The last three years have provided owners of Citations with a whirlwind of a ride. Not the kind of ride we enjoy when we experience our first takeoff in our new Citation and get that push back into the seat, nor the kind of ride we experience when caught barely hanging onto the yoke in severe turbulence.
I’m talking about the ups and downs of the value of our aircraft.
In my view, there are three types of value – the obvious value that your Citation brings to your life, the value the property tax assessor places on your aircraft, and the value you gain when it comes time to sell your Citation and move to your next one. The first is indisputable – business aviation allows us to be THERE – at the meeting with a client and at the special event for our family – without missing a beat. The actual numeric value of your aircraft in the preowned marketplace is a bit trickier to nail down, especially in a transitioning market. Knowing this number can not only help you with tax assessments but also ensure your hull is adequately insured.
March 2020 upended preowned aircraft values. In the 3-4 months that followed, some buyers found astounding opportunities as some sellers could no longer visualize the future use of their aircraft. As the realities of travel and the service difficulties of airline travel became more apparent, buyers turned to business aviation in droves, either through charter, jet cards/membership programs or aircraft ownership. An unprecedented number of first-time jet buyers entered the room and suddenly the combination of low interest rates, bonus depreciation, pandemic effects and unreliable airline service resulted in the highest number of annual transactions and the lowest preowned Citation inventory we’ve ever seen.
Now here we are in the middle of 2023. Inventory in some preowned markets has risen substantially, while inventories in other markets have increased in a more moderate fashion.
Here is the data for a sampling of Citation aircraft models comparing the average percentage of the fleet that became available for sale in the six-month period ending April 2023 to the current data as of May 5;
Another data point we track to read the tea leaves is the number of days on market. We define days on market as the number of days between the aircraft being listed publicly (on a website, for example) to the day the aircraft changes ownership.
This “days on market” datapoint can be an early indicator of change in the percentage of fleet for sale, or it can appear to conflict with existing fleet for sale data, as shown with the Citation M2 and Encore market data below. The recency of the increase in aircraft being brought to market will skew the days on market average. The Citation M2 and Encore have both seen a recent increase in the number of aircraft for sale, thus, the fleet average days on market is lower than historical days on market data.
Here is the data for the same sampling of Citation aircraft models comparing the average days on market for aircraft available for sale in the six-month period ending April 2023 to the current data as of May 5;
How does this help you, as a Citation owner?
If you watch the preowned sales market for your current aircraft model and for your desired aircraft model, the data could help you time a potential move. For example, if you are a CJ3+ owner feeling like the aircraft is too much for your current travel requirements, you’ll see that your fleet market is in very high demand and that the Citation M2 (a great step-down aircraft) market has a plethora of choices to choose from. This could be your sell high, buy low moment.
Overall, we feel that there will continue to be a steady increase in the inventory of preowned Citations for sale, bringing us closer to a healthy, balanced market of sellers and buyers. Potential headwinds from distressed large fleet operators of Citations could influence available inventory, and the rising costs of operating these aircraft could drive some of the uninitiated, first time buyers we’ve seen over the past few years out of ownership.
If reading the graphs isn’t your cup of tea, contact us at The Jet Agent and we will provide a complimentary valuation of your Citation. We are here to help provide free data and support any questions you may have about what’s happening in the Citation preowned aircraft markets.