MONTREAL (Reuters) - The market for higher-end, pre-owned business jets is beginning to favor sellers, after years where buyers had the upper hand because of elevated supply, Bombardier Inc’s (BBDb.TO) chief financial officer said on Thursday.
“You’re starting to see that turn into being a bit of a sellers’ market on the used side, for good aircraft anyway,” CFO John Di Bert told the Barclays industrial conference in Miami. “That absorbs a lot of demand that was out there.”
The supply of pre-owned aircraft, which ballooned after the 2008 financial crash, has limited demand for new jets in recent years, with deliveries of new planes seen staying flat until 2019, forecasters said in October.
But business jet makers are seeing even fewer choices of pre-owned aircraft available to buyers which they expect will boost demand for new corporate aircraft.
In 2017, business jet deliveries grew by 1.3 percent, rising from 667 to 676 units, according to figures released this week from the General Aviation Manufacturers Association (GAMA).
Canadian plane-and-train-maker Bombardier, one of the world’s largest makers of business jets, previously had $500 million in used aircraft inventory, which it takes as trade-ins from customers.
The company is now “fully sold out,” Di Bert said.
A spokeswoman for Gulfstream Aerospace, a Bombardier rival and a division of General Dynamics Corp (GD.N), was not immediately available to comment.
Bombardier Chief Executive Alain Bellemare also told the conference he expects rising interest from the United States, Russia, China and the Middle East to boost demand for top-end business jets above the current market of about “60-ish” jets a year.
Bombardier’s ultra-long-range Global 7000 is expected to enter service later this year, challenging the Gulfstream 650, which is currently alone at the high end of the market.
Bellemare said the company would wait for the Global 7000 to enter service before deciding whether to go ahead with its sister business jet, the Global 8000.
Reporting by Allison Lampert, editing by G Crosse