IBA: Private jet demand increases, but prices fall

Low oil prices have created an increased demand for private jets in Africa, the Middle East and Asia, according to a new report from the International Bureau of Aviation (IBA), which was published to coincide with Corporate Jet Investor London 2015.

“2015 is shaping up to be an interesting year,” says Chris Lennon, head of IBA’s business aviation and private jet department. “With the price of oil fluctuating to as low as $65 per barrel, there is a growing demand for corporate aircraft, especially within Africa, the Middle East and Asia. Add to this the apparent resurgence of the Corporate Aircraft Market within Europe, the outlook for 2015 is positive in many regions.”

“However, challenges remain. Chinese austerity measures mean corporate jet owners and operators still face restrictions. But this also brings about greater ambition, with Chinese operators intending to expand their services into Europe or invest in existing operators,” Lennon adds. “In the Eastern Europe, with economic sanctions and the weakening of the Rouble, oligarchs and corporations are diverting their attention elsewhere.”

IBA’s full ratings guide includes pricing and availability information for 65 business jet models as well as remarks for each aircraft. The light/medium and large/long-range segment included more ‘strong contenders’ than the other categories – both included four each – with IBA noting Boeing and Embraer’s strong brand image and the innovative nature of the the Cessna Citation Latitude.

The data reflects a drop of around 20 per cent for Cessna Citation Mustang values with pre-owned prices marked at $1.43 million. Cessna’s Citation CJ2 has also dropped from $2.3 million to $2.06 million. Elsewhere, the upcoming HondaJet is described as “a likeable and innovative little jet.”

Looking at the the large jet segment, the Gulfstream G550, which is frequently noted for its large inventory, is priced between $25.3 and $55 million with 31 aircraft on the market compared to 13 units two years ago.

“Have we seen improved market values on early examples?” asks Jonathan McDonald, senior analyst for IBA. “Based upon the oldest Global Express aircraft coming down from $16 million in 2013 to $14.1 million in 2015, or G550s coming down from $27 million to $25.3 million, the answer has to be an emphatic no.”