Global Jet Capital is a lender in this specialized market
Says industry is well positioned to weather any future economic downturn
The business jet market remained resilient in the second quarter of the year despite declining flight hours and increased inventory levels compared with a year ago, according to Global Jet Capital’s (GJC's) Q2 Business Aviation Market Brief released this week.
The lender noted that in the second quarter, OEMs reported strong order intake and a nearly 2% backlog growth, while flight operations rose by 6% over the first quarter of this year and departures remained 14% above the second quarter in pre-Covid 2019. “Due to the industry’s inherent value proposition—including personal safety, flexibility, productivity, and comfort—there has been a systemic expansion of the user base with a substantial proportion of these new users continuing to utilize business aviation in 2024,” GJC stated.
As supply chain and labor issues continue to resolve post-pandemic, the airframers have been able to increase production and revenues, causing the industry-wide book-to-bill ratio to decline from 1.3:1 in the first quarter to 1:1 in the second quarter. That level is not expected to change through the remainder of the year.
Led by older aircraft, the available aircraft inventory continued its rising trend in the second quarter, reaching 7.7% of the existing fleet. According to GJC, inventory of on-market aircraft older than 13 years has risen 11.9% thus far in 2024, compared with 5.1% for aircraft 12 years old and younger. With the increase, aircraft 13 years old and older represent 71% of all listings.
After declining in 2023 and early 2024, total aircraft transactions stabilized in the most recent quarter and rose when measured by dollar volume. Year over year, the transaction value swelled by more than $1.5 billion, an increase of 12.3%.