Global Express Market Seeing Wholesale Price Reductions Due to Weak Demand

October 23, 2012, Michael Arnone

Recent weakness in the Bombardier Global Express market has precipitated some of the largest price reductions across the entire large cabin segment in recent weeks. These price reductions, of unprecedented scope, now offer buyers some very strong deals in the Global Express marketplace. Consider that six months ago a 2002 Global Express with 3,200 hours, new paint and interior, and enrolled on an engine program with recent heavy maintenance completed, would run a buyer somewhere in the neighborhood of $26.0MUSD. After multiple price reductions that same Global Express can now be purchased just below $21.0MUSD. Last week the price was lowered on another similar Global Express with only 2,700 hours by over $3.0MUSD. This aircraft can now be acquired below $21.0MUSD.

Up until very recently the equivalent Gulfstream GV, a close competitor to the Global Express, was garnering most of the buyers’ focus in the 2005 and older pre-owned long-range segment. Over the past few years the GV has consistently outsold the Global Express nearly five to one due to more value-oriented pricing. The GV was trading for much of the past 24 months at a substantial discount to the Global Express. However, recent large price reductions have now swung the pendulum around to the Global Express segment as sellers in this market aggressively court buyers. We believe it’s only a matter of time before buyers realize the value that the Global Express market offers at present.

With plenty of inventory—currently 25+ aircraft—buyers have no shortage of choices from which to choose as the year closes out. In addition, we expect more inventory to hit the market early next year in view of ramped up deliveries of Gulfstream’ s G650 and Bombardier’s Global XRS replacement—the Global 6000. Over the next two quarters, strong buying opportunities for a 5,000 nautical mile large cabin presents buyers with a multitude of choices. Now is as good a time as any to consider Bombardier’s long range Global Express.

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