Piper Sales Surging & More People Leasing Aircraft

Piper Aircraft Forecasts Strong 2023 Deliveries

Piper Aircraft announced at EAA AirVenture that it expects to deliver 270 aircraft this year, up from 236 in 2022. The company's vice president of sales, marketing, and customer support, Ron Gunnarson, current analysis of the market as "the best many of us have ever seen," with dealer inventories of new M-class airplanes, as well as Seminoles and Archers, at "near zero" and available used inventories of M-class aircraft at less than 3 percent.

Gunnarson called market conditions, coupled with continuing supply-chain challenges, "both a curse and a blessing" that was forcing the company to "keep it real" and not over-expand during the current boom. He said that Piper's bottom line continues to be accredited by large fleet orders for training aircraft, including one announced earlier this year from Blue Line Aviation in North Carolina for up to 115 aircraft. He also noted strong demand for the company's Archer DX turbo-diesel engine training aircraft from foreign markets, particularly India, which he characterized as "one of the fastest-growing commercial markets."

In order to meet the challenge of increased demand, Piper is investing $30 million in a modernization of plant and equipment. This includes the installation of robotic welders and 3D printers, which will help the company to increase production capacity and improve efficiency. The company is also creating a new Piper industrial manufacturing division that will serve Piper's manufacturing needs and, using excess capacity, outside customers.

Gunnarson added that Piper is continuing to aggressively compete for talent by offering superior fringe benefits, including a family health center that provides care to employees and their families at "zero cost."

Here are some snippets of what Piper are doing:

• Piper's M-class aircraft are popular for training and personal use.

• The company's Archer DX turbo-diesel engine is a new and innovative product that is gaining traction in the market.

• Piper's investment in new plant and equipment will help the company to meet the growing demand for its aircraft.

• The company's family health center is a unique benefit that is attracting top talent to Piper.

Market Observations & Opportunities

The business aviation industry is expected to see a decline in activity in 2023, but there will be some positive developments as well.

For aircraft brokers, there will be more pre-owned inventory available, but demand is expected to taper off. This means that brokers will have more choices to offer their clients, but they may also have to work harder to find buyers.

Aircraft buyers will benefit from lower prices, but lease and finance rates are expected to increase. This means that buyers will have more negotiating power, but they may also have to pay more for financing.

Aircraft sellers who paid over the asking price during the preowned buying frenzy are unlikely to ever recover this premium. This means that sellers may have to accept a lower price for their aircraft, or they may have to wait longer to sell it.

New aircraft manufacturers will face a backlog of orders, but delivery positions are being stretched out to 2025 and beyond. This means that manufacturers will have to be patient, but they will also have a guaranteed stream of revenue for the next few years.

The long-standing supply chain and labor shortages will hamper near-term production ramp-up, but they are expected to improve throughout the year. This means that manufacturers will have to work hard to overcome these challenges, but they should be able to do so by the end of 2023.

Private Jet Leasing Opportunity

As a result of prices coming down and adjusting, various number of private jet owners, that are expecting delivery of their new jet soon, are deciding to not sell their current aircraft but lease it out for 1-3 years. I do believe this is creating new opportunities in the market both for current aircraft owners and those that need a jet for business but aren’t quite ready to buy.

This week alone I was offered three off-market jets for dry lease: A Global Express, a Gulfstream G550 and a Gulfstream GV. Well, I found a home for the Global Express and the G550 in 48 hours, but still have the Gulfstream GV available.

Here are some details on the GV:

Year of manufacture: 2000

Just over 6,600 hrs total time

249 landings

Fresh of 96 & 192 month inspections

RRCC

Fwd Galley

14 Pax configuration

2015 new interior

2018 new exterior paint

This Gulfstream GV can be either dry leased or wet leased, ideally for a minus term of 12 months. If you would like to know more, reach out to me on [email protected] and I’ll get you scheduled in for a call.

^{Newsletter Takeaways}

• More people are learning to fly and this is why a manufacturer like, Piper is seeing a surge in sales.

• Prices are coming down but demand is still there, as more people flocking to short term leases.

Get yourself a copy of Fabrizio Poli’s latest book, The Quantum Economy.