06 Jul Private Jet Shortage Lifts Increase in Sales
The pandemic is squarely in the rearview in the minds of many, and while the fight continues, COVID is largely under control…but the after effects of the pandemic are not.
Industries across the globe are still dealing with the aftermath, many of which are still experiencing shortages as surging demand quickly outpaces production and inventory.
Last year, many industries winded down production, the private jet industry included. With planes grounded and air travel restrictions at an all-time high, increasing inventory wasn’t a priority. In many cases, production not only slowed, but ground to a virtual halt.
Multiple Catalysts Creates Challenges for the Industry
The supply of second-hand jets is at an all-time low, but more than double the amount of first-time buyers are entering the market. This one-two punch is being exacerbated by current jet owners ‘HODLing’ or ‘holding’ their assets hoping to sell at the peak to desperate buyers willing to pay over market price just to get their hands on a jet.
In fact, according to the International Aircraft Dealers Association (IADA), only about 5% or (1,130) of the world’s private jet fleet is up for sale.
To put that in perspective, at any given time an average of 17% of the world’s private jet inventory is typically for sale on the open market. At an abysmal 5%, we’re talking about less than half of the typical inventory up for grabs.
Adding insult to injury, according to AMSTAT, a business dedicated to providing data on private business aircrafts in the USA, out of the available “252 large, long-range jets currently for sale, just 20 of these are less than five years old”.
Those jets more than 5 years old may need additional upkeep, maintenance and repairs, and are not necessarily ready for flight.
Buyers Turning to International Markets
With the US inventory scraping the bottom of the barrel, buyers are turning to international markets to satisfy their lust for traveling the skies amid their own luxury jet. Buyers are at a crossroads, often sacrificing the ‘best’ options and ideal makes/models and customizations for ‘whatever is available, wherever it is available.’
According to some sources, private jets are literally selling within hours of being listed on the market, leaving buyers to make impulsive fast-paced decisions with less due diligence. In other cases, bidding wars are heated, with prices far outpacing typical market value.
Manufacturers are Scrambling
Unprecedented demand has sent manufacturers scrambling to catch up. However, given the complexity of aircraft parts and production, this transition from a near standstill to hyperdrive hasn’t been an easy one.
Despite accelerated production on the front lines, some estimates expect that it will take between 6-9 months for the supply chain to reach an optimal pace. Until then, buyers are stuck with whatever they can uncover on the used/pre-owned market.
Current Owners are HOLDing
Supply and demand is in full swing in the private jet industry, with current owners knowing they have their hands on a golden ticket as it were.
HODLing (holding an asset in anticipation of its rise in value) isn’t just exclusive to the cryptocurrency market anymore. Those in possession of private jets are hesitant to sell and are seeing green as prices and demand increase. It is truly a seller’s market, with buyers at the beck and call of those in possession of this increasingly rare commodity.
As production slowly trickles towards normality, we would expect some of these ‘HODLers’ to loosen the reigns on their assets and look to capitalize on a sale near peak prices.
Raised Awareness Is Also Driving Up Prices
The 2021 global pandemic shone a bright light on the underbelly of public health hazards and the potential for commercial airlines and governments to restrict mobility.
Never before has the public been so keenly aware of the need for a flexible, secure, and safe flying experience that they can control. Flying private greatly reduces human contact with large crowds, and exposure to potential pathogens. Affluent health-conscious individuals are ready to pay whatever it takes to keep themselves and their families safe.
Similarly, those who have had their business impacted by restricted travel have felt first-hand the consequences of not being in control of their travel plans.
This has introduced private jets to a market base that had perhaps never before considered owning a jet of their own.
Private Jet Charters: a thriving alternative
While access to purchasing a private jet outright is currently limited, those companies offering private jet charter services are thriving.
BitLux, for example, has experienced an exponential increase in demand from those looking to take advantage of the safety, security, reliability and amenities of private jet travel.
Until inventory becomes more readily available, those interested in flying private can do so by chartering a flight, enabling them to take advantage of everything a private jet experience has to offer, without the high price tag.
For some, jet chartering is the ideal alternative for the current shortage, and an attractive proposition vs. paying above market price for a used jet amid today’s feverish buying frenzy.
BitLux Private Jet Charters
Eager to better serve its diverse clientele, BitLux has remained on the forefront of the private jet industry, anticipating production challenges and adjusting its operations to serve the windfall of new customers.
Known for staying on the bleeding edge of technology and offering exceptional service, BitLux was among the first to accept cryptocurrency as a payment method, serving the massive influx of newly minted millionaires from the crypto-boom and offering a safe, fast, secure, private and reliable way to pay for private jet charters.
Similarly, BitLux has gone to great lengths to serve the growing number of clients unable to purchase a jet but who still wish to enjoy the multitude of perks private flights offer.
Those with questions about BitLux or its private jet chartering services are encouraged to reach out and connect with a specialist who can help plan the perfect trip. From takeoff to landing, travel with BitLux is an experience to be remembered.