It’s hard to believe that 5-years have passed since the initial crash of the preowned aircraft market. It was October 2007; at the National Business Aircraft Association (NBAA) conference in Orlando, Florida that many in our industry finally  acknowledged we have a big problem. In the course of 90-days pre-owned aircraft values were falling at a pace beyond imagination and most of the aircraft specific lenders just stopped writing loans on aircraft purchases. Lenders were unable to ascertain where residual values would level and therefore just pulled back. When the dust finally settled, used aircraft values had fallen anywhere from 40%-60% depending on the aircraft make & model.

By 2008, we saw the largest quantity of used aircraft on the market than any other time in history. It was a buyer’s  market like no other, if you were a cash buyer! Now after 5-years of recovery the pre-owned aircraft market looks very different in all but a few segments.

Piston Single & Twin
This market surprisingly has seen steady sales especially in the higherend models. This is not to suggest that the piston market is brisk, but it is steady. Nice, clean, well maintained aircraft with upgraded avionics have proven popular if the sellers are realistic in their price expectations.

Turboprops
The turboprop market has shown incredible stability. I remember 5-years ago when many predicted the death of the turboprop as a result of all the new VLJ’s that were being introduced. “Who would That clearly hasn’t been the case, turboprop values have held strong in some markets and the quantity of available aircraft has shrunk considerably in most current production turboprop models. Last December, 1313 turboprops were being actively advertised, today there are 1180. That’s an appreciable reduction.

Jets
This market segment has been just plain unpredictable. There are certain models of light/medium weight jets that have shown some strength and others that still show a steady decline (think Beechjet). Large cabin aircraft such as Gulfstream G550, Global Express and certain Falcons are seeing activity largely due to the incredible appetite of the Chinese market. Overall, the quantity of available inventory is either down or remains the same from the beginning of the year which in itself is an improvement.

One thing is for certain, 2013 promises to be an interesting year for private aircraft operators big and small. Bonus depreciation is soon to be extinct and the hopes of an aviation friendly elected administration have vanished. Our hope is that opportunist who have sat on the sidelines this past year waiting to see any sign of improvement will now dive  headfirst into using private aircraft to grow and excel in the new year!!

Banyan Aircraft Sales specializes in aircraft selection, valuation, negotiation, inspection and management of turbine  powered aircraft. Call Mike O’Keeffe to discuss your aircraft options 954.492.4331.

The Quest KODIAK lands at Banyan Air Service in less than 1000 ft.

Banyan is an Authorized Sales and Service Center for the KODIAK.

The Quest KODIAK departs from Banyan in 500 ft with 4 people on-board.

Michael Grana

Michael Grana recently joined Banyan Air Service as aircraft sales associate.   In his new role, he will be responsible for aircraft research and aircraft brokerage listings.

“We’re excited about Michael’s experience and enthusiasm and are thrilled to have him join our team,” says Michael O’Keeffe, senior vice president of aircraft sales.

Michael has an extensive background in the aviation industry.  He has five years of aircraft sales experience, has held several positions as a corporate pilot and has assisted in corporate aircraft management.  He is a commercial fixed wing and helicopter pilot with flight instructor ratings in single and multi-engine aircraft.  He also holds a type rating the Citation 500 series aircraft.  Besides his professional pilot ratings, he has a Bachelor of Science degree in Aeronautics from St. Louis University, with a concentration in Aviation Management.

“I joined the Banyan team because of its reputation as a company that values not only its relationships with its customers, but also the growth and development of its employees,” says Grana.

Banyan Aircraft Sales specializes in aircraft selection, valuation, negotiation, inspection and management of turbine aircraft.  In addition, Banyan is an authorized sales center for the Quest KODIAK.

Banyan Air Service based at Fort Lauderdale Executive Airport offers 24-hour FBO services, aircraft sales, heavy turbine aircraft maintenance, avionics, parts solutions, aviation store, on-line store at BanyanPilotShop.com and Jet Runway Café.  The company was established in 1979 and employs over 170 teammates.  For more information, please visit www.banyanair.com.

