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Used Aircraft Sales

The news is slowly getting better in the world of used aircraft sales. That's good for an industry which has seen the bottom fall out since the financial crisis first hit a few years ago. New plane manufacturers have seen pretty steep declines, and that trend looks to continue, but sales of used aircraft have been picking up since spring. Several factors may be in play here, some of which we'll discuss in the next few paragraphs.

One of the most noticeable trends in the first half of 2010 is a significant increase in used aircraft sales activity among countries like Brazil, China, India, and Russia. Buyers from these countries are not afraid to acquire used aircraft and are willing to pay the asking price without bickering. Compare that to American and European buyers who always seem to be simply looking for the best deal. Either way, someone is buying the used planes.

Older models continue to lose ground, especially ones that are out of production, yet later models are seeing sales increases. According to recent Vref Jet Market Indices, jets manufactured before 1993 continue to lose ground in all classes; light jets, mid-size, and heavy jets all down between 3% and 5%. But the good news is that planes like Bombardier's Global 5000 series and the Gulfstream G550s are gaining ground.

One of the more surprising statistics in recent used aircraft sales is in regards to the usually strong Cessna Citation line. Citations are traditionally among the best sellers, both new and used, but not so right now. Sales on the Is, IIs, and IIs are flat at best, and the Bravos, Xs, IVs, and Vs are only seeing slight increases in sales.

What the trends seem to indicate is that while used aircraft sales are starting to see recovery, inventory is an important factor. Dealers can't seem to find homes for their older jets no matter how well they are marketed and priced. That could be due to an economically cautious business climate that makes buyer fearful of repair and upgrade costs. Of course, there's also the mentality that if we're going to spend limited resources on a jet this year, let's get something new and more reliable even if it is a bit smaller.

What all this means for the remainder of 2010 and into the New Year, no one really knows. We are still locked in a recession driven economy where fortunes can turn on a dime. If I was a dealer specializing in used aircraft sales my attention would be squarely aimed on marketing my inventory to buyers in the previously mentioned four countries. I would also look to government entities like the U.N. who might need additional aircraft but are strapped for cash.

It seems as though the European and American business sector is choosing to sit this one out. Unfortunately, no one knows for how long. But I suppose as long as the dealers are selling and sales numbers are up, we really don't have much to complain about.

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