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BUSINESS AVIaTION
MARKET BRIEF

OVERVIEW

The business jet market continued to stabilize in Q3 2024 after experiencing unprecedented utilization and demand in the aftermath of the COVID-19 pandemic.

Year-over-year, there was a decrease in flight operations, an increase in inventory levels, and a decline in OEM order intake. Despite this shift, the market continues to show strength and resilience. Driven by strong new deliveries, transactions leveled off following declines in 2023. OEMs reported strong backlogs. Flight operations stayed above pre-pandemic levels, and business jet availability — particularly for newer, more desirable aircraft — remained low. Additionally, the macroeconomic environment experienced steady growth and declining inflation levels, despite ongoing headwinds. Overall, the industry is well-prepared to handle any potential market disruptions.

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Q3 2024 HIGHLIGHTS

  • Global economic growth continued through Q3 2024, and central banks are now lowering interest rates.
  • Flight operations declined 1 percent year-over-year in Q3 2024 but were 1 percent higher than Q2 and 15 percent above Q3 2019 pre-COVID-19 levels, reflecting an enduring expansion in the user base for business aviation.
  • OEM revenue increased 15.3 percent year-over-year in Q3 while backlogs remained high at $45.6 billion.
  • Transactions were stable through the end of Q3 2024 as OEMs continued to work towards resolving supply chain and labor constraints and activity began to pick up in the pre-owned market.
  • As more aircraft were listed for sale, inventory increased in Q3 2024.
  • Most aircraft models continued to experience depreciation in line with historical norms during Q3 2024. However, younger aircraft experienced less depreciation than older aircraft.

GLOBAL ECONOMY

27637 Chart i

Many of the headwinds that affected the economy in 2023 persisted in Q3 2024, including the conflicts in Ukraine and Israel/Gaza and high interest rates. Other factors that may negatively affect economic growth in Q4 2024 include continued de-globalization, trade conflicts, major elections in countries making up 38 percent of global GDP, and slower-than-expected growth in China.ii

Despite these headwinds, global GDP growth was remarkably stable at around 2.7 percent over the first three quarters of 2024. Central banks were comfortable with inflation levels and began lowering interest rates. The U.S. Federal Reserve is expected to continue to lower rates until mid-2025 while European central banks are expected to lower rates throughout 2025.iii Other notable tailwinds include strengthening economies in East Asia, South Asia, and Central America and recovery in the Eurozone from slow growth at the end of 2023.iv In addition, the U.S. labor market has remained more resilient than many economists expected, assuaging concerns of a near-term economic slowdown.v As such, the global economy is expected to remain stable for the remainder of 2024.vi

FLIGHT OPERATIONS

27637 Chart vii V2

In Q3 2024, flight operations declined 1.3 percent from a year earlier, with declines evenly spread around the world. In the U.S., large storms in the southeast at the end of the quarter drove down flight operations. The U.S., along with Europe, also experienced continued normalization of usage following post-COVID peaks. Geopolitical threats drove further declines in Europe as well as in the Middle East and Africa. Fractional operators remained the strongest segment in the market and continued to demonstrate modest growth.

Even as departures declined year-over-year, flights increased nearly 1 percent from Q2 (which itself experienced a 6.4 percent quarter-over-quarter growth rate) and demand remained above pre-COVID-19 levels. Q3 2024 departures were 14.6 percent higher than in Q3 2019, demonstrating a systemic expansion of the user base. Due to the industry’s inherent value proposition – including personal safety, flexibility, productivity, and comfort – a substantial proportion of new users continued to utilize business aviation in Q3 2024. As such, flight operations were lower than the peak witnessed in 2022, but higher than pre-pandemic levels with steady and sustainable growth expected going forward.

OEM BACKLOGS

27637 Chart viii
 

OEM backlogs decreased 1.1 percent year-over-year in Q3 2024 to a still-high $45.6 billion. While industry-wide orders in Q3 declined from the high levels of 2022, they were 20.4 percent above Q3 2019, with demand remaining strong by historical standards. Orders reflect continuing high demand for business jets at a time of relatively low inventory of young pre-owned aircraft. OEMs experienced strong revenue growth, up 15.3 percent in Q3 2024 year-over-year due to increased deliveries and strong service revenue. OEMs still have work to do to fully resolve supply chain and labor constraints (illustrated by labor disputes at major OEMs in 2024). Deliveries increased in Q3 2024, however, reflecting OEM progress with these issues. With revenue increasing at a faster rate than orders, the industry-wide book-to-bill ratio declined from 1:1 in Q2 to 0.9:1 in Q3. In their public statements, OEMs forecast book-to-bill ratios to remain around 1-to-1 through the end of 2024 and into 2025.

