You’re reading the the 3rd issue of Biz Jet Buzz, the business aviation newsletter that educates and entertains in equal doses.

Get smarter about the business jet market and enjoy the process. What’s not to like?

Here’s what I’ve got for you:

• 🛩️ Jet demand - Where we headed?

• 🤡 Why most predictions are a joke!

• 📊 Jet Market Monday: CJ1+ | CJ2 | CJ2+ | Citation M2

• 🗞️ Biz Av News - Dassault want in on fractional?

• 🗻 AI Jet of the Month - First men up Everest.

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If this is your first time reading, I’ve good and bad news for you.

The good news is you’re going to really enjoy this on the first Saturday of the month.

The bad news is you’re falling behind the class.

You must immediately spend 8 minutes reading the last issue of Biz Jet Buzz.

Why?

1. You’ll be more knowledgeable,

2. You’ll enjoy this one more,

3. And…..you’ll have great chat at your next dinner party.

“Oh, such a gentleman. A real buzz about him! And so in-the-know about the business jet market, in particular how many jets are produced by the manufacturers every year. Very impressive! Make sure to invite him to our July 4th bash darling. I’m inviting Sofia. They’ll really hit it off” 

Man in demand! The power of a free newsletter.

READ: New Jets - How many do the Gods produce every year?

Now that you’ve read it, you know how easy it is to predict the number of new jets that’ll be delivered each year.

With Supply relatively constant and consistent, it’s leaves only Demand that can impact jet values.

Jet values rose in 2021 for the first time in 20 years. This wasn’t because of a sudden lack of supply from the manufacturers. This was demand. Unprecedented demand. Demand that stuffed the manufacturers order books and ripped through pre-owned jet inventories until there was nothing left.

In this issue of Biz Jet Buzz we’re going to get our heads around just that - Jet Demand. Where it is now, where it’s been and where it’s going?

Long term this is easy. Short term, the market's ups and downs are next to impossible to predict.

Too many variables and the fact that us humans are just bad predictors.

Read two of my favourite books and you’ll never believe another prediction again, including whatever I’m about to say about the jet market.

The first is ‘Thinking Fast and Slow’ by Daniel Kahneman - The Nobel prize winning psychologist explains that our brains work in two modes.

System 1 ‘lazy mode’ and System 2, where you’re actually doing some original thinking (and burning more calories).

We all default to lazy. Hunting on the Serengeti didn’t always produce a meal, so burning less energy meant a higher chance of survival. Our brains burn 20% of our energy and have all sorts of clever tricks to save energy.

The problem with these tricks is that they rely on emotion and intuition (good or bad). Your logic then falls foul to countless cognitive biases. We’ve all made bad decisions in ‘lazy mode’. You might think your prediction is solid but most of us are blind to our own bias.

The second book is ‘The Black Swan’ by Nassim Nicholas Taleb. His writing style is not for everyone but his ideas are top notch. To summarize: Be wary of over confidence in predictions and always expect the unexpected - a Black Swan.

Now that I’ve completely discredited all predictions, let’s predict where the jet demand is headed.

Jet demand is rising as fast as the world’s wealth.

Forbes recently published their 38th Annual World’s Billionaires List. In the last 10 years, the number of billionaires has nearly doubled! We are the richest humans to ever live on this planet.

Where there’s wealth, there’s jets.

Straight line growth rarely exists, despite what Wall Street wants to believe. Every market is subject to volatility.

The jet market is no different. Some years it’s up, some years it’s down. These ups and downs are closely correlated to that of the economy.

When people lose jobs, so do airplanes.

Where the jet market is going?… The question is where’s the economy going?

Last week I attended a great event in New Orleans organized by PNC Aviation Finance. (Thank you PNC!). Their Chief Economist gave us the low down on where the economy is and where it’s headed.

The US has achieved a soft landing following the pandemic boom. We like soft landings.

The Fed interest rate hikes since March 2022 seemed to have done the trick in taming inflation back down closer to the 2% target. See Figure 3.5.

So much so, that the expectation is for the Fed to lower the rate, possibly before the end of the year.

That’s a positive outlook…right?

It’s a positive until it’s not. When that might be, we just don’t know.

There is always a Black Swan lurking in the shadows. But we can’t live life constantly worrying about Black Swans, White Crows or Pink Flamingoes.

Life is short. Buy a jet and live the buzz! 🐝

Thanks for reading.

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.

If you’re enjoying this, pay me back by forwarding to a friend or colleague.

Market Commentary

The pre-owned jet market today is balanced with 7.2% of the total fleet for sale.

The increase in inventory (jets on the market) seems to have leveled off. Could this mean we have reached a market equilibrium?

Note in the Medium Jet category there has been more transactions in the last 6 months compared to the same 6 months last year. That is contrary to what many think right now.

Market doomsdayers can suffer from confirmation bias, wanting to believe that the market is weaker than it is.

Only looking at the increase inventory would confirm this belief. But you must look at the number of aircraft trading to get a complete picture.

If you don’t understand the proven concepts on bias detailed in ‘Thinking Fast and Slow’, are you really in control of your mind? Read the Book!

Jet Market Monday

Need more detail on a specific jet market? Here’s the last four week’s of Jet Market Monday.

Your jet not here? Get in touch and I’ll bring you up to speed.

AI Jet of the Month

Three days ago (May 29th) in 1953, Edmund Hillary and Tenzing Norgay became the first climbers to successfully surmount Mount Everest, the highest mountain in the world at 8,849 metres.

Need to Know Biz Av News

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DISCLAIMER: This newsletter is strictly educational and not advice for investment or financial decisions. Any and all opinions herein are the personal opinions of the author, Colin Dunne, unless stated otherwise.