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Measuring The Private Jet Market In 2024
10.05.2024 - 21:35 / forbes.com / Richard Aboulafia
Last night, I returned home to Miami after spending a bit longer than I had anticipated in San Diego, where I had been attending the Spring meeting of the International Aircraft Dealers Association, also known as IADA. In fact, I wasn’t supposed to be at home today.
I was supposed to be visiting my father, who lives in what the airlines call a spoke city. In other words, to get there, you must change flights at one of their hubs.
Thanks to American Airlines, it didn't work out that way, which is as good a segue as any into why private aviation is likely to be more relevant than ever for those who can afford it, emphasis on afford.
So how is business in the world of private jets?
After the pandemic led demand spike, is the industry headed up, down, or somewhere in between?
Managing Director of AeroDynamic Advisory Richard Aboulafia, who has been tracking aviation for more than 30 years, calls it "one of the more confusing market cycles I've seen."
The IADA dealers, who operate like real estate agents for consumers and corporations who want to buy private aircraft, particularly preowned ones, are naturally optimistic.
The group's members, who represent about 50% of preowned transactions globally, saw a 5.9% year-over-year increase in sales, with 253 closings in the first quarter of 2024.
Like their brethren in the property market, brokers need something to sell, something that was lacking as inventory hit record lows during 2022.
Rollie Vincent of Rolland Vincent Associates, an industry analyst and former manufacturer and fractional executive, said while inventories are still well below their 10-year averages, they have rebounded from substantially from those low points (image below).
Back then, buyers eschewed standards such as pre-buy inspections, which were more difficult due to pandemic restrictions, and simply wired millions of dollars to buy used private jets based on pictures. Many deals were made before aircraft were even listed.
As I wrote last year, even as the bloom was off the rose, aircraft owners saw the benefits in being discreet, concerned their pilots would leave before they could sell their jets.
Today, the outlook is bifurcated.
Vincent surveys over 500 flight departments and users quarterly. His research shows a diminished, slightly negative sentiment over the past eight quarters from North American respondents who represent the industry's largest market of buyers.
Vincent told the audience that their outlook coincides with lower U.S. consumer and business confidence and a shift in the Federal Reserve's approach to interest rates, "that money should cost money."
At the same time, Aboulafia's research paints a different picture.
He says the industry is constrained not by demand but by
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