Marketing Moves

May 2, 2017 - 2:15 PM

If you’re selling a business jet today, you’re probably more willing to lower the price, fire your broker, or pull the aircraft off the market than you would have been five years ago—or even one or two. That’s one conclusion I’ve drawn from a review of sequential weekly preowned-market changes that were recorded over the last half decade.

These changes include purchases and new listings, which are closely watched as industry barometers. But a business jet may undergo several other changes along the route from “offered for sale” to “sold.” It may be repriced; the broker may be replaced; an asking price may be changed from a firm figure to “make offer,” or vice versa; or the aircraft may be withdrawn from the market altogether. Market-change data catalogs this information. 

I reviewed analogous weekly market-change reports from going back to 2013 (one per year, all from late February), looking for any correlation between market adjustments and subsequent preowned sales. For example: Would more price-adjustment activity or broker changes indicate sellers were more responsive to market demands, resulting in higher sales in the rest of the year? Or would such activity hint at efforts to prod uninterested buyers, with more changes correlated to fewer subsequent sales?

Frankly, I didn’t expect to uncover any connection (spoiler alert: I found none), but I did discover evidence of a growing proclivity to alter sales plans on the open market. In fact, in the weekly summaries, the percentage of changes that represent repricings, broker changes, and market withdrawals has climbed rather steadily. In the 2013 weekly summary, 56 percent of the aircraft with changes were listed because of adjustments, not because they had sold or were new to market. That percentage rose to 67 percent in 2014 and 77 percent in 2015; it declined a little to 68 percent in 2016, then jumped to 82 percent in 2017. 

As for links between these alterations and subsequent sales, in 2013 retail preowned transactions hit what was then an all-time record of 2,303 business jets, but the increase in adjustments seen in following years’ samples shows no correspondence with transaction totals. Yet it’s noteworthy that during this half decade, as preowned prices continued to defy owners’ hopes for stabilization, transaction specialists have stressed the need to be ahead of the market and price aggressively. 

Perhaps the adjustment activity illustrates that the message is getting through. 

Parsing the changes by aircraft manufacturer, Falcon owners evidence the most willingness to adjust their sales plans. Out of Falcons listed in the five weekly market change reports I reviewed, 85 percent were there because of price and/or broker changes and withdrawals from market. Also making such changes were the owners of 82 percent of the listed Gulfstreams, 81 percent of the listed Challengers, 73 percent of the listed Hawkers, 57 percent of the listed Learjets, 50 percent of the listed Globals, and 43 percent of the listed Citations.