TRANSACTIONS ($ VOLUME)

27637 Chart ix

 

Note that Q3 2024 figures reflect preliminary data and may increase as more transactions are reported to the FAA and data providers.

Q3 year-to-date total transactions stabilized in 2024 following declines in 2023, while volume increased when measured in dollars. Over the past few years, new deliveries were held back by supply chain and labor constraints following disruptions caused by the COVID-19 pandemic. New deliveries were also held back by delays in new aircraft certification. OEMs continued to work towards fully resolving these issues, resulting in a 5.5 percent increased in deliveries in Q3 (dollar volume increased by an even larger 17.3 percent due to strong deliveries in the heavy jet segment). With certification achieved for several new aircraft models, OEMs plan to increase deliveries through the remainder of 2024.

The total number of pre-owned transactions was down year-over-year through the end of Q3, although dollar volume was up slightly as buyers continued to favor heavy jets. Transaction volume was hampered by economic uncertainty (despite stronger than expected GDP growth) as well as inertia between sellers looking to maintain post-pandemic value gains and buyers waiting for values to return closer to historical levels. However, the market showed signs of picking up, with stronger than usual activity levels over the summer. Newly certified models making their way into service later this year may result in incremental supply of desirable aircraft, improving liquidity and driving up transactions through the remainder of the year.

FOR SALE INVENTORY

27637 Chart x

As the market normalized following the disruption from the COVID-19 pandemic, aircraft listings began to increase in the latter half of 2022, a trend that continued into Q3 2024. During the post-pandemic period of rapid growth in 2021, many transactions involved unlisted aircraft while public listings were 25.3 percent lower than in 2019. In 2022, sellers began to publicly list their aircraft more consistently (in keeping with the historical norm), driving up the number of new listings 13.3 percent year-over-year. New listings continued to increase through Q3 2024, many of which were older aircraft. In 2019, 13-year-old and older aircraft represented 59.1 percent of listings, a figure that rose to 70.3 percent by 2022. The trend favoring older aircraft listings moderated somewhat in 2024, with older aircraft represented 69.6 percent of all listings at the end of Q3 2024. Listings will likely continue at a similar level through the remainder of 2024 as the market reverts to historical levels.

27637 Chart xi

 

The number of aircraft available for sale ended Q3 2024 at 7.8 percent of the total fleet. As with aircraft listings, the increase was the result of market normalization following the disruptions of the COVID-19 pandemic. With more aircraft being publicly listed, availability rose gradually from the all-time lows reached in 2022. However, it remains below the historical average over the last decade, which was approximately 10 percent of the fleet.

At the end of Q3 2024, the availability of 12-year-old and newer aircraft remained particularly healthy at only 5.6 percent of the fleet. Total aircraft availability was down 33.3 percent compared to Q4 2019. Availability of 13-year-old and older aircraft ended Q3 down 1 percent from Q4 2019, representing 9 percent of the fleet.

RESIDUAL VALUE

27637 Chart xii

 

The above chart compares the year-over-year percentage change in the bluebook value of like-aged aircraft over time (e.g., the difference between the value of an eight-year-old aircraft from one year to the next). Global Jet Capital analyzes a basket of aircraft as a proxy for the overall market. Values vary on a model-by-model basis and observed increases or decreases in value are not necessarily applicable to any specific aircraft make/model. For the value of a specific aircraft, please contact a licensed aircraft appraiser.

As inventory increased, the market shifted from a seller’s market to a more neutral state. As such, price negotiations between buyers and sellers became more balanced over the past year, resulting in price stability. Average business jet bluebook values declined 0.7 percent between Q3 2023 and Q3 2024.

While overall values were largely stable, changes varied across the install base in Q3. As mentioned above, much of the increase in inventory came in the older aircraft segment. As a result, values for 13-year-old and older aircraft decreased 4.4 percent during the quarter while values for 12-year-old and younger aircraft increased slightly, rising 0.8 percent.

