Business Jet Valuation, Part I: What’s my Airplane Worth?

Are you planning for an imminent (or eventual) aircraft sale?

One of the main questions you’ll be pondering is: how do you determine what your current aircraft should be priced at?

In other words, how do you effectively calculate your business jet’s value?

The best way is to carefully analyze market conditions, residual values, your past travel patterns and future requirements.

For help, a broker and business aviation consulting firm like Guardian Jet can present options that best match your aircraft appraisal needs.

 

Timing is Key

In fact, understanding aircraft value is at the heart of everything we do at Guardian Jet.

From analyzing and predicting residual values to pricing aircraft competitively, aircraft valuation literally touches every consulting project we engage in.

As jet brokers, we’ve demonstrated to our clients time and again that they can realize significant savings over the lifecycle of their asset.

They can do so by making incremental adjustments in the timing of their aircraft sale, and, correspondingly, the purchase of a new replacement.

You can execute this critical transition—from your previous aircraft to a new one—all the more successfully by engaging some thorough planning on the front end.

The questions that need to be answered, though, are many.

For example, what are the factors that influence jet values? And what are the best entry and exit points of your sale to consider?

 In this—the first of a two-part series addressing aircraft valuation and market analysis—we’ll delve into many of these critical considerations.

Our aim is to help you more effectively assess and assign optimal value to your aircraft.

 

What’s in an Aircraft Market Survey?

Surveying the market is the first, most fundamental step in effectively valuating your aircraft.

And a well-thought-out market survey delivers the current state of a particular aircraft model marketplace.

At Guardian Jet, our survey includes two primary sections. The first deals with what is for sale and the second with what has recently sold.

In the “for sale” section, aircraft are listed sequentially, oldest to newest. Each aircraft receives plusses or minuses for things such as total time, options, maintenance programs, damage history, engine overhaul status and general condition.

What’s called a “Aircraft Value Calculation” is then generated for every airplane for sale. We factor in the model’s features, base value and the premium or discount the market happens to be trading at.

But if we’re going to be able to effectively survey the market let’s first lay some groundwork—and provide some context—for valuating your aircraft.

 

Factors that Matter

There are numerous variables when it comes to valuing (or pricing) a private or corporate aircraft.

Valuation can be assessed differently even on serial numbers of the same aircraft type.

Some of the factors that affect pricing include:

  • Number of aircraft currently in service
  • Number of aircraft currently for sale
  • Where the aircraft for sale are located
  • Aircraft age
  • Aircraft total time
  • Engine program
  • Features (connectivity system, upgraded avionics, upgraded cabin management system, etc.)
  • OEM-designated lifecycle of the aircraft
  • Aircraft base value
  • General condition and damage history
  • Whether the aircraft’s layout is standard or custom
  • Current market behavior: Is the market selling at a premium or a discount?

Our goal is to help you generate the best aircraft market analysis and, thus, the best price for your aircraft.

So in the next installment of this two-part blog, we’ll offer some bottom-line recommendations to help you make the most of your valuation and market timing.

 

This entry was posted in Aircraft Valuation, Asset Management, Aviation Industry, Business Aviation, Fleet Planning, Ownership and tagged , , , , , , . Bookmark the permalink.

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