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Bombardier Learjet 60XR jet
Vref’s Fletcher Aldredge offers an assessment of the depreciation trends in 2008-model helicopter, piston, turboprop and jet aircraft to highlight the way of the used aircraft sales market at Year-End 2016…
In our 2016 year-end wrap-up (see Table A), you might notice a pattern: The first five aircraft on the list are all single-engine Piston. The bottom 19 is comprised of turbines.
While the above table includes only 2008 model year aircraft, as always it is also important to remember that each serial number is unique. There are too many variables to consider all in one chart. For example, a non-standard interior in a large cabin jet for sale can make a difficult market seem impossible. There are several noteworthy items the Table presented, however, including:
• Three models increased in value over the last year, including the Cirrus SR22, Diamond DA-40 and Cessna 172S.
• There are 11 models that have held a steady value, most of which are piston aircraft.
• The next group includes a diverse mix of aircraft - there are 18 different aircraft that have lost 1–5%.
• There are 13 aircraft in the category that have lost 6-10% in value.
• Bringing up the rear is the G550, which lost 22% in the past year and a total of 54% since new (still not terrible when considering that is an average of 6% per year).
The percent of ‘New’ represented in the Table is a comparison of the original MSRP in 2008 to either Q4 2015 or 2016 Vref used retail price. If we were to consider only the percent of New from Q4 2016, there are a total of 19 different aircraft that are still 60% or greater of their new value, meaning that these 19 aircraft are depreciating at a nine-year average of less than 4.5%.
Twelve other aircraft are depreciating at a 9-year average of less than 6% - considering that these are all nine years old now, that’s not too shabby. The Quest Kodiak takes the number one spot at 87% of New, while bringing up the bottom of this category is the Learjet 60XR at only 25% of New.
The reality is that we don’t buy new or used aircraft for sale as an appreciating asset. Of Course, there are always going to be a few that will surprise us and trend up, but for the rest of us a steady market would be a cheerful improvement. This is the “(not so) New Normal”.