Used Business Jet Market Hurting New Business Jet Sales?

I had a chance to catch up on some of my reading this week on what is happening in the market and I found an interesting snippet at AINOnline:

“Elevated used inventory, attractive used pricing and macro uncertainty continue to hold down demand for new business jets,” JPMorgan Equity Research noted in its latest business jet monthly report, issued this morning. “As a result, OEMs are eating further into their backlogs, and if these don’t stabilize in the coming quarters, further [production] rate cuts seem likely.

This is obviously not good news for those that are producing new jets, but those that have inventory in used jets it means now is a good opportunity to make a push for sales with those jets they have.  The report goes on to state:

As for pre-owned jets, JPMorgan said used inventory of in-production models edged up to 11.8 percent in August versus 11.6 percent in July, with all categories showing increased inventories.

“We believe this increase is a bump in the road and expect that inventories…will continue to decline gradually,” it added. Meanwhile, average asking prices for pre-owned jets increased 1.3 percent in August, reaching $11.4 million.

It seems that used inventories will be reduced which is good news for all.  When those inventories are reduced the new jets coming into production will also increase.

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