Air Capital Insider

A key market indicator for demand for new business jets is the number of used aircraft on the market.  And that’s not a pretty picture.

The number of used business jets on the market has been building steadily since late 2007.  In December, the number rose 2 percent, UBS analyst David Strauss said in a newly-released report.  It’s now up 65 percent from a year ago, Strauss said.

Used aircraft for sale make up 16 percent of the in-service fleet and is approaching the 17 percent peak in late 2002.  The increase is led by aircraft newer than 10 years old. Inventories of newer planes are already well above prior peak levels, the report said.

Delivery positions of new planes offered by planemakers continue to increase. They’re five times higher than prior years.  There is a building number of delivery slots available for popular aircraft such as Cessna’s Citation XLS, the CJ3 and Sovereign, Bombardier’s Challenger 300 and 605 and Gulfstream’s G-450 and 550, the report said. The recent surge in listings reflects reduced customer demand and difficult financing situations, the report said.

The increase in planes for sale and  a decline in flight activity leads Strauss to think that there will be a significant slowing in new aircraft demand.