Finance: Buyers and sellers market

When’s a good time to buy a used turboprop or light jet? The rule of thumb holds that a buyer’s market prevails if 10 to 12 percent of the fleet of an airplane type is up for sale. Below 10 percent, it’s a seller’s market. Additionally, fewer than 90 days (on average) on the market is a signal of stronger demand.

The first half of 2017 ranked as a buying opportunity in certain areas, with good turboprops and light jets for sale. Inventories of large, long-range jets also were high early in the year. By mid-year, the big inventories thinned out. Now the supply of used turboprops and jets for sale has dropped—so prices have held firm, or even risen. But demand remains strong for airplanes with traditional appeal, good service networks, and low-time engines.

Want examples? As of late October, just 4 percent of Pilatus PC–12s and PC–12NGs are for sale. Only 7 percent of the Cessna’s Citation CJ3 fleet is on the market, and just 6.9 percent of Beechcraft King Air B200s. Want an Embraer Phenom 300? Only 3 percent of that fleet is on the market. Where are the deals these days? Well, 10.5 percent of the Citation CJ2 fleet is up for sale, 10.8 percent of CJ1+ population is available, and 10 percent of 200-series King Airs is on the market.

These numbers don’t reflect the total story, and the story is always changing. For example, at the time of this writing there may seem to be a lot of CJ1+ inventory—you can get one for a reported average price of $2.5 million. But that inventory amounts to only 11 airplanes. Compare that with the Citation Mustang’s 9 percent inventory, which translates into 42 available airplanes—many of which will sell for less than $2 million. If a Mustang fits more of your mission profiles, you could walk away with a better deal. AOPA’s Aviation Finance Co. is ready to move on the airplane you decide is right for you.

Web: www.aopafinance.org