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Banyan recently attended several industry conferences along with some of the most respected aircraft dealers and financial institutions. The reports from these conferences were both encouraging and concerning. The encouraging news (for the dealers) was that aircraft sales transactions had increased appreciably during the first quarter of 2012. According to data released by the market information firm JetNet, pre-owned business jet and turboprop inventories continued to subside in addition to the “average-days-on-market”. Similar findings were reported by the research firm Amstat whose research revealed fewer aircraft available for purchase today than 1-year ago. This is a continuation of a trend we’ve also observed in our own inventories. These are simple trends that indicate fewer available aircraft will soon mean higher prices, or at best, sellers that are less willing to deal.

It’s been our observation that finding “great deals” in most of the various jet and turboprop markets is becoming far more challenging. Many previously cautious aircraft dealers have started purchasing aircraft again for inventory. Most of the dealers we’ve spoken with have reported a flurry of activity in the first quarter. These are all very encouraging signs and we can only hope it’s sustainable. We’re all wondering if this is just pent-up demand? Historically, aircraft sales have tracked closely with the stock market and this year is proving no exception. This trend appears to be applicable only to pre-owned aircraft. Ironically, new delivered piston, turboprop and most jet aircraft deliveries are all down. The large cabin jets are experiencing robust sales with Asia being a leading consumer.

The discouraging news came from the banking community. It seems that new regulations being enacted within the banking world will make it even more challenging or at least costly to finance private aircraft. The days of buying an aircraft with a small 10% down payment financed over 20-years are probably gone for good. Only the strongest of borrowers who don’t need the financing will qualify for those kinds of terms. Credit is available but the conditions need to be right. With the likelihood that credit will soon be tightening and used aircraft prices will be rising, now’s the time to buy!!!!

Banyan Air Service based at Fort Lauderdale Executive Airport has recently been appointed as a Quest Authorized Sales Center for the KODIAK.

“Banyan is thrilled to be appointed as the KODIAK dealer for the Florida region,” said Michael O’Keeffe, Banyan’s senior vice president of aircraft sales.  “This is a natural complement to our existing maintenance service capability for the KODIAK, and we are proud to offer complete sales and service under one roof.”

Florida is a strong market for the KODIAK for charter operators, small businesses, personal owners, skydiving operations, U.S. and international government, and humanitarian organizations.

The KODIAK’s rugged aluminum construction combines superior short take-off and landing (STOL) performance and high useful load.  It offers proven turbine reliability with the Pratt & Whitney PT6 turbine engine, has the ability to land and take off from unimproved surfaces and is capable of working off floats without structural upgrades.  The KODIAK can take off in under 1,000 feet at full gross takeoff weight of 7,255 lbs and climb at over 1,300 feet per minute.  A 3-panel Garmin G1000 integrated avionics suite including Synthetic Vision Technology is standard equipment on the KODIAK.

The KODIAK can be outfitted with an External Cargo Compartment, air-conditioning and even a Jump package making this a versatile cargo-hauling work-horse or comfortable passenger transport.

In addition, to having the KODIAK on display at the Banyan Air Service facility, a 12 stop airport tour is being planned.

Quest Aircraft Company is the manufacturer of the KODIAK, a 10-place single engine turboprop utility airplane, designed for STOL use and float capability.  Headquartered in Sandpoint, Idaho, the company was established in 2011 and began deliveries of the KODIAK in December 2007.

Banyan Air Service based at Fort Lauderdale Executive Airport offers 24-hour FBO services, aircraft sales, heavy turbine aircraft maintenance, avionics, parts solutions, aviation store, on-line store at BanyanPilotShop.com and Jet Runway Café.  The company was established in 1979 and employs over 160 teammates.  For more information, please visit www.banyanair.com.

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These are very interesting times for the pre-owned aircraft market. Many of the statistical reporting firms that monitor the pre-owned turbine aircraft market have reported that inventories of used aircraft are continuing to shrink.

