2004 Volume 4

MARKET LEADER™

Synopsis

General aviation is up and running again - after a brief pause for the electoral process. Activity, in most segments, is good, or at least improving. In regard to prices, comments are all over the place, ranging from, "Nothing available...can't find it at any price." to, "Market is saturated, can't sell it at any price." There is one common thread in this marketplace, however. Virtually 100% of the dealers and brokers we interviewed were optimistic about 2005. The reasons: The election swung the right way (and quickly) for most of us in the airplane business. Post election economic news, including the stock market, has been more good than bad. The war news continues to be a mix of horrible and terrible. But, so far the homefront has been spared. 

We had plans this quarter to list what's hot and what's not . On closer examination it seems that most airplanes fall into the 'it depends' category. It depends on aircraft condition and price. For example, if a Cessna 421 (or a Piper Seneca or a Falcon 10) is 'no excuses' and priced right, it will sell. Otherwise, there is little or no market for high time with a missing logbook.

Piston Singles

This end of the marketplace continues to be the most consistent. There is a steady demand for fixed gear, ready-to-go airplanes. What's Hot: Cessna Skyhawks from early '70s to about 1999 models, 180s, 185s, Piper Warriors, Cherokee 180s and Archers, Cherokee 235s and Dakotas , and Cherokee Sixes. What's Not Hot/It Depends Category: Beech Sierra, most Bonanzas, Cessna Cardinal RGs, 210s, T210s, most Mooneys, Piper Arrows, and Saratoga SPs. Again, we've seen some loaded, like new A36s, Mooney Ovations and Piper Saratogas bring top dollar, but it depends. Training, insurance and fuel costs have reduced the number of qualified buyers in the complex single (and twin) market. Also, activity can be sparse in some year models of some types making it difficult to know the real strength of certain markets.

• Tiger AG5B
• Beech Sundowner
• Early Cessna 172
• Cessna Fixed Gear Cardinal
• Cessna 180
• Cessna 185
• Piper Super Cub
• Piper Comanche 250
• Piper Cherokee 180

Piston Twins
There is no "What's Hot" group in the piston twin category. The surprising thing is, even with all the negatives found in this market - insurance, fuel costs, training requirements, looming ADs - piston twins with good pedigrees are selling. If there was a Hot segment it would be any pristine, low time airplane with a state of the art panel - regardless of type. Right now Beech Dukes, Cessna 414s, and other Twin Cessnas constitute a tough market. In the past year, availability has not changed significantly. According to Jetnet*, nearly 12% of the 58 Barons are for sale, down about a percentage point from a year ago. Almost 17% of the 58Ps are available, that's up from 15% a year ago. More than 15% of the Cessna 421Bs, and over 19% of the 421Cs are on the market, both up from a year ago. However, if it is low time, no damage, fresh RAMs, and a glass panel - you've got a deal. Beech 55 Barons, late model Cessna 310s, early model Piper Seneca IIIs, and Aztecs are a real bargain when compared to their single engine counterparts, and are clearly in greater demand than cabin class, pressurized twins.

Turboprops
There is definitely a "What's Hot" group in the turboprop segment, and it's practically the entire group. Late model Beech King Air C90Bs, B200s, 300s and 350s are up again and continue to be red hot, especially if they are ready for service today. Brian Ridgley of RidgeAire in Texas said it this way, "Values have stabilized. Buyers will pay top dollar for airplanes that are worthy !" Prices are edging up on most turboprops despite a slight increase in availability from one year ago. According to Jetnet, almost 8% of the B200s are for sale. Last year, less than 7% were available. Just over 10% of the Conquest IIs are on the market, up from 9% a year ago. Even with the very light jet market debut just around the corner, there is no downward pressure on existing turboprops.

Jets
Late model - or easily passes for a late model - that is "What's Hot" in the jet market. There are a few types that are scarce to just not available. Falcon 2000s, 900Cs and 900EXs, and the Bombardier Global Express each have 1% or less of the fleet for sale - that's a tight market. In other, more normal markets, early Beechjets are selling and prices have moved up. Most of the Cessna Citation market from the CJ, the SII on up to the VII, are strong. Price increases ranged from $50,000 on CJs and Bravos to $200,000 on Citation VIIs. At opposite ends of the Citation market, Citation 500s, Is, ISPs, and Citation Xs - it's flooded - no upward pressure at this time. Challenger 604s, Falcon 50EXs and Astras all posted big gains again this quarter. The only thing better than a late model is a scarce late model. If late models (or airplanes restored to near new status) are hot, it's easy to discern what's not: Any combination of turbo jet, stage 2, high time, damage history, no RVSM, cosmetically challenged, or mechanically deferred airplane.

11/03 11/04 11/03 11/04

Chall 601 3A 17% 10%

Citation II 17% 20%

Citation III 18% 21%

Falcon 50 14% 15%

Falcon 900B 20% 11%

Gulfstream IV 11% 7%

Gulfstream IVSP 5% 6%

Westwind II 23% 19%

Hawker 800A 17% 15%

Hawker 800XP 6% 5%

Lear 35A 16% 16%

Lear 60 11% 12%

*Jetnet can be reached at www.Jetnet.com .

Occasionally we get calls asking us how much to add for Collins ProLine on a Citation II or how to add for a 3-light marker beacon panel on a Piper Navajo. The answer is - You don't! Just about every Citation II has ProLine, every piston twin has marker beacons (or should), and every airplane should have basic things such as a transponder and shoulder harnesses. The basics are not add ons. Appraising any airplane is a complicated process requiring at least some experience and judgment - in other words, some smarts. Beware of anyone who tries to add value for an ADF in a Falcon.

©2004 by Vref Publishing, Inc. All Rights Reserved.

Past Articles:

• Vref 2003 Volume 3
• Vref 2003 Volume 4
• Vref 2004 Volume 2
• Vref 2004 Volume 3
• Vref 2004 Volume 4

For more information about how we can satisfy your aircraft needs, please contact: sales@aircraftinvestmentgroup.com