Q1 2023 Pre-Owned Aircraft Sales: A Mixed Bag

In essence, the aircraft market is a mixed bag. Aircraft models are moving at various paces regarding value and their forecast future residual value. Find out which business jet and turboprop markets were especially ‘hot’ in Q1 2023…

Jason Zilberbrand  |  12th April 2023
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    Jason Zilberbrand
    Jason Zilberbrand

    Jason Zilberbrand is the President and Chief Technical Officer of VREF. He is an Accredited Senior...

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    While some markets have clearly peaked, others continue to climb as inventory remains well below average.

    As if we taunted the market to retreat, some models are coming down in value. The aircraft that have run their course are what we’d call vintage or classic airframes. Behind the scenes, these aircraft were built from the late 1970s to the late 1990s, and are becoming increasingly challenging to support.

    Abysmal dispatch reliability, higher than budgeted maintenance expenses, and required upgrades to the avionics panel that exceed the hull value continue to lead to the scrapping of aircraft. The last cathode ray tube (CRT) instrument rolls off the assembly line this year, and we expect even more aircraft to be removed from service because of this fact.

    Other models that have started to come down in price are also seeing increasing supply in terms of aircraft for sale. Bombardier Challenger 300s, Gulfstream GIVs, GVs and G550s, and Dassault Falcon 2000s (all variants) have started to retreat.

    It took roughly twice as long to sell an aircraft in Q1 2023 than a year ago. The combination of longer resale time and increased supply will act to reduce sale prices.

    Caution: we would advise against asking prices tracking the market since we have seen so many asking prices set 30% higher (in some cases) than market value. This inflates the average asking price and artificially increases the days on the market, so it's best not to rely on insufficient data.

    The economy is also starting to change. While I am not anticipating much change to aircraft transaction volumes or consumer desire to buy aircraft, the truth is that interest rates will go higher before we see them start to ease. The Feds will need to see a 4-5% unemployment rate before the interest rate hikes stop.

    I am still cautiously optimistic that the landing will be soft, and that aircraft will continue selling. Still, we must recognize that the scheduled airline operators that pushed so many passengers into private jets (whether Part 135 charter or outright Part 91 ownership) remain a viable option for those on a budget.

    Without further ado, here are the market trends for Q1 2023.

    Q1 2023 Business Jet Market Highlights

    If there was ever a mixed bag, it's the collective business jet market right now. Aircraft that had seen massive run-ups in value, such as the Bombardier Challenger 300, finally saw resistance and dropped 6%.

    • The Citation XLS/XLS+, Ultra, and X are also in a state of correction. Even though activity remains strong, increased inventory and longer times on the market are taking their toll and values are down roughly 4%.
    • Embraer Legacy 500s and Praetor 500s are also down between 4-10%.
    • The Dassault Falcon 2000LX and 2000LXS are down approximately 17%.
    • The Gulfstream G650ER and G280 are correcting downward.
    • Conversely, larger cabin jets have benefited during Q1, with the Bombardier Challenger 604 and 605, Bombardier Global 5000, Gulfstream G450, and Dassault Falcon 900EX all trending up.

    Q1 2023 Turboprop Market Highlights

    Not entirely unexpectedly, some Entry-Level Jet buyers have started seeking other aircraft to purchase as values continue to soar beyond expectations. Twin- and single-engine turboprops have benefitted.

    The utility-based turboprop market has airframes ranging from high performance executive transport to cargo/commuter aircraft, but this wide range of missions also creates complexity regarding value.

    • The Pilatus PC-12, the darling of the single-engine turboprop market, has been flat since Q4 2022 demonstrating that there is a limit to how much someone is willing to pay for an aircraft. Transactions were also slower than in previous quarters.
    • Run-up values have also impacted the Piper Meridian market as buyers seek alternative aircraft or stay on the side-lines waiting for direction.
    • The cargo aircraft did much better in Q1 2023 where post-Covid activity has normalized.
    • The Beech 1900D is up 7% since Q4 2022.
    • The King Airs are a mixed bag. Older aircraft like the King Air 200 have come down from their historic peaks, but King Air 300s are up 7%.
    • The Socata TBM 700 has been up 10% since Q4 2022 attracting many new buyers.

    Continue reading to discover the in-demand piston twins and singles, and the most-wanted helicopter models during Q1 2023 in Part 3, below...

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