Throughout 2015, the large-cabin, long-range business jet segment showed some serious signs of weakness in light of slowing demand from an emerging markets slowdown and reduced orders from oil-producing countries, according to Flightglobal’s Ascend consultancy. This also triggered a slump in the residual values of many established models in this niche sector, it says.In its latest ViewPoint newsletter, Ascend highlights a 16% year-on-year decline in the market value of the Gulfstream G550, and a similar fall in value during the same period of its smaller, large-cabin stablemate the G450. Bombardier’s top-of-the-range Global 6000 and 5000 fared better in 2015, says Ascend’s senior consultant and newsletter author Daniel Hall, but “G650 took a 10% hit and the Dassault Falcon 7X down 9%, year-on-year.”In comparison, Bombardier's Challenger 604 performed relatively well, with values falling by only 6% in 2015, compared with the previous 12 months, but its newer sibling, the 605, “saw an 18% hit,” says Hall.Ascend attributes the steep value decline to the size of the global inventory and the age of the aircraft.“Models such as the G450 and G550 may meet the so-called ‘10% for-sale metric’,” says Hall, “but they are plagued by high absolute numbers of aircraft for sale."A similar picture is emerging for 10-year-old, top-end jets. For example, a 2002-built Global Express, the first iteration of the Global 6000, would have been valued at $27.5 million in 2012. Three years later, a comparable example was worth $18 million. Likewise, the market value for a 10-year-old Embraer Legacy 600 has fallen by 40% over the same period, Hall reveals.A one-year-old G550, meanwhile, was worth $30 million in 2013, but today would trade for around $22 million. “The G450 has trended in a similar fashion,” says Hall.
BY: KATE SARSFIELD
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