Bloomberg
Buying a used business jet is getting harder — and that’s a sign of a long-awaited shift in the market for luxury planes.
Only a dozen or so pre-owned Falcon 7X planes are on the market now, down from about 35 a year and a half ago, says Steve Varsano, an aircraft broker in London. When a client wanted to buy the Dassault Aviation SA model, the tightening market pushed him to bid sight-unseen on a plane in India.
Going that far afield would have been unheard-of until recently, so he was surprised to find three other bidders vying for the same plane. Varsano came up empty.
“The tables have turned,’’ said Varsano, founder of The Jet Business in London. Just last year, the person running the sale “would have been calling me everyday saying, ‘Hey, when are you coming over?’’’
The private-plane market is finally tilting towards sellers after years in which a glut of used jets enabled buyers to call the shots. Bolstered by the strong economy and US tax cuts, companies such as Emerson Electric Co., NextEra Energy Inc. and Anadarko Petroleum Corp. are fueling a rebound of purchases.
GOOD TIMING
The timing couldn’t be better for planemakers including Bombardier Inc., Embraer SA, Textron Inc. and General Dynamics Corp.’s Gulfstream unit, which are all rolling out new models. New aircraft deliveries are poised to rise 8 percent next year after being flat or down since 2014, according to JetNet IQ, an advisory and forecasting service.
The US is driving the rebound while demand from emerging markets has flagged, said Rolland Vincent, a consultant in Plano, Texas, who produces JetNet IQ in conjunction with researcher JetNet. About 70 percent of the new aircraft deliveries have gone
to the US, which is home to about 60 percent of the world’s private-jet fleet.
In the US the reduction of corporate-tax rates — to 21 percent from 35 percent — has given companies more cash. The fiscal overhaul also included a rule change to allow full depreciation of capital investments in the first year, which has increased the incentive to buy private aircraft, Vincent said.
AIRCRAFT DEBUT
New models always attract buyers, he said, and a lot of planes are making their debut:
Bombardier is awaiting certification from the US and Europe to begin deliveries of the Global 7500, the largest purpose-built corporate jet. Gulfstream, whose G650 is the current holder of the biggest-jet crown, delivered a somewhat smaller plane, the G500, in September.
It expects another model, the G600 to begin service early next year. Cessna, a unit of Textron, is awaiting certification of its Longitude.
The midsize jet is bigger than the company’s existing Latitude plane.
Not to be outdone, Embraer is increasing the range and improving cockpit controls of its similarly-sized Legacy planes and giving them a new moniker: Praetor. Switzerland’s Pilatus Aircraft began deliveries earlier this year of its first jet aircraft, the PC-24.