Used Aircraft Prices

Aircraft Bluebook and Vref both do a good job covering many issues that affect assessment, add-ons, value differentials between aircraft years, as well as effects on damages and bad cosmetics.

However, each release fights to record the actual value of the basic aircraft. They both reported on the basis of aircraft sold in the previous three months. Gathering sufficient insights from every single one of these quarters provides a very unforeseeable indicator in this phase of recovering rock, when the number of selling deals remains weak. Reading about new aircraft shipments every months, our sector tries to relativise the value of the used vehicle sector in our fleets.

In contrast to many other sectors, our sector does not have a data collection point that records the true selling prices. Property and even used vehicles are followed closely. In our business, speculative, hearsay as well as non-disclosure arrangements affect our sector, preventing purchasers and vendors from being willing - or even interested - in changing selling prices.

Makes us guess what the right selling or buying cost is for an aircraft. For the most part, new aircraft supplies are pursued by producers fixing their basic retailer prices for a new aircraft. Apart from a few small discounts when buying from the aircraft maker, the valuation match begins when the aircraft arrives at its first owners.

We have all used a 3-4% per annum ratio as a fairly precise remaining claims ratio in the past of our sector. Taken together, our sector understands that a more plausible figure in the first year should be up to 10%, then up to 7-8% for each year.

How do we test this as an industrial company? Each of us can use examples of aircraft for which we have complete control of the selling prices. Get the sale value and do the math: - Look at one of the report logs and look at the initial "new" shipping cost; - subtract 10% from this figure for the first year; - subtract 7% from the remainder yearly until you achieve the ongoing year.

And how near is this number to the real selling cost you really believe? And if the lost percentage seems too high, go to the sixth year and cut it down to five per cent a year, subtract that amount and then charge it for the next year. I feel that such an approximation brings you either directly or very closely to the real selling point.

Make sure that you do not use the bonus prize to determine the daily value. This bonus was cancelled on one single date from the first re-sale of the aircraft after the initial bonus sale. We as an industrial sector have been loaded with imprecise information about prices for far too long.

As we have more sales of aircraft in iteration, it becomes more challenging to determine the remaining value. The use of an undervalued remaining losses ratio only makes an already complex computation more cumbersome. Unless vendors can rely on inputs to determine what number to charge as the sales asking price (or even more importantly, what number to accept), and purchasers do not know what number to rely on as the sales asking price, no significant deal of purchasing and sales can gain momentum.

After 2008, the time in our sector was full of bad starters. Perhaps the need to work tougher and more intelligently than ever in the annals of our business is a good thing. to enter this big business.