Quarterly Insights
2023-12-31
2023 Q4 State of The Market
View our comprehensive analysis of recent market trends.
MARKET HIGHLIGHTS
- The quarter-over-quarter trend of increasing inventories in the Top 60 pre-owned jet markets continued for the seventh consecutive quarter, now at 6.6% of active fleet for sale. In contrast, December saw the first month-over-month decrease since December 2022. This is expected to continue into January 2024—making this the first time since January 2022 that we have seen decreases in consecutive months.
- Retail transaction volume was the strongest of the year in Q4, at 407 aircraft sold, which was down -6% YOY versus -35%, -21%, and -15% respectively in Quarters 1 through 3.
- Early 2024 indications from January point toward a strong start, with higher than expected interest from buyers coupled with decreasing inventories, likely due to the continued strong US equities markets.
PRE-OWNED JET SALES AND US PRESIDENTIAL ELECTIONS
- The U.S. presidential election cycle will again take hold of the nation this year and will be discussed ad nauseum on news outlets, magazines, podcasts, blogs, financial reports, and more. But it also raises questions among prospects, clients, and industry colleagues as to how it impacts our industry.
- Historical sales and inventory data from AMSTAT for all pre-owned jets going back to 2000 shows that the average S&P 500 return does vary significantly in presidential election years, averaging 0.1% annual return versus an 8.9% average annual return in years without a presidential election. However, pre-owned aircraft sales markets seem to be much less affected, on average, with only a 0.1 percentage point difference in the percentage of the active fleets sold pre-owned in those years.
- This lack of a statistically significant difference in the demand metric is surprising, given the massive difference in investment returns. It becomes even more surprising when we look at the six election years individually—with a reminder that three of them were entrenched in historic economic challenges presented by the dot-com bubble, the housing crisis, and the COVID-19 pandemic.