Business jets in China are now a buyer’s market with no buyers
China’s business jet buyers are turning into sellers, and there are too many of them
Fred Tan has been looking to buy a second-hand private jet for more than a year now but is yet to make a deal.
Not because of a lack of choice. Options are aplenty and the prices keep falling. “I am waiting for prices to drop further,” said the Singaporean businessman with a chuckle. “No rush.”
China’s business jet buyers are turning into sellers, and there are too many of them. So the prices of the jets they are looking to sell are not expected to fly anytime soon.
Chinese business jet firms clutch one another as industry slows
“Prices have struggled, certainly,” said David Dixon, Asia president of aircraft broker Jetcraft. “Many factors are at play: oil and gas, natural resources like coal and mine are all down, US dollar is strengthening against other currencies, and politics in Brazil, Russia and China.”
The world’s total inventory of pre-owned business jets for sale have ballooned from US$5.2 billion in March 2014 to US$8.09 billion this February, according to Hong Kong-based consultancy Asian Sky Group. But the manufacturers aren’t selling that many new planes, suggesting the market is shrinking.
“The only thing selling planes now is price,” said Jay Mesinger, a US-based aircraft broker.
Unwanted jets in China – where the government’s austerity measures have been driving officials and businesspeople away from the conspicuous asset – are put in the market through brokers like Dixon and Mesinger and sold wherever the demand is stronger. The US, the world’s biggest business aviation market with a strengthening currency, stands out as the brightest spot.
