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PRE-OWNED AIRCRAFT SALES SEARCH FOR STABILITY IN FAILING ECONOMY

Vol. 20, No. 43 | Nov. 25, 2008 | Go to Charts

by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

The end of the third quarter of 2008 brought havoc and chaos to our national and global economies. Consider the devastation of a violent act of Mother Nature. Everything in the radius of destruction gets annihilated, without concern for good or bad, passive or active, aware or unaware. Corporate aircraft sales could not dodge the violence of the economic meltdown. In the wake of economic failure, the aircraft market is searching for stability.

Although everyone is quick to blame the other guy, the bottom line is that America has been victimized again by its own mediocrity whether because of greed, Fannie Mae and Freddie Mac’s version of social justice, or, well, whatever. At the core of this current crisis is the failure to coordinate and effectively execute economic intelligence and data that would otherwise protect and promote the economic environment. A three-dimensional level of communications is lacking. Alan Greenspan, former U.S. Federal Reserve Board chairman, had a talent for getting information to flow across the board. He taught his organization to acquire economic data and to effectively analyze, communicate and execute it. The actions of the Federal Reserve protected the U.S. economy and allowed it to flourish during his nearly 20 years of leadership. Communications can only be effective when the appropriate action is taken. Action needs leadership. Leadership is only as good as the information on which it operates. The human element will always inspire or slumber or, said in another way, provide charisma or mediocrity as the catalyst for action.

Jet

Bluebook-at-a-glance
Increased — 0
Decreased — 795
Stable — 24

Nearly all of the jet aircraft tracked in Aircraft Bluebook experienced a decline in value ranging from 7 percent to nearly 20 percent when compared to the previous quarter. As expected, aging aircraft were responsible for the more significant declines in value.

Turboprop

Bluebook-at-a-glance
Increased — 20
Decreased — 351
Stable — 247

There was some good news for the turboprop segment. With a tight inventory of available equipped DeHavilland Twin Otters in the current market, values for these aircraft have increased. Ag turboprop aircraft were mostly responsible for reporting stable values when compared to the previous quarter. The remainder of the aircraft in this category averaged 8 percent decreases in value.

Multi

Bluebook-at-a-glance
Increased — 0
Decreased — 488
Stable — 182

Multi piston engine aircraft, though suffering from the negative effects of the economy, did not suffer as much in the loss column when compared to last quarter. Losses were closer to the 5 percent range, generally speaking.

Single

Bluebook-at-a-glance
Increased — 112
Decreased — 1120
Stable — 1197

The single engine market has also felt the brakes on the economy. Sales nearly came to a full stop after the economic curtain fell in September. Again, the ag planes experienced modest gains from the previous quarter. Aircraft with unchanged values were in the $100,000 range or less. For the most part, decreases in value were minimal when compared to other aircraft market segments.

Helicopter

Bluebook-at-a-glance
Increased — 272
Decreased — 173
Stable — 503

Helicopter values remained stable for yet another quarter. Late-model single and twin turbines continued to hold value. Aging turbines as well as piston models experienced some decline in value. In all, the helicopter segment has weathered this economic storm better than the other aircraft in Bluebook.

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 — NOV. 25, 2008

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-ownership data for singles. The green line represents multis.

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

Total Market: Depicts change-of-ownership 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.

PRE-OWNED AIRCRAFT SALES THROTTLE BACK

Vol. 20, No. 3 | Aug. 20, 2008 | Go to Charts


Activity Drops in Second Quarter

by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

The second quarter of 2008 was a turning point for pre-owned aircraft sales activity. Sales have throttled back, and inventories have increased. The price of fuel and the general economy might have found their way into the aviation market. Although such factors have an indirect impact, interested and qualified buyers remain in the marketplace. The only difference is that these buyers are not willing to pay as much today for an aircraft.

