As June quickly approaches, this summer will be a bridge to recovery for the pre-owned aircraft market. Buyers and sellers have been oceans apart for most of the spring, but this summer should provide a clear shift in the tides. If buyers continue to lack vitality, the more eager sellers will have no choice but to reduce their price to meet demand. On the contrary, if the economic outlook appears bullish then it will be the buyers that cross the imaginary line sooner. The moment is quickly approaching as to which side flinches first.
In our normal day-to-day operation, we routinely study sales data to evaluate a client’s true aircraft value. Recently, a client asked me what their aircraft might sell for in the next few months. Data collected by our in-house analyst showed that there has not been an aircraft sold of this type since February. As we all know, the market was fairly normal in February and has since changed considerably. The most honest and realistic approach with this client and all others is discussing the true current climate regarding their aircraft value. In transparency, we share that we will not throw darts in an attempt to forecast aircraft values without proper data. It is going to take activity for the supply verses demand forces to pave a way forward for future aircraft values.
States and municipalities are beginning to roll-back stay-at-home orders, and consumers are awakening from economic hibernation. It might come as a surprise to some that aircraft buyers do still exist in relatively healthy numbers. What has caused these buyers to become the invisible man this spring is not their lack of willingness to buy but rather their fear of trying to catch what appears to be a falling knife. Our buying clientele have maintained a patient approach thus far, and more realistic buyers are beginning to step forward. This fresh wave of buyers will produce the demand portion of the pendulum which will help provide a clear picture for the future.
As the flood gates of activity open this summer, newly generated data will help dictate where values settle over the next few months. No one will argue that there will be a penalty for the sudden global halt; however, it would be myopic to arbitrarily drop aircraft values without having some sort of evidence to support a value decrease. Through this rediscovery of price data, the market forces will start to align, and true market conditions will be established. This data will then be used as the keystone for the bridge to bring us back to normal aircraft valuations.
Those who know Ryan know his longtime passion for planes. As a matter of fact, Ryan soloed his first aircraft before receiving his driver’s license at age 16. Today, he holds multiple jet type ratings (LRJET, CL604 and B737) and is responsible for aircraft sales, brokerage, acquisitions, market analysis, data research and special projects. Ryan puts client needs first, always respecting time and understanding the importance of investments. Outside the world of aviation, Ryan enjoys spending time with his two children and heading out to the golf course as often as possible.
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