A-Tradex Aviation News

Todd Tiahrt, U.S Congressman says that bill he introduced on Thursday is designed to boost general aviation sales.

This bill, called General  Aviation Jobs Act, is intended to lengthen current depreciation allowance for two more years, and cut the recovery time for noncommercial aircraft property from 5 to 3 years. The present depreciation tax provision will expire at the end of the year.

Tiahrt says that by lengthening the depreciation time this bill would anticipate promotion of the sales in general aviation industry, making business aircraft more affordable for buyers.

“With the aviation sector taking such a hard hit in recent months in Southcentral Kansas, Congress should pass this market-driven approach to stimulate our economy in Kansas,” said Tiahrt in his written statement.

The amount of pre-owned business aircraft, available for sale worldwide, has decreased down to 17.2 percent from 18 percent last month, as stated in this week’s report by Tinton Falls Amstat.

 Tom Benson, vice president of the corporate aviation research firm says: “When we examine the past several months worth of market data the trend does seem to indicate that it`s likely that we have seen the peak in terms of used business aircraft for sale.”

  Since 1990 this number has been about 12-13 percent in average, and in the period from late 2007 to early 2008  about 10 percent for jets and 8 percent for turboprops. This report also shows that worldwide business jet fleet resale transactions have increased from 0.6 to 0.8 per month for the last three month.

 Tom Benson said that these numbers can be considered a first signs of market stabilization, even though they may not represent the end of the recession on the market for pre-owned business aircraft.

The market for a pre-owned aircraft is showing a stable recovery, while the demand for a new aircraft is lagging, stated in a JPMorgan’s monthly business jet report issued earlier this week. The report shows that used aircraft inventories fell 50 basis points in September down to 13.6 percent of the aircraft being in service. This is a second consecutive decline and another evidence, that this market is past its worst times.
The prices for used aircraft declined 1.8 percent in September and will continue to decline in the next several months predicts JPMorgan. Though, it wouldn’t be a steady decline.
Prices fell 24 percent since last November, on average. David Nadol III, aerospace analyst at JPMorgan says that prices are expected to continue declining, until inventories, that are expanded now, will decline further.
Besides that, it is expected to have a noticeable margin between improvements in the used jet market in which inventories remain much higher than at last year’s cycle, and an increase in demand for a new aircraft. JPMorgan expects October’s NBAA Convention to be smaller than in a past several years, because of a slow order activity and no expectations for a launches of a new aircraft. However some optimism is present due to improving situation at the used jet market.