Despite UBS Global Research’s latest business jet market index being at a post-recession high of 53, business jet fundamentals such as used-aircraft inventory/pricing, and utilization numbers, remain “relatively weak,” according to UBS aerospace analysts David Strauss and Darryl Genovesi.
Pre-owned business jet inventory was 2 percent higher sequentially last month, the firm said, with 11 percent of the installed base on the market. However, this is still below the historical average of 13 percent. Inventory levels of very young inventory (zero to five years old) climbed 3 percent last month, representing 7 percent of the installed base—above the 5 percent mark that UBS considers to be “healthy levels.” Meanwhile, pre-owned inventory of young jets (six to 10 years old) stood at 10 percent last month—at the upper limit of UBS’s range for “healthy levels.”

Of the 153 aviation professionals surveyed by UBS, 40 percent indicated that pre-owned pricing had deteriorated, and 57 percent said it remained unchanged. only 3 percent said prices had increased. UBS said this result is worse than its prior survey, in which 31 percent said pricing fell and 67 percent said it was unchanged.

While seasonally adjusted business jet cycles were 40 percent above the 2009 trough in January, UBS estimates that per-aircraft utilization rates are just 1 percent higher when adjusted for fleet growth.