The heyday of airplanes selling within hours after bidding wars may be behind us now, but that doesn't mean it is not still a seller's market.
The halfway mark of the year is always a good time to pause and take stock. While hot summer days may be upon us in full force, the aircraft sales market has officially cooled off. Yet rest assured, just because airplanes are not selling at record speeds for well over market value anymore, does not by any means imply that the market has crashed, nor that it is now a buyer's market. In fact, if you own a well equipped HondaJet with reasonably low time that has been properly maintained and cared for, your aircraft is likely still worth a good amount over what it would have been valued at prior to the market boom of 2021 & 2022. And better yet, your airplane is still capable of selling within the ballpark of its present market value, even despite the "Jet It Effect".
If you are hoping - or more importantly needing - to sell your HondaJet this year, your golden ticket will be to strategically position your aircraft on the market so that it stands out as the gem that it is, and does not get lost in the somewhat murky market. To accomplish this you will want to hire a knowledgeable and well-informed broker who is experienced with selling the HondaJet, and knows both the airplane and the pre-owned market very well.
By now I am sure you have heard of former HondaJet fractional operator Jet It's unfortunate and untimely demise, and have likely seen the effects of this collapse in the pre-owned market. At its height Jet It operated 21 HondaJets. With 7 presently on the market for sale and more coming soon, the Jet It Effect has undeniably distressed the HondaJet market in terms of percentage of the fleet for sale, as well as below market advertised prices. However the latter should not dictate a new normal for HondaJet values. And if you ask any reputable HondaJet sales expert, they will agree that it has not. In a much appreciated silver lining, buyers are refreshingly astute to the currently bifurcated HondaJet market. Or at least the intelligent buyers are, who have been property educated by knowledgable brokers.
Former Jet It HondaJets boast compelling below market prices. But they also come with their share of disadvantages, and savvy buyers are recognizing this. With their higher time, cabin wear and tear, Jet It liveries and downgraded FlightReady P2 program enrollment, these HondaJets are arguably a different caliber than the majority of the privately owned and operated HondaJet fleet. An informed buyer is capable of differentiating between the bargain deal to buy a 2 - 3 year old former Jet It HondaJet at a discounted price, versus purchasing a highly pedigreed and distinguished HondaJet at a current fair market value.
However be careful assuming every sales broker out there knows how to sell the differences. When you are evaluating your options of brokers who can best represent your valuable asset, it would be within your best interest to armor yourself with information. Knowledge is power, as they say. Consider commissioning an independent aircraft appraisal of your HondaJet to determine its ballpark market value, to include relevant data points supporting the valuation. Then compare your appraisal and its market intelligence to the responses you receive from the questions you pose to your prospective brokers. If the broker promises you an unrealistic sale price, they may not be as dialed into the present market as they should be. In the same regard, if the broker is attempting to convince you of a sale price that your own research determines to be far too low, they may be setting the stage - and subsequently your expectations - for a quick fire sale that benefits them more than it benefits you.
The unprecedented market boom of 2021 & 2022 created an undeniable seller's market. There were far more buyers than there were airplanes to buy. As a result, factory new inventory quickly sold out, pre-owned prices skyrocketed, and aircraft were appreciating on pretty much a monthly basis. There were immediate offers once an airplane hit the market, followed by bidding wars, and buyers were often forced to forgo basic necessity pre-buy inspections just to get an airplane before another buyer got to it first. The market was truly irrational, and entirely catered to the seller. These days we are seeing more airplanes on the market to choose from, and buyers are once again returning to normal by taking their time and doing their due diligence before pulling the trigger on an airplane. The frantic sales pace has slowed down, but in a healthy way, because the previous environment was unsustainable.
As we look on to the second half of the year, dealers are “cautiously optimistic” and expect an uptick in transactions over the next six months, according to the International Aircraft Dealers Association (IADA) Second Quarter 2023 Market Report. Pricing for preferred aircraft models with the right pedigree is “reasonably strong,” but overall, averages have resumed their normal depreciation of 7 to 9 percent annually, the report said. While that may lead to opportunities for value shoppers in the third quarter, some dealers predict market activity will “be back to a feverish pace” in the fourth quarter.
If you kicked off 2023 with the intention of selling your HondaJet this year, again rest assured the market has not completely fallen off of a cliff. The present sales environment arguably still strongly favors the seller. However faced with the aftermath of the Jet It Effect, it is now perhaps even more pivotal than ever before to secure your pristine HondaJet in the hands of the right seasoned broker who can property educate buyers to the compelling merits and distinctions of your unique HondaJet over all the others on the market.