Transactions for medium and long range business jets increased 23% compared to the 1st Quarter 2009. However, when compared to 1st Qtr of 2008 transactions were down 25%. Market exposure, calculated from when the aircraft comes on the market to closing, increased two-fold in 2010.
Selling prices (Market Price) declined an average 12% over 2009 compared to the 39% drop from the 1st Quarter of 2008. Market Price is running an average 20% below Market Value (the value generated by applying standard valuation methodology to an aircraft’s original cost new).
In 2009, 12% of the available fleet [of medium and long range aircraft] was on the market compared to 9.6% at the close of the 1st Quarter 2010. Some of this decrease in inventory can be attributed to aircraft being removed from the market due to unrealistic expectations. Further, the majority of those showing over 10% availability are the older aircraft from the 80s vintage. As of the end of March, the absorption rate (months required to sell the current inventory based on recent sales activity) was showing an average of 30 months.