago. Contraction in the last 12 months has been particularly noticeable in the Newer segment with 5.6% for sale today versus 7.9% a year ago.

• 7.2% of the Turbo‐prop fleet is currently for sale compared to 8.2% a year ago. This is the smallest amount of year‐over‐year contraction at the group level but a historical low for the Turbo‐prop market. The greatest year‐over‐year contraction in this market has been from 7.5% to 5.7% in the Mid‐Age Turbo‐prop segment.

  The Average Asking Price data shows recent increases in the newer aircraft segments:

• The Average Asking Price for Newer Heavy Jets is at $26.5M up 8.1% year‐over‐year and 17.7% year‐to‐date. As always, we caution that this is a very small population of aircraft and so the Average Asking Price metric for this segment can be moved considerably by only a few changes. In this case, the Average Asking Price for Newer Heavy Jets jumped in June / July due to additions to the Gulfstream G650 and G650ER, Dassault Falcon 8X and Boeing Business Jet markets at asking prices that substantially moved the average. In contrast, the Average Asking Prices of Older and Mid‐Age Heavy Jets have remained largely unchanged on a year‐over‐year and year‐to‐date basis.

• The Average Asking Price for Newer Medium Jets is at $7.2M up 4.4% year‐to‐date, although off 3.1% year‐to‐date. In comparison, the Older and Mid‐Age segments are off 16.9% and 9.5% year‐over‐year and 3.0% and 4.2% year‐to‐date.

• The Average Asking Price for Newer Light Jets is at $3.3M off 2.0% year‐over‐year but up 4.8% year‐to‐date. In comparison, the Average Asking Price for Mid‐Age Light Jets is up 5.2% year‐over‐year and up 9.8% year‐to‐date to $1.9M. The Average Asking Price for Older Light Jets is now below $700K.

• The Average Asking Price for Newer Turbo‐props is up 11.1% year‐to‐date to $2.9M and up 5.4% year‐over‐year. The Mid‐Age Turbo‐prop Average Asking Price is flat year‐over‐year but up 4.4% year‐to‐date to $1.7M. Average Asking Prices for Older Light Jets continue to slide.

  Read the full Market Update at AMSTAT.