Bread Outpaces New Business Jets for Price Increases

Using the latest US government CPI data, since 2020 consumer prices have risen by some 21% to today’s levels. This metric includes things like food and beverage, housing, apparel, medical care, transportation and other prices affecting households.

While there are many other measures of inflation, CPI is the term most often referred to as it affects the greatest number of people in the pocketbook.

In early 2020, prices were poised to rise as supply chains were disrupted by COVID and government stimulus money pervaded the economy. This scenario of too much money chasing too few goods led the annual inflation rate, which had averaged around 2% annually before the pandemic, to spike as high as 9.1% in June 2022.

While the inflation rate has since been tamped down to 3.4% by the Federal Reserve raising interest rates, the damage has already been done with to the price of almost everything over the past four years, from staples like bread (+27%) to new cars (+21%).

What’s happened to new business jet pricing during the same period depends on the specific model and manufacturer.

Business Jet Price Increases

According to Business & Commercial Aviation, rounding out the Top Three price increases between 2020 and 2024 is the HondaJet (+35.3%) and two models from Embraer – the Phenom 300 (+29.5%) and Phenom 100 (+29.3%).

It should be noted that the Phenom 100 was upgraded to the 100EX during this time which could explain some of that rise. Similarly, the HondaJet morphed from the Elite to the improved Elite II since 2020 prices were published.

Before delving deeper, it should be noted that manufacturers voluntarily provide pricing which is supposed to be the average of the last ten aircraft delivered.

While some OEMs may follow this request, it’s possible the numbers are skewed to throw off the competition, or to make the pricing look attractive to buyers. Regardless, it’s at least an attempt to compile apples-to-apples pricing comparisons. 

Next in the line of price increases was the Dassault Falcon 6X which increased 22%, perhaps due to a program delay and subsequent longer lead times which allows for higher list prices.

Another European jet – the Pilatus PC-24 – cost 21% more in 2024 than in 2020, and I’d speculate this one is a supply and demand dynamic, since the conservative, privately held company builds fewer than it knows it can sell of the very popular model, which in turn allows it great pricing leverage.

The last of the 20-plus percent ‘price gainers’ was the Cirrus SF50 Vision Jet, whose popularity amongst well-heeled private pilots wanting to move up commands a price premium.

All other business jet models rose less than inflation between 2020 and today, and averaging all models yields a 12.3% four-year price rise which is only a little over half of the 21% US CPI inflation measure.

Some Data Anomalies...

There were some anomalies amongst the data, too. Despite raising prices on its other models, Gulfstream hasn’t increased (or at least reported) any G280 price increase. Reasons could include not providing a pricing update, holding the line for competitive purposes, or because Gulfstream really acts as an agent for IAI which manufactures the plane.

For reasons unknown, the improved Bombardier Global 5500’s price today is 5% below its Global 5000 predecessor’s cost back in 2020. Similarly, the Global 6500 price is now listed 6.9% lower than 2020.

Thus, despite all the recent headlines on aircraft supply chain shortages, certification delays and long lead times, the average price inflation of business jets, if the numbers are to be believed, rose significantly slower than a new car or a loaf of bread since 2020.

On average the price of a new business jet rose just over $1m - enough to buy 500,000 loaves of bread.

More information from www.brifo.com

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