Used Aircraft Market Indicates a Comeback

There are many indicators of how the North American general aviation market is doing — and we've certainly had enough up and down cycles to hone our view. Over the years, sales of used aircraft have been one of the surest measures of the industry's overall health. So a snapshot of one month's sales, year over year, is worth a look. For January 2010, used jets and turboprops showed an optimistic uptick. For jets, numbers were better in all but the heavy category (down slightly to 24 sales from 26 in January 2009). Light and Medium jets showed improved sales — to 40 and 31 respectively — compared with last year's 33 light jets and only 11 medium jets. Of course, both sets of numbers are anemic compared with 2007 and especially the high-water period for January sales, 2008 in which 60 light jets, 48 medium jets and 32 heavy jets were sold. It wasn't until late in the year that everything went south. But the improvements over last year for January sales are real and encouraging. Perhaps the most interesting numbers are those for medium jets and turboprops. They show the most precipitous tailspin from 2008 to 2009 (from 48 to 11), but also the steady comeback (up to 31 in January this year). In fact, the numbers roughly mirror the Dow — which sank to lows in the mid six thousands from highs topping 14,000; and have since rebounded better than halfway to flirting with 11,000 this week. Whether that means we can expect another peak in the foreseeable future remains — somewhere in the foreseeable future. And I'd be hard pressed to rely on sales figures for used aircraft to gauge investments on Wall Street. But the reverse has shown itself to be pretty reliably true. Airplanes run on money, and when money is scarce, people don't buy. When cash starts to flow, so does Jet A. Not exactly deep insight, but an interesting parallel nonetheless.