For pre-owned aircraft, supply and demand have turned a seller’s market into a buyer’s market. Values will undoubtedly have to decrease before an agreement in price can be reached between the willing and knowledgeable buyer and seller. According to AMSTAT, the number of jets tracked by Aircraft Bluebook and available for sale or lease increased during the second quarter of 2008. When compared to the first quarter of 2008, inventories grew by a whole percentage point. Although 1 percent does not sound like a significant increase, it does represent an additional 170 jets for sale that were not being marketed in the previous quarter. Speculation does not skew Bluebook pricing. Sale prices generally were down when compared to the previous reporting period. As a result, a number of decreases in values appear in the fall 2008 edition of Bluebook.

Jet

Bluebook-at-a-glance
Increased — 12
Decreased — 366
Stable — 419

Values of a few model groups did increase. The Dassault Falcon 7X, Bombardier Challenger 604 and 605 as well as the Gulfstream G150 all experienced increases in value. All of the other models remained unchanged or experienced reductions in the reported average retail values. Prices of late-model, long-range, large-cabin models generally remained stable during this reporting period. One noted exception is the Falcon 50 series, which was down $250,000-$500,000 when compared to the previous quarter.

The Cessna Citation X also demonstrated lower values. Extra value can be added to a Citation X if the engines are enrolled in Rolls Royce CorporateCare. For other late-model, mid-range, cabin-class jets, such as the Cessna Citation 560 series, Hawker 800XP and Lear 45XR, values were unchanged for yet another quarter. Late-model light jets, such as the Cessna 525 CJ, and Hawker 400XP were down in value when compared to the previous quarter. For the most part, earlier-model jets were down. This segment will probably not see any future appreciation in values.


Turboprop

Bluebook-at-a-glance
Increased — 30
Decreased — 309
Stable — 277

AMSTAT reports that inventories of pre-owned turboprop aircraft listed for sale or lease and covered in Aircraft Bluebook grew by 1 percent. But overall, less than 9 percent of the total turboprop fleet tracked by Bluebook was on the offering table. Sales were average with values holding steady or slightly lower than the previous quarter.

Cessna Caravans were reported down an average of $25,000. The Cessna Conquest and DeHavilland Twin Otter were down $100,000. Fifteen-year-old King Air 90s dropped $100,000 while later models remained unchanged. Most of the King Air 350 and 200 markets had little or no change in values from the previous quarter. Late-model Pilatus PC-12s experienced modest gains. The Socata TBM 700 series remained stable.


Multi

Bluebook-at-a-glance
Increased — 0
Decreased — 509
Stable — 159

Well-equipped and maintained twin-piston aircraft are selling. Other piston-twins that are in need of maintenance and upgrades are taking more than 6 months on market to sell at discounted prices.

Beech Barons were generally down $10,000 when compared to the previous quarter. Values of pressurized Cessna twins also fell $10,000. Earlier-model piston-twin prices also dropped an average of $5000 from last quarter.


Single

Bluebook-at-a-glance
Increased — 184
Decreased — 1327
Stable — 897

No surprises in this segment. Like the piston-twin market, well-equipped and maintained singles continue to move, though evidence of lower values was evident when compared to the previous quarter. Activity was as scattered as a midday summer storm. Some dealers reported a noticeable lack of activity while others reported business as usual. Surprisingly, piston ag planes experienced some modest gains. Tail-draggers also demonstrated gains in value. The Cessna 185 and Piper Cub had modest increases in values when compared to last quarter. Cirrus, late-model Beechcraft, Piper and Mooney all experienced reductions in value in the single-piston category.


Helicopter

Bluebook-at-a-glance
Increased — 39
Decreased — 68
Stable — 835

Helicopter values remained consistent during the second quarter of 2008. Days on market continue to be limited for well-equipped, late-model helicopters. Values predominantly remain unchanged for the third quarter of 2008 as noted in the fall 2008 edition of Bluebook.


Aircraft Bluebook — Price Digest
and AC-U-KWIK around the globe

Please visit us if you are attending Jet Expo in Moscow, Russia, Sept. 17-19. We will be located with AC-U-KWIK in booth No. 136. At NBAA, Oct. 6-8 in Orlando, Fla., stop by and visit us. We are located in booth 1663. If you plan to attend MEBA in Dubai, UAE, Nov. 16-18, our booth number is 334. We look forward to visiting with you.

[Go to Charts.]


