Aircraft Market Cycles: When to Buy and When to Sell

What drives aircraft market cycles?

Aircraft market cycles are driven by three variables: OEM order backlogs, used inventory as a percentage of the active fleet, and the cost of capital. When all three align in the buyer's favor — long backlogs, thin used inventory, cheap money — pricing runs hot. When they invert, pricing collapses faster than most owners expect.

The business jet market is structurally cyclical because supply is slow and demand is fast. Gulfstream, Bombardier, Dassault, Textron, and Embraer cannot ramp production meaningfully inside 18 months. New demand spikes — pandemic-era flight activity, a tax-policy change, a wealth-creation event — push buyers into the used market, drain inventory, and pull pricing up. Eventually OEM deliveries catch up, demand normalizes, and inventory rebuilds. The cycle repeats roughly every 4-7 years.

JetNet and AMSTAT publish the data that defines the cycle: used aircraft for sale as a percentage of fleet, average days on market, and asking-to-selling price ratios. Those three numbers, tracked monthly, tell you exactly where you are.

What happened in the 2021-2023 cycle?

The 2021-2023 cycle was the sharpest used-aircraft run in three decades, with used pricing rising 30-50% across most categories before reverting in 2024. Pre-owned Gulfstream G550 values moved from roughly $14M to over $20M between early 2021 and mid-2022. Mid-size jets like the Citation XLS+ saw similar percentage moves. Used inventory dropped to under 4% of fleet — historically thin — and days-on-market collapsed from 300+ to under 90.

Several things broke the cycle. Interest rates moved from sub-3% to 8%+ on aircraft financing inside 18 months. OEM deliveries normalized. Charter demand softened from its 2022 peak. By mid-2024 used inventory had rebuilt to 7-9% of fleet across most categories, days-on-market stretched back past 200, and asking prices on many models were down 15-25% from peak. Buyers who closed in Q1 2022 and tried to exit in Q3 2024 took real losses on top of normal depreciation.

What indicators signal a market turn?

Three indicators reliably signal turns: used inventory as a percentage of fleet, average days-on-market, and OEM backlog measured in months of production. A buyer's market shows inventory above 10% of fleet, days-on-market past 250, and OEM backlogs under 12 months. A seller's market shows inventory under 6%, days-on-market under 120, and backlogs past 18 months.

The 2008-2010 downturn pushed inventory past 16% of fleet in some categories. The 2014-2016 soft patch held inventory around 11-12%. The 2021-2022 squeeze drove it to 3-4%. Each of those readings was visible in JetNet data months before pricing fully responded. The data leads the pricing by roughly two quarters.

A second-order signal: watch what the boutique brokers and the larger firms — Jetcraft, Mesinger, Guardian, Avpro — are saying in their quarterly market reports. When everyone is publishing "inventory remains tight" language, the cycle is late. When the reports shift to "selective buying opportunities," the turn has happened.

When should you buy?

Buy when used inventory is above 9% of fleet, days-on-market exceed 200, and OEM backlogs are contracting. Those conditions give you negotiating leverage, real PPI concessions, and protection against further downside because pricing has already absorbed most of the correction.

Buying at the bottom of a cycle is rarely heroic — it usually feels uncomfortable because the news is bad and sellers are motivated for reasons that surface in pre-purchase inspection. That is the point. PPI findings, which run 70%+ of inspections turning up $50K+ in squawks, become negotiating tools rather than deal-killers when the seller has been on market for nine months.

The corollary: avoid buying into a seller's market unless you have a specific operational need that justifies the premium. Paying peak pricing for a 10-year-old aircraft means absorbing the cyclical correction on top of normal 5-8% annual depreciation. A buyer who paid $19M for a G550 in mid-2022 is looking at a $14-15M aircraft in late 2024 even before accounting for hours flown.

When should you sell?

Sell when used inventory drops below 6% of fleet, days-on-market are under 120, and the OEM you compete with is quoting 24+ months for new delivery. Those conditions mean buyers cannot wait for a new aircraft and will pay a premium for an immediately available used one with fresh inspections.

The mistake sellers make in hot markets is waiting for "a little more." Markets turn faster than they rise. The 2022 peak gave way to softening pricing inside two quarters; owners who listed in Q4 2022 captured most of the run, while owners who held into mid-2023 watched their asset reprice while still paying $1.5M+ annually in fixed operating cost.

If you are selling into a strong market, pre-position the aircraft: complete any deferred maintenance, refresh interior cosmetics, get records into digital format, and engage a broker 60-90 days before listing. A clean aircraft with current inspections in a tight market closes in 30-60 days at 95-98% of asking. The same aircraft in a soft market sits 250+ days at 85-90% of asking.

How does the cycle affect financing and structure?

The cycle affects financing in two ways: cost of capital and lender appetite. In tight markets, lenders compete and offer 20% down at SOFR+200-250 with 15-year amortization. In soft markets, the same lenders demand 30% down, price at SOFR+350-400, and shorten amortization to 10 years. The all-in cost difference can exceed 200 basis points.

Cycle position also affects deal structure. In buyer's markets, sellers accept escrow extensions, fund their share of PPI discrepancies, and tolerate longer financing contingencies. In seller's markets, buyers are asked to waive inspection categories, shorten contingencies, and put hard money up at LOI. A buyer who insists on standard protections in a hot market loses the aircraft to the next bidder.

What is the practical takeaway?

The practical takeaway: track JetNet or AMSTAT data quarterly, ignore the noise from any single broker's market commentary, and let the inventory and days-on-market numbers tell you where you are. Buy when those numbers are uncomfortable for sellers. Sell when they are uncomfortable for buyers. The 60-180 day acquisition timeline means you cannot time the exact bottom, but you can reliably avoid the exact top — which is where most of the regret in aircraft ownership originates.