Search

Advertisement

Marketline Newsletter
For over 50 years, Aircraft Bluebook has been providing valuable information designed to give the most accurate, comprehensive and timely assessment of the aircraft market.
Advertisement

click here to go homeclick here to go to the archivesclick here to subcribeclick here to meet our staff

MARKET PERCEPTION IS KEY TO CURRENT AIRCRAFT VALUES

Vol. 22, No. 2 | May 27, 2009 | Go to Charts

by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

With the warm rays of the summer sun approaching, the current economic condition of values for pre-owned aircraft is anything but sunny. The aircraft market has suffered its greatest loss in value since the corporate jet became a part of American enterprise with its introduction in the 1960s. As with any commodity traded in a free market, one that is not restricted or regulated by government controls on pricing, the core element of value is in human perception. For aircraft values, perception of worth is always on the leading edge of value.

The perception of value has been embedded in the general and corporate aviation market since its beginnings. Reflect for a moment on the case of a damage event to an aircraft. At the mere mention of the word damage, the market reacts in an aggressively negative manner. Depending on the market conditions and the nature and cure of the damage, all of these variables will impact perception of value. In an average and stable market, a whole tier of potential buyers will not even consider an aircraft with a damage incident. They just don’t want to deal with the stigma and risk in value for owning such an aircraft when there are normally other similar, undamaged aircraft available for ownership as well. And those knowledgeable buyers who do consider the prospect of ownership of such an aircraft with damage history will want to be compensated for their risk, usually in the form of a discount in price in an average market. An aircraft cured from a damage incident will be restored to a condition of airworthiness that is equal to if not better than its original condition prior to the damage incident. It is not a question of condition or safety but only of market perception that will negatively impact value.

Such is the case in the current state of our economy. The economy has been damaged. No need to point blame anywhere. We all are members of the same human race. Embedded in this damaged economy is the aircraft market. With credit scrutinized and inventory overabundant, the free will and intellect of a rational human being (aka common sense) would naturally offer something significantly less for an aircraft. The market conditions themselves yield to a severely reduced perception of value.

On the sunny side, perception is fluid. The dynamics of today’s market are subject to change. Heads up for buyers: Bargain values may not get any better. Now is the time to buy.

Jet

Bluebook-at-a-glance
Increased — 0
Decreased — 781
Stable — 26

Long-range business jets, such as the Bombardier Global Express, Challenger, Dassault Falcon 900/2000/50 series and Gulfstream G-IV/V/450/550, all indicated downward values in the double-digit percentage column. The same value losses also occurred in the mid-cabin series. Cessna Citation X values were down in the $1 million. The Hawker 800 series and the Lear 60/45 series also were not able to report any stability in value. Reductions in value numbered in the millions of dollars.

Turboprop

Bluebook-at-a-glance
Increased — 3
Decreased — 485
Stable — 95

Though still negative, the Beechcraft families of King Airs experienced less dramatic value adjustments. The King Air 350 was down an average of $600,000 compared to the previous quarter. Similar percentage drops in value were also noted in the King 200 and 90 series. The Pilatus PC-12 was generally down $300,000. The Socata 700 series was off $200,000.

Multi

Bluebook-at-a-glance
Increased — 0
Decreased — 648
Stable — 6

For the most part, values dropped across the board in the twin-piston market. Later-model Beech Barons and Cessna 421s were off $20,000. Earlier models were down $10,000. The Diamond Twin Star saw a $50,000 loss in value. The factory-equipped and unresolved Thielert engines could cause further diminished values. Piper Seneca Vs were down in the $40,000 range, and earlier models were generally down $10,000.

Single

Bluebook-at-a-glance
Increased — 0
Decreased — 1953
Stable — 479

Agriculture planes continue to hold value. Early models, late models, pistons and turbines all held value mainly due to the higher demand for these aircraft. American Champion aircraft were down anywhere from $1,000 for some early models to the $5000 range for later models. For 1995 and later models, the Beechcraft Bonanza A36s were down $30,000 or more. Late-model Cessna 172s, 182s and 206s all experienced reductions in the reported average retail column in the $10,000-to-$20,000 range. The former Columbia also saw value decreases consistent with other late-model Cessna singles. Diamond Aircraft were no exception. Average retail values were down an average of $10,000.

Helicopter

Bluebook-at-a-glance
Increased — 4
Decreased — 772
Stable — 228

Helicopters continue to fair the economic storm better than fixed wings. Although average retail values were in the negative column for a majority of models, this market segment continued to show endurance as late-model, equipped and market-priced ships continue to sell. For the most part, values were generally off no more than 5 percent to 10 percent when compared to the previous quarter. The Augusta 109 was down no more than 9 percent in later models. Bell 430s were off $100,000. The Eurocopter AS350 was down $100,000 while the Eurocopter EC120 was down $50,000. Robinsons were off 5 to 8 percent. Sikorsky was down 5 percent in some year models when compared to last quarter.

