I’m feeling a bit guilty today for the long gap since my last blog entry. Several new projects have landed in my lap recently and I just haven’t had the time to write much. It’s kind of a shame that I find myself unable to get market updates out when times are the busiest, because that is probably when most of you actually want to hear from me.
Right now I am involved in some very diverse markets. This week I presented offers on a broad spectrum of aircraft for various clients ranging from less than $400,000 for a 25 year old Westwind to $45.0M+ for a G-550 that delivers in 2011. A few new listings came in this week on aircraft ranging from a 1994 model CitationJet to a 2009 model Hawker 4000. And several of our clients have been asking for value estimates on their current fleet and reasonable price estimates on various replacement aircraft. A broker in today’s business environment truly needs a wide understanding of the market as a whole as well as trends in all the different market segments individually.
In fact, I’m not sure I can give any kind of clear picture of the market as a whole. Many of the individual market segments that make up the market are moving in very different directions. Probably the best way I can think of to present the state of things is in graphical form. Since I don’t have the time or resources to graph the value of each individual market, I’ll borrow a graph from Aircraft Bluebook Price Digest. Following is their graph depicting the average price (in thousands) of the six 1990’s jets listed in the box.
Unfortunately, this graph draws from a pretty narrow range of aircraft, none of which were manufactured in the last 15 years. I think a better selection of aircraft would be something like: Lear 35, CJ1+, Challenger 601-3A, Falcon 2000EX, Gulfstream IV, Global XRS. That way, you would get the picture of a small, medium & large aircraft and see how year of manufacture is affecting each segment.
You couldn’t lump them all together like the above graph does, because the small upward movement in the newer stuff would simply cancel out the continued downward movement in the older stuff and you wouldn’t learn anything. The graph would simply have 6 lines that all took a big dip in 2008. The older aircraft would still be headed down, while the line depicting newer aircraft would either be flat or headed up depending on its size.
Maybe I’ll find some time to actually compile such a graph for my next blog entry. In the mean time, it’s just good to know that a computer glitch can’t cripple our market like it did the stock market on Thursday. I guess the latest theory on the cause of that dip is that computerized sell programs were triggered by the Greek debt crisis. Scary that so much of the world’s wealth is tied up in such a fragile thing. If everyone would just dump their equities and put all their savings in a safe asset like aircraft, just think where we would be. ; )
More next week (hopefully).
Toby J. Smith
JBA Aviation, Inc.