As the Charlie Bravo research team gets ready to send out detailed market reports on more than 50 models of business aircraft, we’ve also prepared a high-level view of the market as a whole. The fourth quarter 2017 was surprisingly stronger than anticipated for many aircraft models we cover, considering that markets typically slow toward the end of the year.
Overall, we’re optimistic that the pace of sales we saw in 2017 will continue, as recent tax legislation makes new and used business equipment expenditures 100% tax-deductible for the next five years. We believe an active American market will spur demand around the world, and eventually improve demand for new and better models.
One consistent consideration we hear is from aircraft owners who are choosing to upgrade their aircraft rather than upgrading their avionics to meet 2020 ADS-B mandates. We won’t complain!
Here’s the breakdown:
Overall, the Citation markets had a particularly strong Q4. Inventories decreased almost across the board as transaction levels increased significantly. Cessna is delivering its most popular new Citation models, the CJ3+, CJ4, and Latitude, at a rate of three to four per month. Preowned CJ3s were part of a whopping 34 transactions in the quarter, as many were being sold before they even came to market. The only Citation market that struggled, to a certain extent, was the Bravo, as it continues to be oversupplied. The rest of the Citation jet markets saw solid transaction numbers across the board.
The Bombardier markets weren’t nearly as consistent as those in the Citation world. While some, namely the Challenger 605 and Lear 60XR markets, saw a massive influx of inventory and very few transactions, others, like the Challenger 300, Lear 45, and Lear 60 markets, had a ton of healthy transactions. Global markets, per usual, remained slow and steady.
Gulfstream markets slowed for the most part in Q4, but fleet values also flattened out across the board as their depreciation timelines slowed down considerably. As our Vice President Jake Banglesdorf said, “My conversations with Gulfstream acquisition clients used to sound something like, ‘They are asking $___, but we can negotiate them down 15 to 20 percent.’ Now, after a remarkable frenzy of activity, my conversations sound more like, ‘We better put a deposit down, because there are three other qualified buyers circling this plane.’”
Falcons slowed down a bit in Q4, as expected after a wildly busy Q3. Those markets, however, are still performing at a comfortable level. Despite the cancellation of the Falcon 5X, which made some people nervous, Dassault’s older Falcons are still selling at a decent rate. Those who already own Falcons can rest assured that Dassault won’t be preoccupied with supporting what would have likely been an underperforming Falcon 5X. The Falcon 2000EX EASy, 2000LX, 900EX EASy, 7X, and 900LX markets struggled toward the end of the year, but the 900EX, 2000, 50EX, and 900 markets were hot, all things considered.
After a fantastic summer, King Air markets slowed a bit in Q4, as well, but the quarter should still be considered a win for owners. Inventory levels either remained steady or decreased across the board, and transaction numbers remained in line with what took place in Q3. Some markets even had increased transaction numbers. While the B200 and older C90 markets slowed, the C90B, C90Gt, C90GTi, C90GTX, 250, and 350 models were delivered at relatively high rates, and the 350 market continues to have steady success.
Hawker/Beech markets continue to flag as a whole, and their competing Cessna and Gulfstream models often have half the number of aircraft for sale on the market. However 2017 was better than the previous couple years for Hawker/Beech models. The Beechjet 400A market is steady, as are the markets for the 400XP, 800A, 800XP, 850XP, 900XP, and Premier 1 and 1A. Hawker 800Bs are mostly headed to the parts suppliers, and the Hawker 1000 and 4000 markets are hardly moving, as expected with few support options.
On the Embraer front, those markets finally slowed down from an incredible summer, but were still healthier than most other markets. Instead of seeing 15-20 Phenom 100 transactions per quarter, 10 sold from October through December to put a stamp on a more-than-solid 2017. Legacies slowed even more, as each model ended the year with zero to two transactions in Q4.
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