Originally published as a blog for AINsight for Aviation International News on 8/4/23
Sometimes change can be overwhelming. Sky falling events. History can remind us of a few of those events, including the 2001 dot-com bubble burst, the 2008 Global Recession, and the 2015 unspoken recession due to the oil price collapse and other global economic factors. This one will go down as the 2023 industry balance shift. Of all the preceding events and others I did not list, this one could be the most desirable and sought after phenomenon. This 2023 balance shift should bring harmony, reality, normalization, and growth to us all.
Starting in March of 2020, we all got caught off guard by the pandemic. Ultimately, our business grew with the unprecedented surge of first-time buyers entering the fray. Huge numbers of entrants brought demand that stretched us as an industry in all segments. Hangar space was frenzied, pilot training slots had lead times never seen before, and maintenance pre-buy and modernization slots were all but gone. And let’s not forget the actual inventory of aircraft to select from and try to buy. Prices skyrocketed. Supply chain issues caused us all to wring our hands and shake our collective heads. What a mess. Charter demand went through the roof, and the idea of providers delivering a good service offering was next to impossible. So, with this rebalancing of 2023, there will be some bystanders who will not survive, consolidation of some providers, and adjustments from operators and customers. But we are a resilient, strong industry that was built to withstand many adversities even when they occur all at once.
However, there are such positive events taking place that our industry will not only survive but thrive. Let’s name a few. More owners are proactively looking at fleet shifts and transitions, which is allowing new inventory to come to market. More inventory allows for more choices for buyers. More choice will allow for easing in prices, and the easing will allow for more prospects to feel safer about entering the world of aircraft ownership. Do not get me wrong; I am not considering this price easing to disrupt the value calculation of aircraft, simply ease the frenzy. This easing will also allow sellers to be more cognizant of the expectation of the buyer, and therefore play a nicer sandbox game. Also, the natural phenomenon of greater inventory numbers is longer days on the market. This should not scare sellers, just create a more natural process. This more natural process levels the playing field and puts the balance back in our steps.
So welcome to a time of change that is finally created by all the right events. No catastrophic occurrences that stop dead in the tracks the industry and players that have for so many years come to welcome and enjoy the act of buying, selling, operating, and reselling the equipment that flies us safely and efficiently around the world. Enjoy!