G650- first sub $40M asking price as inventory doubles

Last week, for the first time, a Gulfstream G650 asking price was reduced below the $40M threshold.

While the aircraft in question is not enrolled on an engine program and therefore carries a valuation impairment accordingly, this is still an important psychological level to cross. The impairment should be less than the normal negotiating margin for G650’s.

The aircraft is classified as a 2014 model year, with the first G650 deliveries having occurred in 2012.

In late 2015 this aircraft would have traded for $65M +/-. Last year there were multiple sales of this vintage in the $47M-$49M range.

Pricing pressure is being driven by inventory levels which have roughly doubled over the past 6 months- from 8 units in February to 17 units today. Only 2 aircraft have sold in the past 6 months.

Just under 5% of the fleet is for sale, even after the recent increase in supply. That’s not excessive. However, 13 aircraft have listed in the past 6 months. Perhaps the proliferation of shiny new objects has caused buyers to pause and see how the market reacts before they make a purchase decision.

Let’s hope. Because the alternate explanation is that the buyer pool for penthouses on 5th Avenue is dry. This would obviously have implications for the large cabin pre-owned market but consider the price range for used G650’s now overlaps the price range for new G500, 600, Global 5500, 6500, Falcon 6X, 7X, 8X. And the 650 has more range and cabin size than these models.

Makes you wonder what the apparent softening in the used G650 market might say about the activity levels that Gulfstream, Bombardier and Dassault are seeing for their new jets.