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By Youcef Berour Minarro, Principal Valuations Analyst, Cirium Ascend Consultancy

On the 29^th March 2024, after over a year of delay and with particular uncertainty over recent months, Gulfstream’s new G700 which sits in the Long Range business jet segment received its FAA type certification which marked a key milestone towards customer deliveries. This milestone also marks a revenue recovery for the parent company, General Dynamics which claimed the delays faced by the longer FAA certification process, following the Boeing 737 Max incident, resulted in a loss of $1 billion in revenues and $250 million in earnings for 2023.

Once delivered, the 10X will be Dassault’s largest and longest range aircraft, competing directly with Bombardier’s Global 7500 and Gulfstream G700

In addition to receiving certification, Gulfstream also announced performance improvements for the G700, namely the take-off and landing distances which are now shorter than originally planned. With this positive development for the G700, we think this makes a good excuse to look into how the Long Range business jet market as a whole is doing and what we should expect for 2024.

Other OEM developments

Following its FAA and EASA certifications in 2023, deliveries are now underway for Dassault’s Falcon 6X, two aircraft are now in service with production expected to ramp up this year. Cirium’s own new delivery forecast is predicting approximately 15 handovers this year before ramping up into 2025. Dassault’s in-development Falcon 10X which was originally scheduled for EIS in 2025, has now been delayed by two years to 2027, citing supply chain issues. Once delivered, the 10X will be Dassault’s largest and longest range aircraft, competing directly with Bombardier’s Global 7500 and Gulfstream G700.

Bombardier’s Global 8000 remains in-development having been re-launched in 2022 as a longer range variant of the Global 7500 (over 165 aircraft now in service). The 8000 is intended to replace the 7,700nm range 7500, which is certified up to Mach 0.925, and features the same fuselage/length. Performance gains will come from software updates on the GE Passport engines and optimisation of the empty weight allowing more fuel to be carried in the existing tanks. Bombardier is planning to offer a retrofit option to 7500 owners via a Service Bulletin (SB). The Global 8000 is expected to enter service in 2025.

The current in-service business jet fleet stands at over 23,000 aircraft, of which the Long Range segment accounts for almost 4,000 aircraft.

Fleet Size

The current in-service business jet fleet stands at over 23,000 aircraft, of which the Long Range segment accounts for almost 4,000 aircraft, or 17% of the whole business jet fleet. Aircraft in this segment typically feature over 5,000 nautical miles in range and are typically the flagship products for the various OEMs. The spread of OEMs in this segment is much more limited compared to the rest of the business jet fleet, the Long Range market is currently dominated by Gulfstream (49%), Bombardier Global family (28%) and Dassault (24%). The Gulfstream G550 is the most popular type in this segment, with 570 aircraft in service, followed closely by the tri-jet Falcon 900 family with 529 aircraft in service.

Inventory and Liquidity

Based on publicly listed availability, over a 12-month period in 2023, our analysis suggests that total inventory levels for Long Range business jet aircraft increased significantly in 2023 compared to 2022. At the beginning of 2023, there were around 160 Long Range business jets available for sale in the public domain, or just over 4% of the fleet. By the end of 2023, this figure increased to over 230 aircraft (50% increase). We are seeing a similar trend for the whole business jet fleet, with the Midsize segment showing the greatest increase in inventory levels over a 12 month period.

As at April 2024, there are currently 230 Long Range business jet aircraft for sale, which equates to 6% of the fleet for sale.

In terms of liquidity, Cirium Fleets Analyzer data shows a decrease in the total fleet transacted in 2023, around 20% less than 2022. So far in 2024, we have seen a relative slow down in second hand sales, and increased days on market for aircraft which suggests the market may be softening.

What does 2024 look like for Long Range category values?

So far this year, inventory is still trending up while liquidity is trending down as aircraft appear to be sitting on the market for longer. We are seeing a general trend of pricing reductions when discussing with aircraft traders as it pertains to our aircraft value reviews. Already over the course of the first four months of this year, we have seen some softening in aircraft values during reviews. In this size category alone, we have conducted reviews across the Gulfstream G450, G550, V, and G650/G650ER types, observing reductions in Market Value opinion ranging from 2% to as much as 11%, although most notably by as much as 20% on the G450 as its market in particular has significantly slowed down since a reduction in charter operations. We should note that younger G650ER aircraft have seen values remain stable, while Bombardier’s Global 7500 has seen our opinions increase by 2-6%. We should not be surprised to see more of the same through 2024, and we’ll report our analysis to the market as it happens.

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