“It’s been a brutal downturn for this industry, followed by dashed expectations for recovery,” said Richard Aboulafia, analyst at the Teal Group, the aviation-research firm based in Fairfax, Va. “But the features are in place for a recovery and I think we’re already starting to see some slow and steady progress.”
This year, there have been a total of 172 new jets sold in North America – a drop of more than 70 percent from the 658 new jets sold during the same period in 2008, according to JETNET, the Utica, N.Y.-based jet research firm. The volume of used planes sold is about on pace with 2008 and 2009, yet prices for used planes are still down by a third or more from their 2008 peaks.
Inventories of used planes remain high. The inventory of used business jets remains at 13.7 percent of the total fleet, according to JETNET, with jets taking an average or more than a year to sell. That’s down slightly from the 17 percent levels in 2008, but still above the 11 percent levels before the crisis. (Read more: A Peek Inside Boeing's New VIP Jet)
In its most recent industry report, JP Morgan said there are scant signs of an imminent bounce for private jets. While “corporate profit growth since the recession may have generated some pent-up demand, the outlook for slowing profit growth does not bode well,” according to the report.
Aboulafia said he doesn’t expect a recovery until 2016 or 2017.
The weak demand and prices has led to a radical restructuring in the private jet business, forcing all segments of the industry to conform to the new realities of flying private.