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Pre-owned Market Spotlight Challenger 604/605/650 – Asian Sky Quarterly 2021 Q2

by Global Sky Team

Pre-owned Market Spotlight Challenger 604/605/650 – Asian Sky Quarterly 2021 Q2

The Challenger series is not only a living legend in the market but also a proven efficiency tool. It is one of the most popular pre-owned models and is very popular in the North America market. As the world begins to recover from COVID-19,  we estimate that the market interest and demand for the series will increase.

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Aircraft Delivery

Since the release of the very first Challenger 600 back in the 80s, more than 1,000 Challenger 600s have been built. The model series has such a long history that stretches back as far as the 70s when its competitors were the Falcon 50 & Gulfstream G-II.

The Challenger 600 series’ market success began with the upgraded CL-604 model. According to Amstat, from 1996 till 2007, over 340 CL-604 models were built and delivered, with the US being its largest market with more than 200 aircraft currently in operation.

Following its first flight in 2006, the Challenger 605 was certificated and introduced. Compared to the Challenger 604, the airframe was updated with larger cabin windows and a new tail cone, and the avionic suite was updated with the Collins Pro Line 21 and “electronic flight bag” capabilities. The last CL-605 was delivered in 2016. In total more than 280 aircraft were delivered. The CL-605 was later replaced by the current production model, the Challenger 650. Today the CL-650 has seen more than 110 deliveries, according to Amstat.

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Operation in Asia Pacific

The Challenger offers 4,000 nautical miles non-stop range, enough to fly non-sop between Singapore and Sydney or from Hong Kong to anywhere in Greater China.  However, it did not have huge success in the Asia market, due to customer preference for larger cabins and ultra-long-range international flight demands – they want the aircraft to be transcontinental, even if they only fly once a year. According to our latest Business Jet Fleet Report, the Challenger 605 is operated in good numbers in Asia,  with the majority of the fleet operated in the Greater China market including Mainland China (14), Hong Kong (4), Macau (2), and Taiwan (1).

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Currently, there are 18 Challenger 604 listed for sale, which make up 5% of the total fleet in operation. This is below our known market average level which is around 8% – meaning the aircraft is quite popular and is enjoying a shorter selling period and a good supply/demand ratio. On average, Challenger 604s spend 214 on the market. Depending on the delivery year, as well as the avionics equipment and interior conditions, a pre-owned CL-604’s price ranges from 3 million USD to 6 million USD. All of the Challenger 604s currently for sale have been enrolled on an engine maintenance program.

At its peak in 2015, there were 50 Challenger 604s listed for sale, however, it is now down to around 30 listings. The average asking price has been steadily decreasing given the natural aging of the current fleet.

In the past six months, there have been 18 Challenger 604 transactions,  with 15 deals done in the US. The Challenger 604 enjoyed a period with low inventory levels and high transactions during 2018-2020, due to the US corporate tax remission plan that stimulated the business aviation industry and corporate expenses.

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The market supply for the Challenger 605 was slightly higher than 604. There are 20 aircraft for sale which make up nearly 7% of the total fleet in operation. You can find listings  on the market ranging from 2007 to 2014. Given the flight hours and equipment, the current price ranges from 6 million USD to 9 million USD.

Market demand for the Challenger 605 has been strong over the past few years, with an average of two to three transactions completed each month. The US market remains where most buyers and sellers come from.

It is estimated that having the current inventory sold would take around 300 days to complete. Usually, sellers would have to reduce their price by 1 million USD. We now see market preferences regarding relatively younger Challenger 605s, aged less than 10 years, with transaction prices ranging around 9 million USD.

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Currently, there are only four Challenger 650 listings – around 3.5% of the total fleet (over 110). The newer model in the series enjoys relatively lower days on the market to find a deal – around 100 days.

Aircraft values are affected by airframe hours, whether the aircraft isenrolled on a maintenance program, and whether the aircraft has the latest technology onboard, like High-Speed Internet, etc. The average asking price was around 18 million USD in late 2018 when the first Challenger 650 was put on the market. Today the average asking is around 16.5 million USD.

On average there has been one Challenger 650 transaction completed every two months. For the past six months, we have seen three Challenger 650s, with or without engine programs, being sold.

*Special Thanks to Market Insight Support from Guardian Jet.

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