Asia’s Influence in the Private Aircraft Market

Industry analysts project $40 billion of private aircraft sales coming from the Asian market over the next 10 years. So what does this increased demand mean for both new and pre-owned aircraft industry?

It’s important to note that the current status of the global private aircraft market is not necessarily an indicator of where it’s headed. In terms of inventory, North America currently rules the air, maintaining 40 percent of the world’s private jet fleet, while Asia holds only 5 percent.

There are a number of reasons why Asia has lagged behind in private aircraft adoption. Private jet ownership was outlawed in China as recently as 2003. Plus, the West has already overcome many of the hurdles that Asian countries currently face like steep airport taxes and insufficient airport infrastructure. However, there’s evidence to suggest that Asian governments are working hard to correct these issues, paving the way for increased sales over the next two decades.

A shift in demand

Burgeoning economies in countries like China, Indonesia, Singapore and Malaysia were comparatively unaffected by recent economic recession from which Europe is still reeling. In addition, many U.S. companies are still hesitant to splurge on private aircraft until their balance sheets show further improvement.

Demand from Asia is helping to offset some of the negative news found elsewhere in the world, contributing to an overall positive industry outlook in the months ahead. Most analysts agree that the next 10 years of private aviation sales will be dominated by the surge in demand from Asia.

A new plane today is a great deal tomorrow

Buyers from Asian countries overwhelmingly prefer new aircraft. Peering ahead a few years, those jets will become available for sale in the pre-owned space, creating plenty of aircraft inventory with attractive pricing options for savvy buyers.

In a previous blog,  we reported that in January 2012, a number of key measurements including available inventory, price, days to sale, and number of transactions indicated the shift to a seller’s market.

With the first quarter of 2012 just drawing to a close, it may be too soon to start high-fiving just yet. However, with the Asian demand for aircraft showing no sign of slowing, there are a number of positive indicators to suggest that a seller’s market is upon us.

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