Transactions Increase While Values Decrease in Pre-Owned Market
Wednesday, January 12, 2011 - 10:55am
Trading in the pre-owned aircraft market continued at a modest pace as the third quarter came to a close and aligned itself on fourth-quarter activity for 2010.
Inventories available for sale grew slightly. Also noteworthy was the decrease of aircraft being sold with minimal time-inmarket exposure.
Days on market were significantly higher, which allowed a better opportunity to fetch maximum value in current market conditions. Time and condition also contributed to being a variable in the equation. Well-equipped, ready-to-fly aircraft had the largest audience of interest. Price competition remained limited. Sale prices continued in a downward trend or remained stagnant according the particular model group.
Several noted outside indicators have a relationship to the health of the pre-owned aircraft market. The General Aviation Manufacturers Association (GAMA) reported that shipments of turboprops and business jets manufactured worldwide were down when compared to the same time frame in 2009. Large fleet sales, such as those announced by Embraer recently, will have a future impact on pre-owned inventories when new deliveries replace current aircraft.
On other economic fronts, the $600 billion Federal Reserve
QE2 (second round of quantitative easing) has yet to be observed as an action that will create growth in the business aviation sector.
On related business fronts, brokers dealing with the sale of corporations and businesses are reporting more activity with transactions closing after a long drought. Opportunities to do business are again starting to flourish.
Single
Bellanca experienced some positive gains. Average retail prices for select models were up slightly from the previous quarter. See the Bluebook for details.
Select legacy Cessna and Piper singles also had minor increases
when compared to the previous quarter. The majority of the single engine market segment remained unchanged.
Light Sport
Values continue to soften in the LSA market, of the 60 models in the Aircraft Bluebook, about half were down $2,000 to $4,000 with the rest remaining flat with no change. Evektor had a significant downward trend in this book, largely due to the fact that Evektor prices their aircraft in Euros and the exchange rate is taken into consideration.
Carl Janssens, ASA & Chris Reynolds
Aircraft Bluebook-Price Digest®
9800 Metcalf Avenue
Overland Park, KS 6621
