The rapid growth that characterized the business jet market during the post-COVID recovery has slowed in 2023. While the global economy has remained resilient, higher rates and increasing geopolitical volatility represent ongoing risks to macroeconomic conditions. Within the business jet industry, flight operations were down compared to 2022 (but higher than pre-COVID levels), inventory levels climbed but remained below historical averages, and transactions declined from recent high levels. Stable demand for business aviation along with high backlogs at major OEMs and relatively low inventory should enable the industry to weather any potential economic downturns in the foreseeable future.
- While the global economy remained resilient, headwinds to future growth continued to build in Q3 2023.
- Flight operations declined 3 percent year-over-year in Q3 2023 but were 14 percent above Q3 2019 levels, demonstrating sustained demand for business aviation.
- OEM backlogs increased and book-to-bill ratios remained above 1-to-1, placing OEMs in a position to weather economic downturns.
- Transactions declined in the first three months of 2023 due to slower-than-expected new deliveries (attributable to supply chain and labor issues) and price-driven inertia between buyers and sellers in the pre-owned market.
- As more sellers publicly listed their aircraft, business jet inventory levels increased in Q3 2023, although levels for the overall fleet remained below historical averages.
- Most aircraft models reverted to historical depreciation profiles in Q3 2023, albeit from a higher starting point following a firming in values over 2021-22.