The pre-owned business jet market is set for a slowdown, according to a forecast from aviation analyst Brian Foley. Using the so-called cross-impact forecasting technique, Foley envisions a marked drop in the number of aircraft transactions conducted annually through 2019—falling to just 1,800 from around 2,200 last year (according to Amstat data).
Still to be determined, says Foley, is whether this slowdown will thin pre-owned inventory and, by extension, cause a shift in the value of aircraft being offered for sale.
According to Foley, cross-impact forecasting draws on “a multitude of quantitative and qualitative inputs to estimate their collective effect.” He added thatin September 2008—at the advent of the financial crisis—this method allowed him to factor in the impact of rapidly declining equity and credit markets and predict the severe and lengthy business jet market downturn that followed.
Foley believes that in the future pre-owned sales can be predicted by cabin size and model. “If there’s enough interest from the industry, a syndicated study could be organized to develop a more detailed pre-owned forecast to share with those early participants,” he said. “In any event, preliminary groundwork suggests declining [sales] activity over the next five years.”