While the demand for
pre-owned business jet and turboprop aircraft remains unchanged,
record low prices are enticing value-focused buyers to act,
according to Asset Insight’s Q2 2017 issue of its Asset Insight
Market Report (AI2 Market Report).
Turboprops and small
jets lead the list of aircraft in demand with this Quarterly Market
Report analyzing both the value and maintenance exposure of 92
fixed-wing models and 1,881 aircraft listed for sale. Other trends
the 14-page Quarterly Market Report include:
- For sale fleet Asset Quality
remains "Excellent", while average Ask Price reaches yet another
new record low.
- Ask versus final transaction
value gap posted a marked improvement for all four aircraft
groups with small jets posting the best/lowest differential at
8.0%.
- 90-Day Future Values are
decreasing slower than Q2 values with large jet values expected
to fall 56% slower in Q3.
- High quality assets trading
have worsened the Maintenance Exposure by 1.9% over the past
three months.
- Maintenance Exposure to Ask
Price Ratio ("ETP Ratio") did not improve during Q2, once again
increasing the anticipated marketing time for many aircraft.
"With record
low ask prices and excellent maintenance quality, the pre-owned
business aircraft market in Q2 2017 offers great deals for buyers
that are motivated to purchase either business jets or turboprop
aircraft. The available inventory, while posting a notably smaller
pricing decline, signals that pricing is beginning to stabilize,
while market demand for all categories of business jets and
turboprops remains steady," said
Tony Kioussis,
president of Asset Insight, LLC.
Exclusively available
from Asset Insight, the AI2 Market Report includes eTrendTM, a
90-day forecast for aircraft value by make and model. This tool is
especially helpful to sellers who are evaluating offers on their
aircraft while concurrently considering if their prospects are
likely to improve.
Statistically, Asset
Insight's eTrendTM forecasts are based on some of the most robust
data analytics in the industry and have been thoroughly back tested
to confirm a significant degree of accuracy. Asset Insight's
proprietary Asset Grading System ProcessTM (AGSP) analyzed the
average maintenance condition of jet and turboprop aircraft listed
for sale as of June 30, 2017, (Source: AMSTAT) to generate the AI2
Market Report.
The AGSP derives the
Asset Insight Index, whose components are the Maintenance Rating,
Financial Rating, and Asset Exposure Value. Dividing the Asset
Exposure Value (an aircraft's accrued/embedded maintenance) by the
aircraft's Ask Price derives the Asset Exposure to Ask Price Ratio (ETP
Ratio) - a quantitative view of the aircraft's current
marketability. The AGSP is based on proprietary algorithms that
examine current age, flight hours and cycles on an aircraft's
systems and major sectors - airframe, engine(s), propeller(s), APU,
paint, and passenger interior - as well as the typical cost to
repair or replace parts with no defined life.
Download the full Q2 2017 Report |