The relatively strong values of younger aircraft compared to older aircraft were a return to pre-COVID-19 trends. In the earlier post-pandemic period, values of older aircraft outperformed younger aircraft as many buyers chose to acquire older aircraft during the peak of the market in the absence of alternatives. As the market normalized in 2023 and 2024, values of younger aircraft performed better.

It is worth noting that business jets are depreciating assets and a steady decline in the price of an aircraft over its lifespan is to be expected. The consensus among industry players is that supply and demand are well-balanced now and should support stable aircraft values in the near future.

\ CONCLUSION

In Q3 2024, the business jet market continued to normalize after the rapid growth of the post-pandemic period.

Flight operations slowed from all-time highs but stayed above pre-pandemic levels. Driven by an increase in new deliveries, transactions stabilized after a period of declines. As more aircraft were publicly listed for sale, the number of aircraft available for sale rose. The market, previously characterized by seller advantage and rising prices, shifted to a more balanced state with stable prices, especially for newer, more desirable aircraft. OEMs maintained high backlogs and long lead times. Consequently, the business jet market demonstrated resilience and is expected to stay active in the fourth quarter of 2024.

 

DID YOU KNOW AN OPERATING LEASE PROVIDES AN OWNERSHIP EXPERIENCE WITHOUT BEING IN THE FULL BUSINESS OF OWNING AN AIRCRAFT?

GLOBAL JET CAPITAL RECENT TRANSACTIONS

Global Jet Capital is a leader in the business jet financing market, providing leases and loans for both new and used aircraft. Our clients are diverse but all value flexible financing solutions for their aircraft. Below is a brief overview of a few recent transactions that Global Jet Capital has facilitated.

RECENT TRANSACTIONS

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RECENT TRANSACTIONS

This recent transaction highlighted the mix of tangible and intangible value Global Jet Capital can provide to clients as they source and finance business aircraft.

By providing the client with market insight and experience, we became a trusted partner as they navigated the complexity of sourcing and financing a pre-owned aircraft. During this process, Global Jet Capital developed a deep understanding of the client’s buying concept and ultimately won their business with a highly tailored solution featuring high LTV, a long-term length, a flexible high/low payment structure, and no AUM requirements.

 

AIRCRAFT CLASS
Ultra-Long Range

NEW/PRE-OWNED
Pre-Owned

REGION
APAC

FINANCIAL PRODUCT(S)
Finance Lease



RECENT TRANSACTIONS

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Jet-icon

RECENT TRANSACTIONS

This recent transaction exemplified how Global Jet Capital’s responsiveness and creativity can enhance our clients’ efforts to maximize their capital.

Needing to act quickly to secure a pre-owned aircraft that met their mission requirements, GJC swiftly approved this transaction allowing the client to proceed with the purchase. With the client based in one country, their assets invested in another, and the aircraft being purchased from a third, GJC leveraged our global reach, expertise, and creativity to facilitate this deal. Ultimately, we supported this client with a loan that required no assets under management and offered a high advance rate, which allowed the client to keep their high-yielding investments in place.

AIRCRAFT CLASS
Ultra-Long Range

NEW/PRE-OWNED
New

REGION
Americas

FINANCIAL PRODUCT(S)
Loan



RECENT TRANSACTIONS

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Jet-icon

RECENT TRANSACTIONS

Demonstrating the flexibility of an operating lease, Global Jet Capital extended the lease term of a long-time client’s aircraft.

By extending their lease, the client can continue to utilize their aircraft while keeping cash deployed in their business. The extension also provides the client with additional time to make a well-informed decision regarding a future aircraft acquisition.

 

 

AIRCRAFT CLASS
Ultra-Long Range

NEW/PRE-OWNED
Pre-Owned

REGION
Americas

FINANCIAL PRODUCT(S)
Operating Lease Extension

Notes

iOxford Economics, iiWells Fargo,  iiiWells Fargo,  ivWells Fargo,  vWells Fargo,  viWells Fargo,  viiWingX and Global Jet Capital Analysis,  viiiCompany financial reports. Note that Dassault does not report Q3 results and is not included in this report.,  ixJetNet and Global Jet Capital Analysis. Units are in parentheses.,  xAmstat and Global Jet Capital Analysis,  xiJetNet and Global Jet Capital Analysis,  xiiAircraft Bluebook and Global Jet Capital Analysis,

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