24 Month Aircraft Sales & Acquisition Data

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24 Month Aircraft Sales & Acquisition Data

Posted by Randy Africano on Mar 19, 2018 7:56 am

As some of you may know, I have been doing aircraft acquisitions for folks for many years and the bulk of those acquisitions involve Beech Bonanzas and Barons. I would like to think that I know a bit about the airplanes but even more important, I know the market. So I wanted to share a few things with my fellow aircraft owners that I’ve noticed over the past 24 months. My hope is that you can put this information to work for you when it comes time to buy or sell an airplane. These “factoids” are based on my personal experience and may not represent what others are seeing. 

Sale price compared to book – With one exception, the aircraft that I have acquired for clients over the past 2 years have all sold for less than book retail as defined by the Aircraft Bluebook. As a generalization, the average sale price of the aircraft I’ve acquired has been at book wholesale plus 25% of the difference between book wholesale and book retail, again based on the Aircraft Blue Book.

Disparity between Ask and Sale price – In the last 24 months I have purchased 16 aircraft for clients, all of them Beech except one. The difference between the asking price and the actual sale price has ranged from between 24% and 40% less than the asking price with the average sale price 30% less than asking price. Don’t be afraid to offer a price that might seem low. 

Days On Market – Using data from 2010 through 2016 from Aircraft Dealer Network, the average Days On Market (DOM) for a Bonanza should be about 8 months (242 days) but if your aircraft is not priced appropriately, you can expect that number to increase, in some cases to 3 years or more. If you’re not getting calls on your airplane, make sure that it’s priced to fit the market.

What’s Selling – The airplanes that have remained on the market for the least amount of time are well kept, no excuses airplanes that are priced fairly. “One off” flawless aircraft are still garnering premium dollars and we recently acquired a 1979 “everything new” V35B for a client at $200K. If you are looking at an average airplane with an engine above 1,200 hours SMOH, sellers plan on a deep discount if you want to get the market’s attention and buyers consider the value of the airplane after an engine overhaul before you make an offer.

Ask Price –When it comes to the asking price for your airplane, consult with your broker and engage his or her expertise. If you have a highly unusual airplane for sale (all glass panel, fresh or low time engine, exceptional paint, interior and mods) I can almost guarantee that the airplane will sell above book retail because these airplanes are not “book” airplanes and are almost impossible to find. On the other hand, if your broker suggests a ask price on your airplane that is less than you expected, don’t be offended. They are only trying to give you their best estimate of what they believe the airplane should sell for in the current market.

Sales Commissions – Over the past 24 months, several people have lamented that they’ve been quoted upwards of 9% commission to sell their airplanes. I don’t know if this is a fair price or not but most brokers I work with sell an airplane at a 6% commission, and that rate often drops as the sale price increases. 

Waiting For the Market Turnaround – Over past 2 years, I have had a few potential sellers tell me that they were offended by what they considered a “lowball offer” for their airplane, despite the fact that the offer was backed by hard data. Some have gone on to say, “If this is the best I can do, I’ll just wait for the ‘market to turn around’.” Well, here is the reality of the GA market as it stands today based on numbers from the FAA and from General Aviation Manufacturers Association (GAMA):

• US private pilot certificates issued – 1978 to 2015 – down 72%
• Active US pilot population – 1980 to 2016 – down 29%
• Active US private pilots – 1980 to 2016 – down 55%
• Active US piston aircraft – 1996 to 2015 – down 8%
• Piston aircraft hours flown – 1980 to 2015 – down 63%
• Hours flown per aircraft – 2000 to 2015 – down 30%
• Piston aircraft fuel consumption – 2000 to 2015 – down 46%
• Average age of the US pilot – 1993 to 2016 – Up 9%
• Average age of US piston aircraft – 2007 to 2015 – 22%

Back in 2010 the average age of the ABS aircraft owner was 64 years, which is almost 20 years older than the average pilot today (45.3 years). I cannot say with hard data at what age the average aircraft owner sells their airplane and stops flying but suffice it to say that one can easily predict, with certainty, that a market glut in used aircraft is on its way based on the current GA metrics listed above. Furthermore, a sitting airplane is costing an average $600 a month and if its not being flown, losing its appeal to a potential buyer.

If you are looking to put your airplane up for sale, price it based on fact and not on emotion. What you paid for it, what you have in it and what you’ve done to maintain it has little, if anything, to do with what the airplane is actually worth. A good and reputable broker will tell you the same and it will behoove you to heed their sage advice lest your sales transaction languish and your experience fall short of your expectations.

I hope you find this information helpful. Comments are always appreciated.
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Re: 24 Month Aircraft Sales & Acquisition Data

Posted by Arnold Minear on Mar 26, 2018 8:56 am

Thank you for taking the time to provide this information.  Very good info. for someone looking at buying or selling.