Europe’s slow growth and sinking currency have meant boom times for Kevin McCutcheon, an American who buys used private jets to resell in the U.S. He’s bought six aircraft in Europe and is negotiating for a seventh, a Cessna Citation in Germany, in less than two years. He’s finding plenty of bargain shoppers back home. Small and midsized U.S. companies and wealthy individuals are buying up Europe’s second-hand jets as that region’s economic woes spur owners to put their Falcons, CJ3’s and Excels on the market. “The U.S. has a stronger economy and a strengthening dollar, said McCutcheon, who founded Flight Solutions, which was created from an aviation company he started with country music star Reba McEntire in 1991.
In the last two years, the number of foreign jets sold in the U.S. jumped 45 percent to 371 from the previous two years, according to JetNet LLC, a Utica, New York-based research firm. The trend is accelerating this year with the dollar’s gains, which began in the summer. Of 48 European used jets sold from December through February, almost half, or 21, were bought by U.S. buyers. In the same period a year earlier, only 15 percent went to the U.S., according to Michael Chase, a private-aviation consultant. Retail prices range from a couple million to as much as $65 million.
Buyers also are benefiting from a glut of jets created by the 2008 financial crisis. In the boom years before, the market for new jets was so hot that sometimes people ordered them with the intention to flip at a profit. '‘That stopped overnight with Lehman Brothers and people were stuck with their airplane,’’ said Dannys Famin, managing director of Paris-based Unijet, which manages jet aircraft for companies and individuals.
The inventory is now being worked off with the return of U.S. buyers. When Famin put a used Cessna private jet up for sale in Paris last year, he got no European bidders. Instead, he quickly found U.S. buyers and sold the 9-passenger Citation CJ3 jet for 10 percent more than anticipated, he said. The jet retails new for about $8 million. ‘‘I got a better price and the selling period was shorter,’’ Famin said.
Thanks to the strong dollar, American buyers pay about 25 percent less for a used jet in Europe than one in the U.S., McCutcheon said. That is offset in part by extra travel for inspections and negotiations as well as higher costs to meet U.S. regulations and to transport the foreign planes, he said. Fermin’s jet’s journey from Paris included stops for fuel at airports in Reykjavik, Iceland, and Goose Bay, Newfoundland, before landing in New York.
Renovation is another cost. McCutcheon spent $2.2 million to overhaul a Cessna Citation Excel that he bought in the U.K. last year. He sold it to Stephen Slaggie, a co-founder of Fastenal Co., who stepped down from the board last year and owns a 3.4 percent stake in the company. He confirmed the plane’s purchase. The jump in U.S. sales comes amid a general strengthening of the used-jet market, which amounted to about $11.7 billion last year. Secondhand-jet transactions worldwide increased 8 percent in 2014 over the previous year and the average number of days aircraft were on the market fell by 42 to 350, Chase said.
Desire for a bigger jet drives some deals. RPC Inc., an Atlanta-based company that sells oilfield services and equipment, paid $5.1 million for a Cessna Citation XLS in January that was imported from the U.K. to replace a smaller Cessna, said Jim Landers, vice president of corporate finance. RPC flies to remote locations such as Midland, Texas, and Minot, North Dakota, where it’s sometimes difficult to find commercial flights, Landers said.
In December, U.S. owners bought two Dassault Falcon 900 business jets from Blue Chip Jet to acquire larger jets, said Lars Karlsson, managing director of the Gothenburg, Sweden-based aviation company. ‘‘It’s all about finding yourself a buyer and this happened to be an American buyer,” Karlsson said. The purchaser of one Falcon is registered under Moinian Jet One Holdings LLC and the other is under Easy Leasing LLC, with an address that’s shared with Stone Point Capital in Greenwich, Connecticut. The Moinian Group, a New York-based real estate company, and Stone Point didn’t return telephone messages and e-mails seeking comment.
In the last two months, London-based aircraft brokerage The Jet Business sold three foreign jets into the U.S. market and four out of the six deals it’s working on now will be planes going to U.S. buyers from abroad, said founder Steve Varsano. “The U.S. economy is getting better, and one of the sure places to see that is corporations and entrepreneurial businesses looking to buy more pre-owned aircraft,” Varsano said.