Private-Jet Glut | Spurs ‘insane’ Bargains For Buyers
DALLAS: Corporate-jet makers are flooding the market, spurring deep discounts for new aircraft and fuelling a three-year slide in prices of used planes.
Most major manufacturers, including Gulfstream and Bombardier Inc, which is also contending with rising hurdles in its commercial-jet business, have slowed production in the last couple years as demand for private jets sagged. That still hasn’t been enough to halt declines in aircraft values, say consultants, brokers and analysts in the $18 billion industry.
Gone is the optimism stoked by the election of President Donald Trump, a corporate-jet maven with his own Boeing 757, along with hopes for speedy tax cuts that would bolster plane purchases. Instead, the news has been full of setbacks. US Health Secretary Tom Price resigned under fire for his frequent use of private planes at taxpayer expense. General Electric Co is selling off its corporate fleet to cut costs.
“The Trump bump is over,” said Janine Iannarelli, a Houston-based plane broker.
The jet glut is one reason pre-owned prices were down 16 per cent in August from a year earlier. With bargains aplenty on machines with few flight hours, manufacturers are cutting deals to entice buyers to purchase new planes. Meanwhile, they keep churning out aircraft and introducing new models.