Vol. 26, No. 2 | June 10, 2013 | Go to Charts
IN THIS ISSUE
Bluebook Perspectives: YTD Pre-owned Transactions & Prices Continue Down
Into the Blue: Aircraft Bluebook At-a-Glance, Cessna 177 Cardinal Series
Ask Aircraft Bluebook: Where can I find the Aircraft Spec Charts and other infomation formerly in print?
YTD PRE-OWNED TRANSACTIONS & PRICES CONTINUE DOWN:
By Dennis Rousseau | President and Founder | AircraftPost.com
When viewing a random selection of pre-owned transactions for the first 5-months of 2013, the number of sales are trending down 15 percent when compared to the same period in 2012. Actual selling prices also are down on average 15 percent, while inventory levels for the same group of business jets has increased 20 percent.
As you consider these facts we must also take into account other mitigating factors, such as the year of manufacture of the aircraft sold, cost of the aircraft when it was new, the cost new today, as well as nominal depreciation, et al. By way of example, an aircraft that sold new in 2005 for $44 million and today sells for $32 million is not too far off of a 4 percent per year depreciation schedule. From another perspective, it has retained 73 percent of its original cost , which falls in line with a 30-year useful life.
A number of factors continue to affect growth and stability in our industry – some are geopolitical, others are related to the global financial debacle that started in 2008.
Within our industry, where 250 aircraft were once considered a standard production run, we now have 400+ that will eventually compete in the pre-owned market. Therein in the case of ‘over-production’, we face dynamics that were once not a factor, such as eroding residual values. As the business jet fleet ages and pre-owned inventory increases, will pricing continue to erode? What effect will new aircraft pricing and shorter delivery times have on the pre-owned market?
Aircraft Bluebook – Price Digest here for you
Please contact Aircraft Bluebook if you have any specific concern 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 913-967-1956.
CURRENT MARKET STRENGTH
CMS represents an aircraft’s current strength in the market. An A+ rating indicates the aircraft is enjoying a very firm market. Prices for an A+ aircraft are steadily rising, and holding times are very short or nonexistent. At the opposite end of the spectrum, a C- aircraft is one experiencing a very soft market. Its price is commonly discounted, and it often sets on the ramp in excess of eight months before selling. It is important to remember that Current Market Strength is not a forecast. It is valid only at Marketline’s effective date of release.
All of the listed aircraft have a composite score that is presented in the Used Aircraft Market graph. Data points are represented in relationship to the respective new delivered historical price that is equal to 100%. The measure of change is reported in the actual percentage of value in relation to new. The delta between reporting periods can be concluded as the percentage of change.