As we monitor the turboprop, light and medium sized jet markets we’ve observed a more concerning trend. Our observations have revealed that only the nicest, newest and lowest time aircraft are actually selling. If an aircraft is the nicest aircraft in their respective segment it will sell reasonably quick and command top dollar.

Many aircraft have been on the active market for a considerable time and receive very little interest. This indicates there are buyers for pre-owned turbine aircraft but it better be nice and not over-priced!

What happens to a market when all the nicest aircraft are sold and it’s left with tired old high time aircraft? At some point the inventory will stop declining and what’s left will be stagnant old aircraft that are virtually worthless. It used to be those older aircraft found their way into other countries where they continued to operate for years. That’s no longer the case; Latin America no longer has any appetite for these aircraft, if it isn’t shiny and new they don’t want it. This also holds true for most of the European countries.

We are seeing several models of older jets that appear to have little value in any market. There’s a recent example of a beautiful Falcon 50 being dismantled and sold for its parts, the sum of its parts are worth more than the aircraft in flying condition. It’s hard to imagine great flying aircraft being dismantled and sold for scrap. This however might become the new norm for several older generation aircraft.

By: Michael O’Keeffe, Sr. Vice President Aircraft Sales & Management

Each day I’m reminded of the dynamic nature of the pre-owned turbine aircraft market.  Banyan Air Service, along with many aircraft dealers throughout the world has seen wild fluctuations within in the various segments of the market.  We’ll see a month where there’s tremendous sales activity followed by a month where all sales activity seems to stop for no obvious reason. Historically these fluctuations had a longer frequency but now it’s every month the cycle changes.

There was a time when the pre-owned turbine aircraft market closely followed the stock market.  If the market was trending-up, the sales of aircraft trended-up and vice versa.  While we’ve continued to see volatility in the stock market, the trend has been an overall improvement. This holds true with aircraft but only to a certain degree.  About the time we start feeling optimistic about a recovery of the aircraft market, some news or world event brings the momentum to a grinding halt.  Today, there are fewer quality, low time aircraft available than 1-year ago; that is a positive trend.  Prices however have not followed suit.  The demand seems to be model specific though.  There are a small handful of aircraft models that are highly desirable right now that last year’s price tag simply won’t buy. Maybe this is a function of the small quantity being advertised for sale?

Within every segment of the turbine market from turboprop to light, mid and heavy jet, there are many great aircraft available for sale; some even have great prices!  The nicest aircraft within each segment are selling and they’re selling quickly and commanding top dollar. This is encouraging if you’re a seller and discouraging if you’re a buyer.

View a list of the current aircraft inventory to see what is available at Banyan Air Service.

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Aircraft Sales has started a new series of postcards that will be sent out each quarter that shows a quarterly market update. We sent our first card out in the winter of 2010 for the King Air-Pilatus market and starting this quarter we will be sending out one for the Citation-Beechjet and one for the Hawker-Learjet market. These postcards are a summary of quantity for sale, percentage of the fleet, what was sold over the past 90 days and the average days on market.

Hawker/Lear Spring Market Update

This exceptional Citation SII recently completed an extensive Phase 1-5 inspection in July and all inspections are current and the aircraft has no damage history or logbook issues. The aircraft is substantially upgraded with a Garmin 400 WAAS certified GPS, Skywatch HP Traffic Collision Avoidance System, WX-1000E Lightning Strike Detection System, Garmin GMX-200 Multi-Function Display with Jeppesen Chart-View, Safe Taxi and XM Weather! The aircraft is equipped with a Keith Freon Air Conditioning System and Aft Baggage Modification.

The most unique feature of this aircraft is the Thrane & Thrane High Speed Broadband system offering high speed internet connectivity along with satellite phone capability. This new system offers worldwide connectivity previously only found in much larger business aircraft.

Please call Kristin Jolley anytime  at 954.492.3554 to discuss this Citation in more detail or visit www.banyanair.com to view additional aircraft in our inventory.