Most modern-day professional golf events take place over four days and 72 holes. Round three, aptly named “Moving Day,” is the period when those on the borderline of contention make all efforts to advance their position before the final day of play, while others drift back in the standings. If a golfer plays it safe, he or she risks being passed by an over aggressive player making all the right shots. On the other hand, being overly aggressive could jeopardize a player’s game and increases the risk of missing pivotal shots. After day three, a player’s chance to take advantage of timing is greatly reduced. Our pre-owned aircraft markets have arrived at moving day. The low point in inventory has come and gone and available aircraft continue to rise. Regardless, demand for pre-owned aircraft continues to be active and prices are still elevated, for the time being. The moment for action, before these market conditions reverse, may be rapidly approaching.
The Omni Aircraft Sales’s research department is tracking a steady rise in pre-owned inventory that started in February. Most of these were snatched up quickly but were backfilled by an even greater number of aircraft in March. If this trend continues, which it likely will, price-setters will have no choice but to return to fair market value. The big questions are: “how far will prices drop?” and “how many buyers will stay engaged?” Currently, buyers are still very engaged. Although, the willingness to pay record high prices has waned for some buyers, others have no hesitation to purchase after waiting months for the chance. I spend most days on the phone with brokerage and acquisition clients. The consensus has definitely started to shift. In the previous two quarters, sellers were amazed at the valuations they were presented with, and buyers were eager to pay whatever it took to get their hands on a desperately needed aircraft. Today, sellers are stepping up at a faster pace hoping to capitalize on these prices, while buyers are evermore hesitant to pay top dollar. The most eager buyers are now becoming exhausted, prices will soon be forced to retreat due to the supply and demand equation.
Not making a decision is still a decision. Active buyers and sellers have reached a pivotal point and it’s their time to make a move. If buyers continue to pay exorbitant prices, they undoubtably face the real possibility of overpaying as the months ahead unfold. However, choosing to sit idle costs valuable time. The total revenue and time that is wasted by not having adequate transportation is for each individual buyer to determine. Sellers, on the other hand, have a limited window to capitalize as prices continue to make their way back to normal. Holding out in negotiations for just a little bit more or overpricing your aircraft in the beginning could be a costly mistake. In golf, moving day is when the professional usually emerges from the pack or falls out of contention. As the market changes in front of us, participants are faced with a choice to play it safe or make a move. Regardless, each buyer and seller scenario is vastly different. The best advice I can give is to play the course in front of you and do not base your decision on your opponent.
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 wife and two children. He also enjoys heading out to the golf course as often as possible.
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