Matt Thurber, editor-in-chief at AIN Media Group, has been flying since 1975 and writing about aviation since 1978 and now has the best job in the world, running editorial operations for Aviation International News, Business Jet Traveler, and FutureFlight.aero. In addition to working as an A&amp;P mechanic on everything from Piper Cubs to turboprops, Matt taught flying at his father’s flight school in Plymouth, Mass., in the early 1980s, flew for an aircraft owner/pilot, and for two summer seasons hunted swordfish near the George’s Banks off the East Coast from a Piper Super Cub. An ATP certificated fixed-wing pilot and CFII and commercial helicopter pilot, Matt is type-rated in the Citation 500 and Gulfstream V/550. Based in the Pacific Northwest, Matt and his team cover the entire aviation scene including business aircraft, helicopters, avionics, safety, manufacturing, charter, fractionals, technology, air transport, advanced air mobility, defense, and other subjects of interest to AIN, BJT, and FutureFlight readers.

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Matt Thurber

The business aviation industry finished last year on a mainly positive note, according to&nbsp;Global Jet Capital (GJC), which remains broadly optimistic about prospects for 2024 in its latest assessment of the market. However, according to the finance and leasing group's just published&nbsp;Q4 Business Aviation Market Brief, 2023 did not measure up to&nbsp;the rapid expansion that took place in 2021 and 2022, as “flight operations and transactions declined while inventory increased and values softened.”&nbsp;
During the fourth quarter of last year, GJC reported business aircraft flight operations declining by 0.9 percent year over year. That said, while operations were lower in the U.S. and Europe, elsewhere they climbed, "demonstrating strong global demand for business aviation.” Those numbers, however, are still higher than pre-Covid levels, up 17 percent compared with the fourth quarter of 2019 and up 15.1 percent for 2023 compared with full-year 2019.&nbsp;
“It was widely expected that many of the new users of business aviation would return to commercial airlines as the world normalized,” the company said. “However, 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 2023, demonstrating a systemic expansion of the user base.”
On the manufacturing side, compared with the fourth quarter of 2022, OEM backlogs were up 1.7 percent in the final quarter of 2023, reaching $41 billion (not including Dassault and Embraer), according to GJC. While these were lower than the high levels seen in late 2021 and early 2022, they were in line with the last three months of 2022 and pre-Covid levels. "Stable orders and the inability to increase production&nbsp; [due to supply chain and labor problems] resulted in a book-to-bill ratio of 1-to-1 in Q4, and OEMs expect book-to-bill ratios to remain around 1-to-1 in 2024,” the report stated.
According to GJC, growth may slow in 2024, due to “wars in Ukraine and Israel, relatively high interest rates (despite plans by many central banks to reduce them in 2024), continued de-globalization and trade conflicts, major elections in countries making up 38.1 percent of global GDP, structural growth challenges in China, and disruptions in Europe...”
GJC believes that a soft landing for world economies is increasingly likely, “even as slow growth or a mild recession remains a possibility. Central banks are expected to shift their focus from rate increases to rate decreases&nbsp;and the job market remains tight,&nbsp;factors that will support economic stability in 2024.”
New and preowned sales numbers were down in 2023, and supply chain and labor issues held back some new aircraft production. “As a result, unit volume ticked up slightly, but not at the rate manufacturers planned, and dollar volume declined. While these constraints have lowered overall transaction volume, fewer new deliveries may help limit inventory growth and support healthier values for the market.”
GJC noted that preowned sales dropped because of a return to a more normal market. In part, this was due to sellers trying to keep prices at the higher post-Covid levels and buyers waiting for a return to “historical depreciation levels.” Higher interest rates also took a toll on demand.
The preowned market also saw more listings last year, which again signals a return to more normal levels. “Listings may continue to rise as new deliveries pick up in 2024 but should eventually stabilize,” GJC said. During the pandemic, preowned listings dropped, with many sales involving unlisted aircraft.&nbsp;
There should be a bump in new deliveries this year, especially when Gulfstream’s G700 receives FAA certification. "Heading into 2024, new deliveries may increase with the certification of new aircraft models while preowned transactions should remain largely stable as buyers and sellers continue to acclimate to a new market dynamic.”
At the end of 2023, preowned inventory was 6.9 of the total fleet, according to GJC, more than double the low point of 3.1 percent at the end of the first quarter of 2022, but still below average levels of around 10 to 11 percent over the last decade. "Older aircraft are losing their luster, and those older than 12 years reached 8.2 percent by the end of 2023," the report stated. "The younger-than-13-years-old fleet was 4.8 percent." GJC doesn’t expect inventory to “reach the historical average of 10 to 11 percent due to limited new deliveries from OEMs in 2024."
As for pricing, after two years of increases, average jet values dropped 0.2 percent in the fourth quarter of 2023 compared with a year earlier, GJC said. "As inventory increased, price negotiations between buyers and sellers became more balanced in 2023 than in 2021 and 2022,” the company observed. Reflecting the less desirable older aircraft, values dropped 2.9 percent for those 13 years and older and climbed 0.8 percent for those 12 years and younger in the fourth quarter of 2023.&nbsp;
“It’s worth noting,” GJC concluded, “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 a stable pricing environment will reemerge as supply and demand come into balance.”

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