Pricing Pressures To Affect 2020 Used Bizjet Market, Broker Says

G500
Credit: Gulfstream

In the pre-owned business jet market, 2019 moved from a seller’s market early in the year to a predominantly buyer’s market by its close, said Brian Proctor, Mente Group president and CEO. 

“We expect that trend to carry over into 2020 with perhaps fewer transactions and heightened price sensitivity for used business aircraft,” Proctor said. 

The last two weeks of 2019 were “extremely active” with more high-dollar transactions. At the end of 2019, buyers and sellers made deals on larger business aircraft to hedge against the uncertainties of an upcoming presidential election and the instability in some parts of the world, such as the Middle East and Asia, he said. 

“The pre-owned market had a decent year overall, but it certainly wasn’t the best year ever,” Proctor said. “However, from a dealer’s perspective, it was our highest transaction dollar volume in the past 10 years. I expect that could be true for the industry in general.” 

In 2020, he expects the used market to be price driven.

“Strategically, we are planning for a reasonably active first quarter,” Proctor said. “The second quarter will slow down a little bit with an even slower third quarter. Then, after the election, the rest of the fourth quarter will be very active.” 

Buyers are expected to be opportunistic throughout the year.

“A lot of wealth has been created in the last couple of years, and those buyers will continue to buy if and when they see good deals in the marketplace,” Proctor said.

Pricing pressures will impact both new and used business aircraft. 

“Sellers and new aircraft manufacturers are going to have to be very, very responsive to what’s going on in the marketplace in 2020,” he said. 
 

Molly McMillin

Molly McMillin, a 25-year aviation journalist, is editor-in-chief of The Weekly of Business Aviation, a market intelligence report of the Aviation Week Intelligence Network.