Pre-Owned Aircraft Marketplace: What’s New in Q2 2023?

Looking ahead, both Bombardier and HondaJet have introduced certified pre-owned programs. This trend is expected to continue growing. Both initiatives provide warranties, complete aircraft refurbishment and modernization, and VREF acknowledges them in its database under ‘conversions and modifications’.

In other news, Textron unveiled the Citation Ascend in May, an upgraded Citation XLS, which makes sense, given the platform's popularity. And in General Aviation the FAA recently released its revised listing of amateur-built kits, which now includes the Bushliner Cyclone 180, a replica of the ever-popular (and scarce) Cessna 180. We expect many within that market to be paying close attention to this new offering.

VREF has added several new aircraft models to its database and books, including the Embraer EMB-120, Extra EA300, 330LT, 300/L, Vans RV-14/A, RV-7/A, and Airbus TwoTwenty. With those updates and announcements out of the way, here’s a summary of the important market trends for Q2 2023...

Business Jet Market Highlights

In the words of Howard Cosell, “Down goes Frazier, down goes Frazier, down goes Frazier” – except here, Frazier isn't the heavy-weight boxing contender, it is the business jet market.

This should come as no surprise, as not one person I have spoken to in the 30 days prior to writing had reported positive news. Yes, deals are happening, and yes, aircraft are selling but there are quite a few challenges to keeping deals on-track these days.

Moreover, any recovery the industry was seeing from 2008 was only value-based as research and development are beyond slow from the OEMs, and there has been little to no progress beyond some new ultra-long-range aircraft.

The business jet market is in ‘correction’ territory, and with a slower-than-normal summer forecast, we might be seeing the first of many price reductions. Cash is king, and those willing to take risks are rewarded based on pricing and terms of recent transactions.

Turboprop Market Highlights

The turboprop markets, which benefited from the skyrocketing jet values, have finally seen a correction as market pressure begins to seep in. We had to have known things were in for correction when many Twin Turboprop values exceeded Entry-Level Jet prices.

The correction we are seeing in this market is similar to others, but the question is whether a 10% drop in value will be enough to keep buyers interested? Time will tell – and so will the data – but a quick look at the Pilatus PC-12 and Piper Meridian markets will demonstrate that inventory has doubled, if not tripled, in the past six months, and prices are being compressed to attract buyers who are willing to pay with cash.

Helicopter Market Highlights

The helicopter market has also entered ‘correction’ territory, having seen demand fall month-over-month for five successive 30-day periods.

The number of transactions on the Turbine Helicopter side has dropped considerably as financing and collateral remain jittery. With that being said, the Bell 412, Bell 427, and Bell 505 have all adjusted downward, as did the Agusta A109E, AgustaWestland AW109SP, and AW119.

The Robinson R66, meanwhile, is down as the average aircraft is taking more than 300 days to resell, as are the Robinson R44 Raven 1 and Raven 2.

It's not all doom and gloom in the helicopter market, though. A steady number of agricultural and service/utility transactions are still coming in.

Piston Single Market Highlights

The single-engine piston market is finally starting to contract in Q2 2023, although most models have remained relatively flat since Q1. The data is a little misleading, however, as almost every model has seen pressure regarding time to remarket, and many brokers and sellers report numerous price reductions to initiate sales (many of these aircraft were listed with pie-in-the-sky asking prices well above what the market would bear).

The newer the aircraft, the bigger the fall. Depreciation is finally starting to impact aircraft that seemed to be untouchable, including the market leader Cirrus SR22T (down 10% since Q1).

The Cirrus is also an indicator, and based on the softening in the financing market and the hard deposits Cirrus requires to place an order for a new aircraft, the question becomes how many buyers are willing to take delivery instead of walking away. If buyers already own an aircraft, timing a trade or sale might be impossible given the current financing market restrictions.

It is essential in this climate to remember that we’ve witnessed a lengthy bull run. Any correction we see short-term will be just that, a correction.

Piston Twin Market Highlights

The twin-piston market has remained mostly unchanged since last quarter. However, transactions are few and far between.

This market is the most sensitive to economic and maintenance issues, and with the cost of many engines now up 40% (or more) since pre-covid, it is little wonder that few buyers are willing to ‘take the plunge’. 

Combining increased insurance costs, higher operational costs, and the soaring cost of a new aircraft, the multi-engine piston market will remain sensitive for the foreseeable future. With that being said, the market is either flat or starting to adjust downward.

More information from https://vref.com