How to Price Your Jet with Good Market Intel

Beyond the obvious, what should business jet sellers consider before entering the market? René Armas Maes discusses important data sources and market intelligence...

René Armas Maes  |  30th March 2023
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René Armas Maes
René Armas Maes

René Armas Maes, Vice President, Commercial, Jet Link International LLC, is an international...

How to apply market intel to aircraft value

Trying to find a fair value for your aircraft requires solid market knowledge and sound research techniques. Several market intel data sources should be reviewed in order to gain a firm grasp of current market conditions, establish the right time to place the aircraft for sale, and know what price is realistic.

As an example, according to AMSTAT, at the end of Q3 2022, ‘Heavy Jet’ values continued to rise, but those increases were showing signs of slowing down. During the 12-month period prior to this, pre-owned Heavy Jet activity had been consistently strong – indeed, ‘Heavy Jet’ values between January and September 2022 were 26% ahead of where they were in the same period in 2019, and just 4% of the active fleet was available for sale (compared to a ten-year average of 8.6%).

Nevertheless, those sellers who have their finger on the market’s pulse will be aware that inventory is creeping back up again and will know to price their aircraft in alignment with what the market is willing to pay today.

Take a Broader View in Relation to Aircraft Value

Moreover, a seller will need to understand their aircraft’s value in relation to other jets of the same make/model. This requires an understanding of both the pre-owned and new aircraft markets.

Let’s assume the seller operates Bombardier Challenger 300 s/n 88, which was originally shipped from Bombardier’s factory to its first owner in Q1 2006, two years after the first Challenger 300 entered service.

As per GAMA’s historical aircraft shipment reports, between 2004 and 2006 there were 28, 50 and 55 Challenger 300 units delivered, respectively, and these are the aircraft the seller is most likely to draw close comparisons with their own jet, in terms of hours on the airframe and engines.

The seller will need to take into consideration the proximity of their aircraft to its next major maintenance inspection or overhaul, since this will have a bearing on its value, as well as any upgrades and modifications that it offers potentially enhancing its value over the competition.

Approximately 450 Challenger 300s were delivered during the model’s production run and, interestingly, the model proved especially popular with fractional ownership and charter operators, meaning that an aircraft operated in a Part 91 corporate flight department could have much lower times on their engines and airframe than other models on the market that previously flew Part 135 (charter) or Part 91K (fractional ownership).

This is again likely to have a bearing on value (assuming the seller’s jet has no major inspections due anytime soon).

After ten years of production, the Challenger 300 was replaced on the production line with the upgraded Challenger 350 (offering a range improvement among other things), and later the Challenger 350 was itself replaced by the Challenger 3500 variant (offering a host of new features).

Fortunately for owners of Challenger 300s, while Bombardier upgraded the model twice, it remains invested in aftermarket support and has established an extensive network of maintenance centers around the world to ensure continued customer support and supply of spare parts.

This is not always the case. Owners of aircraft with more limited production runs (say, for example, fewer than 50 aircraft) or much older jets may find aftermarket support and spare parts less readily available impacting the appeal of the aircraft, limiting the pool of potential buyers, and reflecting in its resale value.

Aircraft are Depreciating Assets

Any aircraft owner knows its real value is in the time- savings it offers them, not in the eventual resale value.

Despite prices skyrocketing for pre-owned jets during the past couple of years, it could be argued this was only a market correction following more than a decade of value erosion in the pre-owned market.

The reality is that private jets depreciate over time - and traditionally they always have done. A savvy seller will refer to sources such as Aircraft Bluebook and VREF to monitor price trends on new and pre-owned jets.

For example, a look at the Spring 2023 Aircraft Bluebook data reveals that our hypothetical 2006-model Challenger 300 seller can expect to fetch an average retail value of $11.5m, down $500k from a $12.0m average in Winter 2022. That doesn’t factor in aircraft-specific information that will further adjust the realistic value they should be seeking.

Other Market Trends to Factor into Price

Don’t overlook other market trends, including the charter and fractional ownership markets (covered by reputable sources such as WingX Advance).

If the charter/fractional markets see less demand (as many are now predicting), the major operators could opt to reduce their fleets, adding more inventory to the market and ultimately more competition for your aircraft.

There are multiple well-established publications and portals that publish business aircraft market data and reviews that can help you evaluate specific business jet segments and regional activity, while helping answer questions on the timing and right price expectation for your asset.

Assuming you are ready to sell your aircraft, use these sources wisely, and combine them with the knowledge and experience of a reputable aircraft broker who will offer invaluable insights as part of their service to you.

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