CHARTS — AUG. 20, 2008

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-ownership data for singles. The green line represents multis.

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

Total Market: Depicts change-of-ownership 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 SALES REMAIN STABLE DESPITE ECONOMIC UNCERTAINTIES

Vol. 20, No. 2 | June 1, 2008 | Go to Charts

 

Orders for New Aircraft Remain Strong

by Carl Janssens, ASA | Aircraft Bluebook – Price Digest

Seems like everywhere one turns these days, it is easy to cue in on the worst-case scenario revolving around the  depressed U.S. real estate market and the subprime mortgage scandal. Still, by official definition, the United States does not fit the mold that would indicate an economic recession has occurred. As Johnnie Cochran, the well-known defense lawyer once said in a high-profile trial, “If the glove doesn’t fit, you must acquit.” His statement would fit well with those who want to doom our economy to a recession.

Sure, the U.S. economy is currently working through some uncertain economic woes, but keep in mind these concerns will mend in time. This is easy to predict because the United States is still the land of opportunity and resources. And every time we pull a U.S. dollar bill out of our pocket, we are reminded that the nation recognizes a higher authority in its commerce. Printed on every U.S. dollar bill in any denomination: “In God We Trust.”

Jet

Bluebook-at-a-glance
Increased — 100
Decreased — 130
Stable — 565

New orders for corporate jets are at an all-time high. There are no signs of a slowdown. Orders are not being dropped as waiting lists for new deliveries continue to grow at record paces. The aircraft market does not reflect the uncertainties of the general economy. Why is this? As one aircraft dealer summarized at the National Aircraft Resale Association meeting in May: “Think of the industrialization the United States experienced last century. That’s what the rest of the world is going through now.”

For pre-owned jets, it has been business as usual in this segment reported by Aircraft Bluebook. Some of the notable changes in this market segment include early-model Cessna 500 series with $50,000 gains after a long run of nearly no movement. In the larger-cabin segment, Falcon 2000s generally were up another $300,000. There is no inventory for the newest Falcon, the 7X, so who knows what the checkbook will reveal should one come up for sale?

Ten-year-old and newer aircraft still continue to sell at record paces with minimal time on market.

Turboprop

Bluebook-at-a-glance
Increased — 44
Decreased— 65
Stable — 506

As one aircraft dealer noted, the current turboprop market is reflecting a normal economy. Inventories are stable, and interest in acquisitions remains steady. Aircraft Bluebook noted this stability. Prices did not show much activity moving in either direction in this reporting period. Of the few aircraft models that did see positive increases in value, the list was pretty limited to predictable models. Some King Airs, P180s and the PC12 all contributed. Declines included the MU-2.

Multi

Bluebook-at-a-glance
Increased — 4
Decreased — 135
Stable — 529

The multi market continued to be predictable. Well-equipped, low-time, late-model aircraft do not stay on the market long when offered in the resale arena. The same held true for earlier models that have low time and have recently been restored with upgraded avionics. The Aerostar was the only aircraft with noted increases, and even those were modest in the $5000-$10,000 range. In the negative, select models across the board were noted down several thousand dollars as well. Again, the majority of this market segment remained stable.

Single

Bluebook-at-a-glance
Increased — 223
Decreased — 148
Stable — 2033

The single market continued to hold its own during this reporting period. Several dealers reported record sales activity during the first quarter of 2008. With the single market most exposed to the effects of an economy that is slowing down, sales continued. Again, with the little movement in values reported by Aircraft Bluebook, gains and losses were minimal when compared to the previous quarter. The majority of the market held steady.

Helicopter

Bluebook-at-a-glance
Increased — 228
Decreased — 26
Stable — 676

Helicopter values remained strong during the first quarter of 2008. With manufacturers continuing to focus primarily on government contracts, the waiting list for new acquisitions continued to grow. Late-model helicopters with low component times are selling well. For turbine helicopters tracked by Aircraft Bluebook, gains were in the $50,000-$100,000 range with some of the elite twin-turbine class gaining several hundred thousand dollars when compared to the previous reporting period. Values for some Robinson models were down slightly from last quarter.

[Go to Charts.]