Gulfstream…”New Aircraft” Seller Perception and Market Reality
The high end of the spectrum for brand-new, (recently delivered) and future position sales in and among the top-tier OEM’s such as Gulfstream, Bombardier and Falconjet appears to be under increasing strain.
Take for example the Gulfstream G650 and G650ER; Gulfstream’s purchase agreement for these jets esssentially precludes all but a very few pre-delivery sales. Therefore, buyers are obliged to accept delivery of their G650 or G650ER and then “park it” at a suitable airport until sold….then the fun begins.
Inevitably, the owner has already decided that his/her beautiful G650 or G650ER is worth at least as much as he (or she) paid for it, when ordered. Therefore, we see some pretty ‘heady’ asking prices being bandied around. Reality starts to set in after the usual rush of brokers and tire-kickers has gone for lunch and the aforementioned beautiful G650/ER is gathering dust in a hangar. Or, heaven forbid, on some windswept airport ramp in a sales-tax-free state. The owner either quickly re-assesses the sale price target, or digs-in and hopes for a gullible buyer to come along and recognize the intrinsic beauty of his near $70MM flying dream machine.
Currently we know of at least three Gulfstream G650/ER’s facing this predicament. Asking prices have quietly slid by at least a couple of million dollars while the owner tries to bring a buyer to the table (in a couple of instances, delivered G650’s have slid by $10MM, languishing in the marketplace for up to a year). Further complicating the sales effort is the very OEM (Gulfstream) that sold the (now) seller the aircraft in the first place. (we have opined on this conundrum in prior blogs https://aviatradeaero.wpengine.com/bizjets-when-a-buyers-market-becomes-a-sellers-market/).
The proud owner/seller of the brand new G650/ER must contend with the OEM as competition because any prospective buyer will most certainly be also talking to the OEM so as to explore options. Gulfstream, self-evidently holds the cards when it comes to pricing, but seldom can deliver ‘on the spot’ when a pop-up buyer comes calling.
This means that a buyer can either wait for a Gulfstream delivery (and interior customization) or learn to love and live with a discounted G650/ER that was designed (albeit beautifully), with another owner in mind.
Here’s the latest …Gulfstream is apparently offering a four-zone G650ER…(the least popular variant, for many operational reasons) and it’s to be delivered later this year, for a mere $68.5MM…opportunity knocks, or not ?
Aviatrade will follow up with Bombardier and Falconjet market status in upcoming blogs.