Accurately Valuing Your Aircraft is Key to Easier Transactions

August 16, 2022

Like housing prices and preowned cars, the market for preowned aircraft has seen some unprecedented price increases over the past 12 months. It wasn’t unusual to have both items sell without listings, for nearly whatever (or even above) what the seller was asking.

It looks like the days of the instant sale are slowing, however. As the market moves toward more of its traditional basis for buying and selling, it’s more crucial than ever for sellers to have experienced brokers help guide them in making the most of their valuable asset.

With expertise honed through decades of deals, our team at Hatt & Associates has the ability to accurately navigate the current marketplace, as well as help plan for future fleet decisions.

Overcoming Speculation
Through the first half of 2022, aircraft sales were based on a number of factors which were outside the normal marketplace. There’s been an increased demand for private aviation over the past two years as more companies and businesspeople have discovered the advantages and flexibility of fully controlling one’s travel capabilities.

While some of the increase in private aviation traffic is expected to be permanent, relative to pre-2020 levels, the bidding wars over aircraft are slowing down. Speculators looking to see 10% price increases in a month are discovering that those economics are not sustainable. Too many people were hoping the trajectory of the market would continue, which was not possible.

Accurately valuing one’s aircraft will be key to ensure faster and fair transactions. Sellers who have over assessed their aircraft are finding they need to reduce their prices by up to 5% to avoid having the plane sit for a longer period.

At Hatt, we analyze market trends and data, but we also know the importance of how the aircraft equipment, programs, and conditions contribute to is valuation. We always prioritize the seller’s interests, which means advising them honestly about upgrades and modifications needed, or how specific aircraft types are doing. We know that harder decisions made earlier in the process will lead to a more positive outcome in the end, rather than just telling an owner that their plane’s value is what they assumed it is.

As part of these sales fundamentals, we work with experienced inspection and maintenance experts, to help educate clients on properly evaluating the aircraft. During this sales boom, some aircraft have been sold without major pre-buy inspections. But that’s not the norm for the buyer in the past, and it won’t be going forward. That’s another factor sellers will need to consider, and work with the right people to incorporate that into their plans.

What are the conditions of the interior and exterior? How was the aircraft used – has it been a fractional or charter workhorse? Has it been stored inside or outside? What are the state of its avionics and inflight entertainment? Has it always been registered in the United States, or another country? All of these answers factor into making a thorough valuation, which impacts its attractiveness to buyers.

Accuracy Means Better Business
We want sellers to have the best experience and realize the most return on their aircraft as possible. That can be achieved when expectations and valuation are both based on solid data, market experience and analysis. We pride ourselves on giving clients detailed and factual information to make the deal smoother and to everyone’s satisfaction.

Fortunately, with airlines continuing to struggle with service and capabilities, private aviation is well set up to succeed in any future economic downturn. And the hard asset of an aircraft is an excellent way to protect one’s holdings against inflation. It’s a good time to check in with an aircraft specialist to accurately assess an aircraft and when is a good time to place it on the market.

Contact our team to find out the true value of your aircraft, and to evaluate the current and future state of the marketplace.