Asian Sky Quarterly 2021 Q4 - 25th Issue

SPECIAL FEATURE: PRE-OWNED MARKET REVIEW
PILLARS OF PRE-OWNED MARKET: G550, G650, FALCON 7X, GLOBAL 6000
Market supply has been at its historically lowest level, which has
been mainly driven by the G550, G650, Falcon 7X and the Global
6000. Currently, these four models make up to 30% of the total
market value, which is 70% of the total large cabin and long-range
model segment combined, based on total 39 business jet models
that we are monitoring.
This segment’s on-market value has been shrinking, driven by high
demand: back in 2016 when at its highest level, these four models’
total inventory value was over US$3 Billion and as of today, it is
US$1.4 Billion – a decrease of more than 50%. For relatively newer
models like the G650 and its ER variants, supply levels have fallen
below 1.5%.
Pricing-wise, as most of the fleet ages, market prices go down due
to depreciation. This has been the case for several years with these
main players. We have however noticed a recent shift, in that pricing
for older models of the more popular types has been increasing.
their aircraft. Unusually, the pre-owned Gulfstream G550 market
might be benefiting from the shift to a seller’s market. Since 2019
as Gulfstream delivered more and more G650s, more G550s came
onto the market, which were often young aircraft that their owners
sold once their G650 was delivered. At the height there were 45
G550s for sale, with asking prices slowly going down. This worked in
favor of potential buyers, as not only could they have many different
G550s to choose from, but they also had a strong negotiating
position when it came to pricing and delivery terms.
The G550 market quickly become the most popular market, with
more than ten transactions frequently closing in a single month
(more if we include off-market transactions). Many buyers failed to
secure their deal as the demand has been driving up pricing – even
with an older fleet listed on the market.
This trend continued into Q4 2021, especially in December which
saw a big surge in transactions.
All these reasons have combined to create bubbles in the market,
with seller’s expectations of having higher final sale prices for
AVERAGE ASKING PRICE TREND
F7X GL6000 G550 G650
Million USD
85
75
65
55
Average Asking Price
45
35
25
15
Jul21
Jan21
Jul20
Jan20
Jul19
Jan19
Jul18
Jan18
Jul17
Jan17
Jul16
Jan16
Jul15
Jan15
52 | ASIAN SKY QUARTERLY — FOURTH QUARTER 2021