Excellent Maintenance Quality and Record Low Ask Prices Offer Great Deals for Buyers
Greater Pricing Decline Expected During Q2 2017
Asset Insight today published its Q1 2017 issue of the Asset Insight Market Report (AI2 Market Report) covering the pre-owned business jet and turboprop aircraft markets. This Quarterly Market Report analyzed values for every production year of every modern make/model Business Class aircraft, and our March 31, 2017 maintenance analytics covered 92 fixed-wing models and 1,970 aircraft listed for sale.
- Market demand remains below average – except for Turboprops
- For sale fleet Asset Quality remains “Excellent” while average Ask Price reaches a new record low
- Ask versus final transaction value gap has not improved – buyers and sellers still have different expectations
- 90-Day Future Values trending lower and the rate of decrease is accelerating
- Maintenance Exposure (accrued maintenance for the inventory fleet) has improved to better than average for the preceding twelve months
- Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) worsening, increasing anticipated marketing time for many aircraft
Only 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.
While market demand remains steady, prices continue to fall, and data indicates that they will continue to fall, through Q2 2017. The silver lining is that the pre-owned business aircraft market has many excellent aircraft for sale for a very good value, presenting buyers an extraordinary opportunity.” said Tony Kioussis, president of Asset Insight, LLC.
Asset Insight’s proprietary Asset Grading System ProcessTM (AGSP) analyzed the average maintenance condition of jet and turboprop aircraft listed for sale as of March 31, 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.