Bluebook Perspectives: Pre-owned Market Sends Mixed Signals Throughout Industry

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For current generation business jets (turbofan, EFIS, FANS capable, etc.), we’ve taken a random sampling representative of the medium- and long-range category aircraft.  Nearly the same percentage of the available fleet (~10 percent) is on the market through December 2013 as was at the end of 2012.  In the case of the GIV, Challenger 605 and G550, the percent increase/decrease was negligible.
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Bluebook Perspectives - Value Retention In Today's Market

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By Dennis Rousseau | President and Founder | AircraftPost.com

There has been conversation and many questions over the last few years relating to residual values, value retention, value as a percentage of cost new, values coming back, et al. For years, our industry used a 3 to 4 percent annualized depreciation schedule to gauge future values for business jets. Due to the fact our business was in its infancy, we did not possess formidable history to determine the validity of the schedule. When we buy-in to the fundamental assumption that aircraft are depreciating assets with a 30-year life cycle, most business jets will reflect an average midlife (15 years) value retention of 50 percent, when compared to the original cost new.  

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YTD Pre-owned Transactions & Prices Continue Down

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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.
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BLUEBOOK PERSPECTIVES

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Thumps & Bumps in the Pre-Owned Market

Vol. 26, No. 2 | June 6, 2012 | Go to Charts
by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

Optimists see the silver lining behind the cloud while the pessimist only sees the cloud. Optimism continues to be the silver lining in the pre-owned aircraft market. However, reality of the dark cloud dictates an awareness and calculated approach.
Such are the conditions in the current ever-evolving pre-owned market. For the most part, the glory days of aircraft values being treated as premium investment opportunities are now nothing more than a faded memory. Knowledgeable buyers and sellers are keenly aware of this. Change of ownership continues at a slow to steady pace while values for the most part show continued depreciation. The exceptions are late model long range executive business jets.

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Disparate Pre-Owned Aircraft Markets Emerge

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Why does the pre-owned market appear to be good, bad and confused? The answer is the closed traffic pattern around the economy. As the recovery stumbles along, confidence remains shaky. We can’t break out of the pattern.
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Business Aircraft Market Recovering Despite Economic Woes

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While doubts persist about the United States in an economic recovery, the business aviation sector is not following suit. For instance, late-model, large-cabin, long-range aircraft are selling at or above values published in the Aircraft Bluebook.
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Aircraft Bluebook's Chris Reynolds Becomes Accredited Member of ASA

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Aircraft Bluebook–Price Digest and AC-U-KWIK Aircraft Appraisals analyst and associate editor Chris Reynolds has become an accredited member of the American Society of Appraisers.
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Pre-Owned Aircraft Transactions Increase While Values Decrease

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There should be some optimism in our industry. Buyers and sellers are coming to terms with what the market will bear for a given aircraft. And with that, the pre-owned aircraft market is seeing more completed deals. The gridlock of available inventory is starting to show some movement. Values on the other hand remain soft with little signs of recovery.
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Used Aircraft Market Shows Signs of Better Days Ahead

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Finally, the pre-owned aircraft market moved in a positive direction in the first quarter of 2010. Late-model, large-cabin, long-range aircraft were selling at or better than values published in the Aircraft Bluebook.

External factors such as increased sales, a slight decline of available inventory and world market competition could all be considered causes for the improvement. Although this early indication of a slow recovery is in progress, it is too early to celebrate. Any positive sign going forward is far better than where the used aircraft market has been.

With the exception of the late-model, large-cabin class, most of the other business aircraft are not yet recovering in value. The good news is that values are showing more stability. Market activity is on the rise leaving a more optimistic perception that values are not exposed to the risks experienced in the last twenty months.

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