Fletcher Aldredge is publisher of the Vref Aircraft Value Reference, the industry’s modern price... Read More
Gulfstream G200 Jet
Most brokers and dealers had a good first quarter in the bank and aircraft are selling, notes Vref’s Fletcher Aldredge. A few, however, are reporting sluggish sales but aircraft sales activity is increasing. Here’s the lowdown…
Is the Business Aviation market still crazy after all these years? We don’t think so. This marketplace, perhaps even the larger economy, looks about as normal as possible considering the lack of unbridled lending and unbridled spending.
That is, word for word, the opening paragraph of the 2012 Q2 Vref Newsletter. So lies the million-dollar question: is this the ‘New Normal’?
Yes and no. Without any significant economic changes, this is normal, but it hasn’t been “new” for quite some time. Normal is now, and has been for a few years exceptionally price driven. Let’s take a look at the markets.
The turboprop category, generally, is relatively flat with essentially no change over Q1 2016. Only a few have experienced a moderate weakness but remain generally solid.
Buyers will always be there at the ‘right price’. The price of any aircraft is determined by what someone is willing to pay (thus, free market). There are plenty of airplanes for sale and prices won’t be better than this for a while. Many are ripe and ready to pick—grab one and get off the ground.
They are still burdened with heavy top down pressure on these fantastic machines. Many jets, new and used, are being sold this year, but discounts are prevalent.
Most brokers have a solid start on 2016, equal to 2015 and some even better than 2015. Price is the one driving force that is still haunting us all. To put it another way, the trend is not your friend (unless you are a buyer). This continues to be a favorable time to buy. See our Best Buy Table.
Best Jet buys are calculated solely on the amount of discount since new (heavy discounts have been already taken). Many other factors should be considered in determining your own favorite Best Buy. Your Best Buy could be a big discount, or maybe you prefer a large residual value. Any way you slice it a bargain can be had – you decide what airplane might serve your needs best.
How about this best buy example? A 1978 Hawker 700A with MSP and new interior had a new list price of $3,700,000. Currently, it is listed for sale at $450,000. That’s only 12% of new!
Obviously times and condition have a lot to do with declared value, but there is much opportunity in this anaemic economy. Speaking of economies, there is little change to report. Even at a mere 2.4% growth, however, the US continues to be a shiny penny in the global economy.
Airplanes aren’t toxic: it’s not about you. So don’t hold your breath, and do not hold your nose. Buy an aircraft. Begin the euphoric pride of ownership to go where you want, when you want, if you want.
The take-away from the recent NAFA conference: Guard your identity, don’t mess with customs authorities, and expect 2016 to be the same as 2015 (give or take).