AEROCOR CITED IN CONTRAILS EMBRAER FOR 2022 MARKET REPORT
ORIGINALLY PUBLISHED BY AJ PUBLICATIONS
By Jens Personius
2022 PHENOM MARKET TRENDS
Exceptional Q4 demand in 2021 left Phenom 100 and 300 inventory depleted at the start of the year. However, demand for the few remaining aircraft remained high, leading to an abrupt spike in prices in the first half of the year. Over the summer, the inventory of base model aircraft has begun to recover. While macro trends can broadly describe the Phenom market, the growth and maturation of the upgraded aircraft in each fleet warrant a closer analysis of their micro trends. Before looking at each segment individually, it is helpful to have a bigger picture of both fleets.
FLEET BREAKDOWN
Phenom 100: Phenom 300:
-380 active aircraft -659 active aircraft
-74% Phenom 100 -74% Phenom 300
-14% Phenom 100E -26% Phenom 300E
-12% 100EV
PHENOM 100 INVENTORY, TRANSACTIONS, AND PRICING
The Phenom 100 “legacy” inventory has steadily increased from its historic low of 1.72% in January to 5% of the fleet in August. The first two quarters saw five and nine aircraft change hands respectively, while only two sales have been recorded thus far in Q3. This year, average prices have ranged from $2.4m to $2.9m, with the highest priced sales occurring at the end of Q2. If inventory levels continue to rise, moderate price softening should be expected through the end of Q3.
Phenom 100E inventory was at a five-year low at the start of this year and rose to 3.5% in Q2, where it has remained stable. Additionally, four aircraft have sold this year, with the last sale closing in May. Average prices rose as high as $3.8m in Q1 and decreased to $3.6m at the beginning of Q2. If inventory levels remain stagnant through Q3, sellers interested in upgrading should consider listing their aircraft to capitalize on the low competition in the market.
No 100EV aircraft were available at the start of this year; inventory increased to 3% by mid-summer and fell to 1% by the end of August. Average prices reached an all-time high of $5.5m at the end of Q2 and have ranged from $4m to $4.1m over the summer. Valuations for early model 100EVs and Citation M2s are each up 15% since January, indicating that 100EV values are keeping pace with the competition.
PHENOM 300 INVENTORY, TRANSACTIONS, AND PRICING
Phenom 300 inventory started January at 0.4% and has maintained roughly 1.6% over the summer. There were eight transactions in Q1, four in Q2, and another four thus far in Q3. Average prices rose to an all-time high of $8.5m in August. Phenom 300 valuations are up 10% as of August; however, inventory has increased nearly 295%. Similar to the Phenom 100, a price decrease can be expected as inventory levels continue to rise.
Only two Phenom 300E’s have been publicly listed thus far in 2022. The first plane to enter the market went under contract almost immediately after being listed. A total of five 300E’s have sold this year. At $13.5m, the 2021 Phenom 300E currently on the market is the highest priced pre-owned aircraft in its segment to date. With the first 300E delivered in the spring of 2018, lower serial number aircraft will soon be approaching the end of their five-year warranties. Until that point, inventories are likely to remain low and prices high.
Low serial, base model Phenom 100s and 300s remain the most active segments in their respective fleets. Inventory levels of each have been steadily rising to meet their demand. Inventory of the advanced models, including the 100E, 100EV, and 300E, remains sparse. Values of these aircraft are at all-time highs, and owners looking to upgrade are encouraged to list their aircraft while supply remains low. As the early aircraft in these segments near a maturation point in their life cycles, it is likely that more will slowly start coming to market in the near future.
