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Aircraft Bluebook-Price Digest - Market PerceptionIs Key to Current Aircraft Values

With the warm rays of the summer sun approaching, the current economic condition of values for pre-owned aircraft is anything but sunny. The aircraft market has suffered its greatest loss in value since the corporate jet became a part of American enterprise with its introduction in the 1960s. As with any commodity traded in a free market, one that is not restricted or regulated by government controls on pricing, the core element of value is in human perception. For aircraft values, perception of worth is always on the leading edge of value.

The perception of value has been embedded in the general and corporate aviation market since its beginnings. Reflect for a moment on the case of a damage event to an aircraft. At the mere mention of the word damage, the market reacts in an aggressively negative manner. Depending on the market conditions and the nature and cure of the damage, all of these variables will impact perception of value. In an average and stable market, a whole tier of potential buyers will not even consider an aircraft with a damage incident. They just don’t want to deal with the stigma and risk in value for owning such an aircraft when there are normally other similar, undamaged aircraft available for ownership as well. And those knowledgeable buyers who do consider the prospect of ownership of such an aircraft with damage history will want to be compensated for their risk, usually in the form of a discount in price in an average market. An aircraft cured from a damage incident will be restored to a condition of airworthiness that is equal to if not better than its original condition prior to the damage incident. It is not a question of condition or safety but only of market perception that will negatively impact value.

Such is the case in the current state of our economy. The economy has been damaged. No need to point blame anywhere. We all are members of the same human race. Embedded in this damaged economy is the aircraft market. With credit scrutinized and inventory overabundant, the free will and intellect of a rational human being (aka common sense) would naturally offer something significantly less for an aircraft. The market conditions themselves yield to a severely reduced perception of value.

On the sunny side, perception is fluid. The dynamics of today’s market are subject to change. Heads up for buyers: Bargain values may not get any better. Now is the time to buy.

For the most part, values dropped across the board in the twin-piston market. Later-model Beech Barons and Cessna 421s were off $20,000. Earlier models were down $10,000. The Diamond Twin Star saw a $50,000 loss in value. The factory-equipped and unresolved Thielert engines could cause further diminished values. Piper Seneca Vs were down in the $40,000 range, and earlier models were generally down $10,000.

Agriculture planes continue to hold value. Early models, late models, pistons and turbines all held value mainly due to the higher demand for these aircraft. American Champion aircraft were down anywhere from $1,000 for some early models to the $5000 range for later models. For 1995 and later models, the Beechcraft Bonanza A36s were down $30,000 or more. Late-model Cessna 172s, 182s and 206s all experienced reductions in the reported average retail column in the $10,000to-$20,000 range. The former Columbia also saw value decreases consistent with other late-model Cessna singles. Diamond Aircraft were no exception. Average retail values were down an average of $10,000.

Carl Janssens, ASA
Aircraft Bluebook-Price Digest®
9800 Metcalf Avenue
Overland Park, KS 66212
 

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.

Light Aviation Edition July 2009

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