New in Marketline

A gross domestic product graph replaces the former exports graph.

Contact Aircraft Bluebook

Please contact Aircraft Bluebook–Price Digest if you have any specific concern in a particular aircraft market. Call toll-free at 877-531-1450 or direct at 913-967-1913.

[Go to Charts.]

CHARTS — MAY 27, 2009

Used Aircraft Market: This chart displays each model's quarterly value in relationship to its average equipped price at the inception of the aircraft. The study begins in the spring quarter of 1994 and includes the Jet, Turboprop, Multi, Piston and Helicopter. For all charts, the red number indicates the first reporting date after 9-11.

Jet: The jet chart depicts the average price (in thousands) of the six 1990s jets listed in the box.

Turboprop: The turboprop chart depicts the average price (in thousands) of a 1985, 1986 and four 1990 turboprops listed in the box.

Multi: The multi chart depicts the average price (in thousands) of the six multi models listed in the box. Each model’s year will precede the name of the aircraft.

Piston: The piston chart depicts the average price (in thousands) of the 10 pistons listed in the box. Each model’s year will precede the name of the aircraft.

Helicopter: The helicopter chart depicts the average price (in thousands) of the six helicopters listed in the box. Each model’s year will precede the name of the aircraft.

NASDAQ: This ratio scale chart depicts the change for the NASDAQ daily average from quarter to quarter beginning at the end of the first quarter of 1992. Each data point represents the closing daily average on the last trading day of each quarter. This study originates in the first quarter of 1971.

Aircraft on Registry: The Aircraft on Registry chart depicts the number of aircraft reported in Aircraft Bluebook that are listed on FAA records and considered to be in the U.S. inventory.

U.S. Real Gross Domestic Product: This graph represents real gross domestic product measured by the U.S. Department of Commerce. Each data point represents the percentage change from the 2005 baseline GDP. The study begins with the second quarter in 2005.

Single/Multi: The blue line in the Single/Multi chart depicts change-of-status data for singles. The green line represents multis.

Jet/Turboprop/Heli: The dark blue line in the Jet/Turboprop/Heli chart represents change-of-status information for jets. The green line depicts turboprops, and the light blue line represents helicopters.

Total Market: Depicts change-of-status data for all aircraft included in the Aircraft Bluebook. The numbers are from the FAA Registry. Gliders, homebuilts, airliners and other aircraft not found in the Bluebook are not included in this study.

 

AIRCRAFT BLUEBOOK–PRICE DIGEST ATTENDING NAFA MEETING

Aircraft Bluebook–Price Digest will be in Fort Lauderdale, Fla., April 22-24 for the National Aircraft Finance Association meeting. Carl Janssens, ASA, will be a panelist at the following workshop:

April 23, 1-5 p.m.
Breakout Session: Pistons and Turboprops
Workshop 3: Trends and Evaluations

Panelists:
Carl Janssens, Aircraft Bluebook
Fletcher Aldredge, Aircraft Value Reference (VREF)
Ken Dufour, Aviation Management Consulting, Inc.

Topics:
Effects of Current Economy on Values, Outlooks & Trends

Carl will be able to offer some insight into the latest aircraft values and what to expect in the summer issue of Aircraft Bluebook.

BUSINESS JET BUYERS, SELLERS DON'T AGREE ON VALUES

Vol. 21, No. 44 | Feb. 18, 2009 | Go to Charts

by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

What else can be said that hasn’t already been analyzed, scrutinized and editorialized with regard to the state of the U.S. economy and business jet sales? Nothing! To sum up, jet sales are no longer in a cool-down mode. This industry has been pickled.

While President Obama seeks a silver bullet for the economy, there aren’t any handouts in store for aircraft OEMs. Unlike its automotive brethren, the business jet segment has not been offered an economic recovery parcel. There is not even a crash cart with paddles waiting. We’re on our own.

Looking at the few jet sales that occurred in the final three months of 2008, it is interesting to attempt to identify the types of transactions. Are the sale prices considered fair market values, or are they more along the lines of distressed liquidation values? It depends on the side of the bargaining table. For the seller, chances are the distress in the negotiated sale price has to do with some urgency to liquidate the asset. On the other hand, the buyer who is the end user will argue the sale price is fair market value because he would not be willing to pay more for the aircraft.

