News

Used Private Jets sales distort market for manufacturers

As of late, the market has been flooded by second hand private jets from individuals and companies, looking to discard these symbols of executive privilege.

The influx of pre-owned planes for sale is wreaking havoc for manufacturers, like Bombardier Inc., Cessna Aircraft Co., and Gulfstream, which are already suffering from fewer orders, deferrals, and cancellations.

Now, they also have to compete against the pre-owned market. This pushes their prices down, making it hard for manufacturers to find reasonable deals.

Cessna Aircraft Co. said that it will begin to offer money-back guarantees on selected used Citation models, where the manufacturer promises to buy back the used jets in two years at the same price that they were sold to the owner.

“It’s a hell of a deal,” mentioned Rob Malik, head of Cessna Sales in Canada. “We’re calling the market bottom and taking all the risk out of it.”

The idea is to get owners to wait until prices bottom out to buy, explained Malik. He said that most who buy the jets will keep them.

Bombardier is currently working out a plan to offload its used planes. According to company spokespersons, the details will be made available to the public in the coming weeks.

In the past year, the number of used business jets available in the market increased by 6 percent to more than 16 percent. This statistic equals thousands of planes.

Source: The Vancouver Sun