You’re reading the 7th issue of Biz Jet Buzz, the business aviation newsletter that packs more value than a Costco shopping cart.

Get smarter about the business jet market and enjoy the process.

This takes 10 mins to read. Chillax and enjoy the following:

• 👴🏻 Are you planning for your jets retirement? You’ve 3 options.

• 🪦 How many jets fly to the desert graveyard every year?

• 🧭 Biz Jet Buzz Market Index - One word: Zen 🧘🏼‍♂️

• 📊 Jet Market Monday: Challenger 650 | Phenom 300 | Legacy 600 | Global Express

• 🗞️ News: Expect to see more seaplanes

• 🍂 AI Jet of the Month - Winter is coming!

New here? Subscribe for free.

If you’re observing the market data closely, you’ll notice the number of light jets for sale has dropped since last month. It hasn’t actually. I have recategorised the Excel, XLS and XLS+ to ‘Medium’.

As I said last month, jet categorisation is not an exact science.

I’m therefore interested in your opinion…

Planning For Your (🛩️) Retirement?

A robot born today should be concerned about his future. Degradation of his components and advances in technology will soon render him/her/it obsolete.

But unlike humans, machines have a saving grace. They can continuously upgrade their components, update their software and paint their exteriors, extending their lives perpetually.

Don’t get too smug Bender. One day a shinier robot will come knocking at your owners door.

Confidently equipped with the latest tech, he’ll explain that he can be bought for less than the cost of maintaining that old rust bucket. Goodbye Bender!

The same goes for aircraft. Values hold until there’s another aircraft more valuable you can buy for less.

The economic life of a jet is around 20-30 years. This range in age is dependent on many variables. Some within your control, but most outside.

Stop maintaining your aircraft and watch the value plummet. You control this.

But you can’t control advances in technology, part obsolescence or changes in regulation. Nor can you control supply levels from the manufacturers. Supply at the top results in cascading depreciation for everything in service.

Eventually your jet will reach the end of it’s economic life, at which point it’s faith lies in one of the following:

1. Part-Out - An industry in itself. Part-out companies make smart purchases based on the sum of the value of the individual parts. The aircraft may fetch $2mil on the pre-owned market but if I take it apart I can sell all the parts for $4mil. Companies who operate and maintain large fleets of a certain types will also consider buying these models to cannibalize for spares.

2. Remanufacture: This is where a company sees value in the bones of older aircraft and designs a program to upgrade/remanufacture it with the latest engines and avionics bringing the jet into the modern age. Nextant Aerospace is the best example of this. They take old Beechjet/Hawker 400s and turn them into ‘Nextant 400XTs’. They also have a remanufacture program for Challenger 604s turning them into a ‘604XT’.

3. Storage: It simply goes into storage. There are thousands of airplanes parked in the Mohave desert. Most will never be touched again but maybe some will be bought for the parts, to be remanufactured or to be turned it into a home or an RV…

Now you know what happens when a jet reaches the age of retirement.

And I’m guessing you want to know the important bit? - The numbers Colin! Get to the numbers!

How many retirees do we have every year? How many end up parked in the desert? How many opportunities do you get to snag an old jet and build your RV?

These numbers help us understand how fast the world’s fleet of business jets is growing.

The original equipment manufactures (OEMs) deliver approx. 700 jets a year. You should be an expert on this from reading: New Jets - How many do the Gods produce every year?

So, we know how many jets deliver every year but how many retire?

Last year the fleet grew by a net of 450 jets.

The shape of the above curve is what we should expect. Jet demand was incredibly strong in 2021. This resulted in a buying spree, a huge drop in available inventory and a corresponding boost in residual values. This led to more investment in older machines and therefore less retirees.

The market has now found its balance so we should expect the number of retirements to increase in the coming years.

To come back to what I said earlier, there are many variables that influence when an aircraft is parked for good. Jet demand being just one.

The experts on this are the analysts in part-out companies. They can tell you exactly when the sum of the individual parts is worth more than the jets market value.

Alasdair White of Corporate Jet investor wrote a great article on this. I suggest you read it - Don’t Go Breaking My Part.

Another consideration is emotion. There is a lot of truth to the saying ‘Love’s a Drug’ - Emotion completely screws up human rationale.

If you’re emotionally attached to your old jet, you can fly it forever. It will become more and more expensive to maintain and you might have to start making your own parts, but it’s possible.

If you really love Bender the Robot you don’t have to part ways.

You can live the buzz together, forever and ever…🐝

Colin

I'm Colin, I help jet owners and corporates upgrade, sell or find the perfect jet as part of a global team of aviation experts.

Equally important. If you’re not enjoying this please consider unsubscribing. The button’s at the bottom. No hard feelings.

Biz Jet Buzz Market Index

I’ve distilled the last 40 years of jet market data into a easy to understand index. It’s the heartbeat of the market.

Who has more power in negotiations - Jet Buyers or Sellers?

The index reveals all, but this juicy stuff is for subscribers only.