USED AIRCRAFT MARKET: LIKE A GAME OF DARTS
A recent discussion with the principal of a car dealership got me thinking about the used aircraft market. In the automotive sales world, prices may be stabilizing (though dealers still add to the sticker price) yet there seems to be a fair level of uncertainty from month to month. So much so, I was told, that dealers are being really cautious with stocking inventory in fear of getting stuck with lots of overpriced vehicles should the market go for bust. That doesn’t seem to be the case with aircraft because brokers and salespeople tell me it’s still a brisk market, perhaps cooling a bit from where it was last year at this time, and it’s very much a seller’s market when it comes to piston singles. Plus, airplanes (the ones people want) don’t seem to be sitting around on sales ramps for long. To get a feel for buying patterns and selling prices, I caught up with Chris Reynolds at Aircraft Bluebook, who said predicting what might happen in the used aircraft market in 2024 is a proverbial game of darts.
Reynolds said the flight training market has driven a lot of the basic single-engine aircraft values, while the twin-engine piston market remains difficult to figure out because buying trends are all over the place and people use them for a variety of reasons. Many sellers tell me that Aircraft Bluebook values tend to be on the low side compared to the actual market and indeed that’s often the case. But understand that Bluebook is really a starting point in the valuation process and the publication gets data from a variety of sources, including large flight schools, aircraft brokers, financing companies and also end users who submit sales data on aircraft they’ve recently bought or sold. The biggest problem Aircraft Bluebook runs into when it comes to value analysis—particularly in a hot market—is that owner- operators tend to ask for selling prices that they think the aircraft is worth and buyers who want the assets badly enough simply pay it, even if that selling price seems outlandish. Reynolds said that what should drive value is time and condition.