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.