High demand, low supply leads to ‘red hot’ market for used GA aircraft

A new report from the International Aircraft Dealers Association (IADA) shows that aircraft dealers anticipate the market for used general aviation airplanes will remain red hot for the first six months of 2022, while inventory of available aircraft stays low.

IADA’s Fourth Quarter 2021 Market Report includes a summary of questionnaires about market perceptions sent to nearly 900 IADA members, including dealers, their brokers, and members who provide products and services related to aircraft transactions. According to association officials, IADA members average more than 700 transactions a year amounting to $6 billion.

According to the report, aircraft dealers accredited by IADA closed 20% more deals in 2021 than the year before: 1,372 aircraft transactions, compared to 1,135 deals in 2020. This was despite a shriveled aircraft inventory, with many airplanes never making it to market before being snatched up by buyers willing to pay top dollar, officials noted.

“Today’s market is incredibly unique and while aircraft transact quickly, that’s a result of factors which have not created an entirely positive environment for the resale space,” said Johnny Foster, president and CEO of IADA accredited dealer OGARAJETS. “We enjoyed a solid year, maybe our best, however, the market created an environment that was not nearly as positive for our buying clients. Values and prices are completely disconnected, supply is almost nil, and due diligence is limited by shop capacity and demand.”

The fourth quarter 2021 responses from IADA members predict the first six months of 2022 will continue to bring an increase in demand for all sectors of the used aircraft sales market, while supply shortfalls are projected to continue driving prices higher.

“Values have increased an average of 10% a month for the past three months. The rate of change feels unsustainable. However, absent an increase in supply or a dramatic drop in demand, appreciation will likely continue into 2022,” said IADA Chairman Emeritus Paul Kirby, who is also the executive vice president of QS Partners, another accredited dealer.

“I think we all have eager and ready buyers ready to strike with offers but with limited supply of preowned aircraft, values have gone to crazy numbers,” added Kyle Wagman, director of aircraft transactions and consulting for Leading Edge Aviation Services. “Who would have thought that an aircraft purchased new from an OEM less than three years ago can be sold in today’s market at a premium compared to what the owner paid for it?”

Todd Spangler, sales director of Jetcraft, a dealer covering Florida and Central and South America, summed up the feelings of many preowned brokers: “Buying activity is excellent. Inventory levels are a serious concern. The OEMs need to begin delivering new aircraft at higher volume in order to displace more aircraft into the marketplace.”

The IADA Market Report covers dealers’ perceptions about the market taken from the survey of IADA members, and actual sales data reported monthly by IADA dealers. However, it does not include preowned aircraft transactions conducted solely by IADA’s OEM members.

You can register to download the report for free at AircraftExchange.com/Market-Report.