Asian Sky Quarterly 2021Q1

COMMENTARY: GLOBAL JET CAPITAL
NEW DELIVERIES ($ VOLUME)
PRE-OWNED TRANSACTIONS ($ VOLUME)
2019 2020 2019 2020
$9.5
Billions
$7.4
$5.8
$7.3
Billions
$5.2
$4.1
$6.1
$7.1
1st Half 2nd Half 1st Half 2nd Half
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While new deliveries remained low throughout 2020, increases in preowned
transactions led to improvements in the second half of 2020.
The decline in new volume was a result of a supply side shortage. Manufacturers
reduced production to comply with social distancing policies
earlier in the year and it took time to restart operations and resolve supply
chain disruptions. Manufacturers were also proactive in managing
supply to support aircraft values over the long term.
On the other hand, pre-owned transactions have recovered faster. Transactions,
measured in dollar volume, declined at similar rates for both
new and pre-owned transactions in the first half of the year. However, in
the second half of 2020, pre-owned transactions increased 17 percent
compared to the second half of 2019. The second half improvement in
the pre-owned market suggests a continued demand for aircraft and
indicates that pre-owned transactions have been easier to restart than
production of new aircraft.
FOR SALE INVENTORY
2,433
YTD
2,356
Even as pre-owned transactions recovered in Q3 and Q4, aircraft listed
for sale declined slightly compared to 2019. While there were monthly
variations, owners listed 3.2 percent fewer aircraft through December
2020 than during the same period in 2019. In 2020, the average number
of aircraft listed for sale per week was 45. Compare that to new
listings during the onset of the Great Recession in 2008, which averaged
70 per week.
2019 2020
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PERCENT OF BUSINESS JET FLEET FOR SALE
Total 0-12 Years 13+ Years
15%
10%
5%
Q4 2018
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
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Increasing pre-owned transactions and declining aircraft listings led
to stable business jet inventory levels in 2020. Inventory did increase
through the first half of the year as COVID-19 made closing transactions
difficult. The result was a peak inventory of 10.3 percent of the
total fleet in June 2020 (still considered a healthy level). However, as
pre-owned transactions increased in the second half of 2020, inventory
levels fell, reaching 8.2 percent by December. Furthermore, inventory
of aircraft younger than 13 years old, typically seen as more desirable,
was 6.1 percent of the global fleet. Overall, the effect of COVID-19
on preowned aircraft supply data has been minimal.
FIRST QUARTER 2021 — ASIAN SKY QUARTERLY | 49