The G-450 Market
The increase in activity we started seeing in July seems to be continuing for the time being. I experienced a late summer lull in phone calls in early August, but it started ringing again last week. I have been surprised by just how strong the interest has been in some of our listings including an early model G-III and a G-IVSP. Despite what it might feel like to some aircraft owners, there does seem to be a price point on almost all of these aircraft that generates a strong response from potential buyers. I think some markets just haven’t met that price point yet.
One market that has experienced pretty steady sales activity since early spring is the G-450 market. Over the last six months, there has been one or two retail transactions on 450’s each month and supply levels have dropped noticeably from their peak in March of twenty aircraft for sale to only fourteen today. Of those fourteen aircraft for sale, three have accepted letters of intent recently and there appears to be five or six other retail buyers currently making offers. If all three of those aircraft that are currently under letter of intent close and a couple of these other buyers secure aircraft, the landscape in this market could look very different in a few weeks.
As I’ve said before, most markets (including the G-450 market) may appear to be flooded with inventory, but as you start talking to the agents about owner price expectations you discover that a great many of the aircraft listed are not priced realistically. When you narrow the field to aircraft actually priced to market, the number of aircraft for sale can be cut in half pretty quickly. In the 450 market I would say only four or five of the aircraft for sale have those realistic expectations. With four or five buyers making a run at various aircraft, it sounds like supply and demand are not very far out of alignment.
The only catch is that the G-450 is not the only option for buyers looking for a long range aircraft in the $22 - $30M price range. There are currently 49 Challenger 604’s, 17 Falcon 900EX’s, 14 G-V’s & 24 Global Express aircraft for sale. I do not think buyers are willing to consider paying a higher price for an aircraft today than the last guy paid. If the supply of aircraft in the 450 market gets tight and all the sellers hold firm at higher prices, I think buyers will simply look to other comparable markets. Because of this large supply of various models of aircraft, I do not think anyone should be talking about price increases in any markets for some time to come.
That being said, if you want a good G-450 at today’s low prices, availability is somewhat limited. If a 604 or 900EX will do the job for your department just as well as a 450, you can probably afford to stay on the sidelines for now, though I wouldn’t expect to realize additional cost savings by doing so.
I will take this opportunity to make a shameless plug for G-450 serial number 4044 that we are currently representing. This is one of those four or five aircraft that are priced right. If you would like more details on this aircraft, please feel free to visit our website at www.jba.aero, or give me a call.
Toby J. Smith
JBA Aviation, Inc.