Industry Insights

By 2026, Asia is predicted to be tied with North America in terms of ultra-high-net-worth-individual (UHNWI) population, as shown in The Wealth Report by Knight Frank, cited in our 10 Year Market Forecast. As more individuals are buying private aircraft in Asia, an increase in the UHNWI population could cause a boost in demand for the region.

Asia’s promising position in the global business aviation industry has never been more evident than at the 2018 Asian Business Aviation Conference & Exhibition (ABACE). OEMs, operators and industry leaders were abuzz with the opportunities that Asia presents, speaking of new infrastructure, a better attitude towards business aviation and a steadily maturing market.

Overtaking Europe

Jetcraft is no exception when it comes to optimism about the region. Backed by our consistently healthy sales, we have determined that Asia-Pacific is one of the world’s fastest growing markets, accounting for approximately 15% of Jetcraft’s transactions in 2017. This trend has continued into Q1 of 2018, setting a positive projection for the rest of the year.

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The general aviation community in the U.S. is abuzz with discussions of ADS-B and the 2020 deadline. As the mandate draws near, what do you need to know?

First, many aircraft need to be upgraded in order to comply, so it is recommended that flight departments schedule the upgrades now in order to be sure that everything is completed in time to remain compliant. It is estimated that there are 105,000* aircraft that are not yet equipped, so the maintenance shops will soon become overwhelmed.

Next, be sure to make an appointment with a trusted service center that can help figure out what needs to be installed or upgraded, and can complete it in a reliable and timely manner. It is advised that operators check that their ADS-B Out solution is Version 2, particularly early-equipped aircraft that were installed with Version 0 or 1 systems. Complicating the issue is that Version 2 is not currently required for operations in all international regions of airspace, so it is possible that an...

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Insight abounded at the recent Corporate Jet Investor conference in London, with representatives from across business aviation coming together to share their observations on the industry.

Opening the first day of the conference, Jetcraft’s president Chad Anderson set out a confident forecast for the next ten years, hailing it as ‘a new beginning’ for the industry.

“We’re entering 2018 looking at the glass half full,” he announced. “Based on our forecast, I’d say buyer confidence is going to maintain well into a new business cycle – and the optimism should remain until 2024 or 2025.”

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We are nearing the end of the year, which is a good time to look back on accomplishments and significant developments. This year marked another milestone in Jetcraft’s continued global expansion through the appointment of Danie Joubert as Vice President, Sales. Based in Johannesburg, Joubert represents Jetcraft in Africa, where he is responsible for all sales activities in the region.

Joubert recently shared some insights with SA Flyer magazine on the drivers and challenges facing the business aviation market in Africa.

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Jetcraft’s recently released 10-year business aviation market forecast sees a sector set to enter a new business cycle – one that will be defined by large jets and big revenues. Chad Anderson, President of Jetcraft, takes a closer look at how this will impact the market, aircraft prices and the pre-owned segment.

By Chad Anderson, Jetcraft President

According to Jetcraft’s latest annual 10-year business aviation market forecast, our industry is at a new beginning point. After nearly a decade since the recession, business aviation has good reason to be optimistic as we’re now well-positioned for several years of steadier, healthier growth and expanding revenues. Let’s take a closer look at what’s driving this sentiment.

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Written by Chris Brenner, Jetcraft’s former SVP-Sales, Americas

NBAA-BACE always serves as a good annual reminder to check the pulse of the business aviation market. According to the latest data provided by JetNet, of the 21,870 business aircraft worldwide, 2,285 are currently on the market. This is the equivalent of 10.5% – a level unheard of since November 2007. In other words, pre-owned inventories are back to pre-recession levels.

As the preowned business jet market is a good leading indicator of the new business jet market, this is great news for our industry. Residual values of aircraft are still lower than desired, however, buyers and sellers have seemed to acquiesce to common ground fueling the activity we see today.

From Pause to Fast-Forward

According to JetNet IQ’s third-quarter industry survey, confidence is back up. Nearly half of the respondents indicated that they believe the business aviation market is past the low point of the current economic cycle. The survey goes on to state that overall optimism has rebounded since NBAA-BACE 2016, which took place during the height of a contentious US presidential election.

During last year’s show, I remember industry leaders discussing a “pause” in the market, with many buyers opting to wait until after the election for purchase decisions. Regardless of whether or not this pause actually happened, the market has since gone fast-forward. In North America alone, pre-owned inventory levels are down and good aircraft are being quickly bought up. Whereas Jetcraft became accustomed to carrying 80 to 90 listings over the last 5 years, today we have a level of inventory that suggests a much more fluid market – with 17 sales pending.

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Written by Fabrice Roger, former Jetcraft Sales Director, Latin America

Latin America hosts the second and third largest business aircraft markets by fleet size within the Americas, with Mexico’s fleet (988) recently overtaking Brazil’s (782) for the #2 spot behind the US, according to AMSTAT. There is a healthy appetite for private aviation in the region, fueled by long distances in air travel, increased security concerns and proximity to the United States. However, the market’s growth potential continues to be challenged by economic pressures, government changes, commodity pricing fluctuations and a lack of a modernized infrastructure.

There is still a need in many Latin American countries for more runways, airports and maintenance operations to reach a US business aviation standard of quality and efficiency. Mexico has the most advanced airports and maintenance facilities due to its proximity to the United States. Despite being a top business aviation market in Latin America, Brazil has a very limited amount of runways suitable for business aircraft. The country is starting to privatize airports now, but its current economic and political environment has slowed this process. However, if the new government prioritizes these investments after the planned elections in 2018, it could have a positive effect on infrastructure and growth.

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When buying or selling an aircraft, many believe that engaging multiple aircraft dealers will increase their opportunities and faster materialize the best deal —but this is rarely the case. Working with a high quality and dedicated aircraft transaction specialist under an exclusive representation agreement consistently results in faster, easier transactions with better outcomes.

Here we highlight some of the key advantages working exclusively with one aircraft specialist affords buyers and sellers:

• Tailored Relationships and Expertise: Orchestrating a successful transaction takes time, money, and expertise. The representation agreement signifies a partnership that lets the transaction specialist fully devote its resources to your deal, whether that includes marketing an aircraft for sale, or finding the perfect aircraft to purchase. The partnership also provides peace of mind to you, knowing that a team of professionals is working diligently on your behalf 24/7.

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Selling an aircraft does not have to be an overwhelming endeavor. Keeping in mind the proper pre-sale procedures and knowing what pitfalls to avoid can make the selling process simple and eliminate unnecessary hurdles. Here is our advice on the most common mistakes sellers make and how to avoid them.

Setting an Accurate Valuation – A common mistake made by sellers is not knowing the true market value of their aircraft, ending up with unrealistic price expectations. Sellers should not base pricing solely on upgrades, Bluebook / VREF values, cosmetic changes, and listings that seem similar to their own. Sellers should carefully consider real-time market trends and changes. It is critical to use specific data about the subject aircraft – its condition, maintenance and usage history – to set an accurate figure. Valuations are also critical prior to performing any upgrades or cosmetic changes to best understand what features will help aid in the sale of the aircraft.

Set a Realistic Timeline – One of the most common issues where sellers misstep is establishing a realistic timeline to closing. Many think the process from the signing of the Letter of Intent (LOI) to closing should take only a few weeks, when in reality it could be longer. To avoid extra stresses and pressure, work with a transaction specialist and plan ahead to ensure that a realistic timeline is set, especially if there is an upcoming event like the end of a lease or new aircraft delivery. Also, try not to deter a buyer by pushing too hard for a closing, and be open to a compromise so that both parties can feel good about the transaction.

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