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Retired Private Airplane
In this month’s JETNET >>KNOW MORE analysis, Mike Chase and Marj Rose review and compare the retired business jet fleet.
Discussion of aircraft retirements may not be as exciting as debating the merits of a star athlete’s last game, but a review of retirement data can offer insight on how the business aircraft fleet ages, how it compares in this same respect to commercial aircraft and ultimately how retirements drive the demand for future business aircraft sales. Thus we will consider the details of business aircraft retirements in this month’s column.
For the purposes of this analysis, ‘retired aircraft’ includes those no longer in use having been written-off, parted out, put on display, used for training or other reasons that prevent them from flying.
First, let’s look at the total fleet of aircraft flying today and the percentage, by type, that is retired. Of particular interest in Table A is the fact that ‘Jet Airliners’ show more than two-times the percentage of ‘fleet retirement’ (21.8%) than ‘Business Jets’ (10%).
Fleet Retirements in 2015
Table B, meanwhile, provides a snapshot of retirements in 2015. There were over 1,000 aircraft and helicopters retired last year, and a high percentage of those also were Jet Airliners (654 retirements). Business Jet and Turbine Helicopter retirements were almost equal (120 versus 124, respectively). Business Turboprop and Commercial Turboprop were level with 75 retirements each.
Each group has the age-range in which the most retirements took place during 2015 (highlighted in yellow). Noteworthy is that while 81% of Jet Airliners are retired by 30 years of age, at that same life cycle point fully 78% of Business Jets remain in operation.
The most obvious reason for this substantial difference is the fact that Jet Airliners fly considerably more hours than most Business Jets, thus it follows that they would reach an end-of-life threshold (in respect to airframe hours) before Business Jets. Across all segments, the most retirements occurred (39%) between age 21-30.
Business Jet Fleet Retirements (2004-2015)
In Table C we examine the 12 years before, during and after the recession. Note the pronounced change of behavior by bizjet operators before, versus after the recession: in the four years leading up to the recession (2004-2007) 383 jets were retired, whereas in the four immediately after the recession years (2010 to 2013) 632 jets were retired – representing an increase of 167%.
By age-range during the entire period, 82% of all Business Jet retirements occurred in aircraft aged 31-50, as highlighted in yellow.
Business Jet Fleet (Cumulative Totals)
A few years ago, we looked into the Business Jet fleet retirement data to compare 2013 retirement numbers to pre-recession levels. This analysis gave us a comparison with the production rates of new business jets. The retirement percentage was higher in 2013 than over the previous 10 years.
Depicted in Table D, note that the total number of retired business jets per year has continued to increase over the twelve-year period, from 1,123 to 2,339. Retired business jets represent 10% of today’s total fleet.
The Compounded Average Growth Rate (CAGR) for retired business jets over the past twelve years is 6.3%. During this same period the total Business Jet fleet grew from 14,363 to 23,440 (+9,077 units). The CAGR is 4.2% over this twelve-year period.
Wholly-Owned Business Jet Fleet (by Age & Region)
Table E offers a look at the wholly-owned Business Jet fleet in operation, by continent, to reveal where the majority of the aging fleet is based. Asia (59%) and Europe (53%) have the highest proportions of Business Jets age 1 to 10 years in their fleets.
Several years ago many countries, especially within emerging markets, began proactively instituting limitations and regulations that prevented the importation of older, noisier, Business Jets into their countries. Many of these countries now boast a larger percentage of younger jets (1-10 year-old) than the 32% in North America’s fleet.
Business Jets continue to have the lowest percentage of retired aircraft among all aircraft types. Since the useful age of an aircraft has always revolved around flight hours, the low retirement range could indicate low utilization as the driving factor.
Nevertheless, it could be argued that Business Jet owners should be driven to replace their older aircraft with the latest technology, recognizing the greater benefits of newer models. We will continue to monitor the fleet retirement trends in future articles…