A dip in demand for business jets is “a blessing for most brokers”, according to a new report by aviation intelligence consultant ALTEA.

Demand is expected to drop this year, with business aviation newcomers potentially having to cut travel and maintenance expenses in the case of an economic downturn, according to the report, ALTEA’S Perspective on the Pre-Owned Business Jet Marketplace in 2023.

It found that the average number of days on the market will rise in 2023 and more sellers will lower their asking prices, with more pre-owned business jets coming to the market on the supply side. Inventories will increase, with buyers benefiting from more choice and less pressure to close purchases quickly or wait for a downturn to buy for a lower price. But ALTEA said the shift is not a cause for concern, factoring in OEM backlogs.

“This shift away from a heavily biased demand-driven market is a blessing for most brokers given the rather extreme market conditions that existed post-COVID,” said Andrew Butler, partner, ALTEA. “Quality pre-owned aircraft did not come on to the open market very often, being snapped up before many discerning buyers even knew they were for sale.”

He said that this market, rather than going “back to normal”, represents a “new normal” post-pandemic. “The old normal had seen our industry plunge since the worldwide financial collapse of 2007/2008,” he said. “Inventory levels post the financial crisis reached nearly three times the inventory level of today. Whilst that was a short-lived experience admittedly, inventory levels remained at nearly twice today’s number right up until the pandemic of early 2020. Evidence shows that the business aircraft market had an oversupply of inventory for more than 10 years.”

Jean Sémiramoth, partner, ALTEA said that while the market is “undoubtedly narrowing, there remains a gap between supply and demand for now”. He said: “Rather than a disruption, we’re seeing a mild shift whereby, to the benefit of buyers, market conditions favour sellers a little less without moving to a buyer’s market, at least in the short term.”

Sémiramoth said buyers are more likely to want more pre-sale inspections and complete records and delivery conditions, adding that sellers and financiers alike should engage appraisers to get accurate estimates of aircraft values to insure additional costs aren’t incurred.

ALTEA said it has already seen a number of newly ordered aircraft become “quietly available” with some deliveries due in the third and fourth quarter of this year – another sign the market is cooling.

Read the full report here.