Positive news from the used market (From Reuters) Jan 27 (Reuters) - Preowned business jet prices are seen stabilizing in 2021, boosted by a December blitz of orders, after COVID-19 depressed demand and pricing last year, analysts and executives said.
New entrants to the business jet market and U.S. buyers rushing to take advantage of favorable tax rules they feared could change under the new Biden administration fueled a December rush.
"It was the busiest month I have ever seen in my 20 years of practice," said Amanda Applegate, a partner at Aerlex Law Group.
Some executives have seen continued demand from wealthy individuals in January, although corporate demand was sluggish.
The surge could help pricing and orders for new jets this year, following a decline in 2020 deliveries of new aircraft that analysts put at 20% to 30%.
Orders and pricing of preowned jets offer clues to demand for new planes which is crucial for jet makers releasing earnings this week. Gulfstream parent General Dynamics and Textron Inc report earnings on Wednesday while Bombardier Inc announces results on Feb. 11.
Pre-owned jet inventory dropped to 8% this month, the lowest recorded level to date in this millennium, analyst Rolland Vincent said, citing JETNET figures. A tighter preowned market normally helps pricing and sales of new planes.
The preowned market has roughly four times the transactions as the new plane market, Vincent said.
"I do think it gets firmer this year," Vincent said of pre-owned and new plane pricing, pointing to a more stable market.