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« AIRCRAFT BLUEBOOK–PRICE DIGEST ATTENDING NAFA MEETING | Main | CHARTS — FEB. 18, 2009 »

BUSINESS JET BUYERS, SELLERS DON'T AGREE ON VALUES

Vol. 21, No. 44 | Feb. 18, 2009 | Go to Charts

by Carl Janssens, ASA | Aircraft Bluebook — Price Digest

What else can be said that hasn’t already been analyzed, scrutinized and editorialized with regard to the state of the U.S. economy and business jet sales? Nothing! To sum up, jet sales are no longer in a cool-down mode. This industry has been pickled.

While President Obama seeks a silver bullet for the economy, there aren’t any handouts in store for aircraft OEMs. Unlike its automotive brethren, the business jet segment has not been offered an economic recovery parcel. There is not even a crash cart with paddles waiting. We’re on our own.

Looking at the few jet sales that occurred in the final three months of 2008, it is interesting to attempt to identify the types of transactions. Are the sale prices considered fair market values, or are they more along the lines of distressed liquidation values? It depends on the side of the bargaining table. For the seller, chances are the distress in the negotiated sale price has to do with some urgency to liquidate the asset. On the other hand, the buyer who is the end user will argue the sale price is fair market value because he would not be willing to pay more for the aircraft.

With too many buyers and sellers still riding the fence, it is hard to know what to call the sale. One thing is certain: If the present economy is our OK Corral, it is getting close to high noon. With the showdown at hand, one side or the other will be the first to break leather. After the smoke clears, everyone will know who the winner is. Time will tell.

Jet

Bluebook-at-a-glance
Increased — 0
Decreased — 563
Stable — 262

Little surprise for the jet market tracked by Aircraft Bluebook: No aircraft in this category experienced gains in value. Most models of every jet manufacturer experienced yet another quarterly loss. Large-cabin jets such as the Bombardier Globals, Falcons and Gulfstreams continued the downward trend. Even before the ink dries, values of some models continue to fall.

The Cessna Citation X and Sovereign were examples of the few jets that, for the most part, had no decreases in values when compared to the previous quarter. This was the case for select Hawkers and Learjets as well.

Turboprop

Bluebook-at-a-glance
Increased — 6
Decreased — 209
Stable — 415

Socata and Pilatus generally kept the turboprop market stable for another quarter. Most of the decreases in value for other turboprop manufacturers were kept to a modest 3 to 5 percent reduction when compared to the winter 2008/2009 Bluebook. The turboprop market might have received a slight bounce from jet operators scaling back to jet-prop-driven power.

Multi

Bluebook-at-a-glance
Increased — 1
Decreased — 178
Stable — 494

Late-model twins continued to bleed off value while the majority of early-model aircraft remained stable. Late-model Beech Barons and Piper Senecas were down in excess of $30,000. Well-equipped reconditioned aircraft, such as the Lock & Key Piper Chieftain, still command a respectable value when returned to the resale market.

Single

Bluebook-at-a-glance
Increased — 163
Decreased — 512
Stable — 1786

Ag planes kept a positive note in the single category. Select models experienced modest increases. Late-model aircraft generally experienced decreases in value. Beech Bonanzas were down 4 percent, and Cirrus experienced a 3 percent loss when compared to the previous reporting period. For the most part, 20-year-old or older aircraft remained unchanged when compared to winter 2008/2009 Bluebook values.

Helicopter

Bluebook-at-a-glance
Increased — 4
Decreased — 174
Stable — 814

Helicopter values appear to have reached a plateau. With only a minor increase in early-model Eurocopters, the majority of values remained stable when compared to the previous quarter. Most piston-powered ships as well as some single-engine turbines were in the loss column.

Aircraft Bluebook — Price Digest here for you

Please contact Aircraft Bluebook if you have any specific concerns 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 913-967-1913.

[Go to Charts.]

 

Reader Comments (5)

Many may see this as gloom and doom. I choose to see this buyers market as an opportunity to enter the market a very comfortable level. It’s time for the air taxis operators to upgrade their fleets and add equipment without having a large monthly payment. Private individual can enter in aircraft they would have not been able to afford 6 months ago. Corporation need to acquire equipment to seize market opportunities around the globe especially those in cities that the airlines have cut service.

February 23, 2009 | Unregistered CommenterIvan Klugman

Carl:

Hope this finds you well. Along with you, I continue to be heavily involved in the jet appraisal business. I am finding that there really is no fair market market value at the moment. I enjoyed your jet assessment, but I find there are only stressed prices that are seeking a 60 cents on the dollar level from values realised at this time last year.

I like Ivan Klugman's positive attitude. If the credit market ever eases up (maybe next year), sales will pick up and purchases can be made.

Cheers,

Stephen J. Coonan, ATP
www.planesworth.com
877-266-7791

February 23, 2009 | Unregistered CommenterSteve Coonan

It is not about gloom and doom or buyers market, it is about hurting the emotions of the citizens company like BJets has already created this huge wall and differentiated the segments as luxurious and non luxurious. In this recession where people are struggling for their survival……… then comes this kind of luxury product? Where is the world going? No wonder the BJets employees also behave the same way and treat the PA’s as [edited out]. There is a dark side to Business jet aviation also……

April 6, 2009 | Unregistered Commentervertika

The conversation is welcome, but just wanted to give a reminder to keep the language family-friendly

There is no fair value market for anything. Until the economy turns arounds JETS as well as home prices will have a wide range or prices and offers.

Silver Buyers</A>

June 27, 2010 | Unregistered CommenterJohn Ravics

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