With too many buyers and sellers still riding the fence, it is hard to know what to call the sale. One thing is certain: If the present economy is our OK Corral, it is getting close to high noon. With the showdown at hand, one side or the other will be the first to break leather. After the smoke clears, everyone will know who the winner is. Time will tell.

Jet

Bluebook-at-a-glance
Increased — 0
Decreased — 563
Stable — 262

Little surprise for the jet market tracked by Aircraft Bluebook: No aircraft in this category experienced gains in value. Most models of every jet manufacturer experienced yet another quarterly loss. Large-cabin jets such as the Bombardier Globals, Falcons and Gulfstreams continued the downward trend. Even before the ink dries, values of some models continue to fall.

The Cessna Citation X and Sovereign were examples of the few jets that, for the most part, had no decreases in values when compared to the previous quarter. This was the case for select Hawkers and Learjets as well.

Turboprop

Bluebook-at-a-glance
Increased — 6
Decreased — 209
Stable — 415

Socata and Pilatus generally kept the turboprop market stable for another quarter. Most of the decreases in value for other turboprop manufacturers were kept to a modest 3 to 5 percent reduction when compared to the winter 2008/2009 Bluebook. The turboprop market might have received a slight bounce from jet operators scaling back to jet-prop-driven power.

Multi

Bluebook-at-a-glance
Increased — 1
Decreased — 178
Stable — 494

Late-model twins continued to bleed off value while the majority of early-model aircraft remained stable. Late-model Beech Barons and Piper Senecas were down in excess of $30,000. Well-equipped reconditioned aircraft, such as the Lock & Key Piper Chieftain, still command a respectable value when returned to the resale market.

Single

Bluebook-at-a-glance
Increased — 163
Decreased — 512
Stable — 1786

Ag planes kept a positive note in the single category. Select models experienced modest increases. Late-model aircraft generally experienced decreases in value. Beech Bonanzas were down 4 percent, and Cirrus experienced a 3 percent loss when compared to the previous reporting period. For the most part, 20-year-old or older aircraft remained unchanged when compared to winter 2008/2009 Bluebook values.

Helicopter

Bluebook-at-a-glance
Increased — 4
Decreased — 174
Stable — 814

Helicopter values appear to have reached a plateau. With only a minor increase in early-model Eurocopters, the majority of values remained stable when compared to the previous quarter. Most piston-powered ships as well as some single-engine turbines were in the loss column.

Aircraft Bluebook — Price Digest here for you

Please contact Aircraft Bluebook if you have any specific concerns in a particular aircraft market. We will be happy to share with you the most up-to-date information available for your market segment. Call us toll free at 877-531-1450 or direct at 913-967-1913.

[Go to Charts.]

 

CHARTS — FEB. 18, 2009

Used Aircraft Market: This chart displays each model's quarterly value in relationship to its average equipped price at the inception of the aircraft. The study begins in the spring quarter of 1994 and includes the Jet, Turboprop, Multi, Piston and Helicopter. For all charts, the red number indicates the first reporting date after 9-11.

Jet: The jet chart depicts the average price (in thousands) of the six 1990s jets listed in the box.

Turboprop: The turboprop chart depicts the average price (in thousands) of a 1985, 1986 and four 1990 turboprops listed in the box.

Multi: The multi chart depicts the average price (in thousands) of the six multi models listed in the box. Each model’s year will precede the name of the aircraft.

Piston: The piston chart depicts the average price (in thousands) of the 10 pistons listed in the box. Each model’s year will precede the name of the aircraft.

Helicopter: The helicopter chart depicts the average price (in thousands) of the six helicopters listed in the box. Each model’s year will precede the name of the aircraft.

NASDAQ: This ratio scale chart depicts the change for the NASDAQ daily average from quarter to quarter beginning at the end of the first quarter of 1992. Each data point represents the closing daily average on the last trading day of each quarter. This study originates in the first quarter of 1971.

Aircraft on Registry: The Aircraft on Registry chart depicts the number of aircraft reported in Aircraft Bluebook that are listed on FAA records and considered to be in the U.S. inventory.

Export Data: These numbers include both airplanes and helicopters. The numbers do not include aircraft that have empty weights in excess of 33,069 lbs.

Single/Multi: The blue line in the Single/Multi chart depicts change-of-status data for singles. The green line represents multis.

Jet/Turboprop/Heli: The dark blue line in the Jet/Turboprop/Heli chart represents change-of-status information for jets. The green line depicts turboprops, and the light blue line represents helicopters.

Total Market: Depicts change-of-status data for all aircraft included in the Aircraft Bluebook. The numbers are from the FAA Registry. Gliders, homebuilts, airliners and other aircraft not found in the Bluebook are not included in this study.