PRICES EXPECTED TO STABILIZE IN 2018
January 18, 2018 – At year-end 2017, market demand, across all segments of the business aircraft market, remained relatively unchanged from 2016, closing the year at just below average demand, according to Asset Insight’s quarterly Market Report (AI2 Market Report). Buyers were the beneficiaries of a 22% decrease in asking prices during the past year, while our tracked inventory fleet ended 2017 in the “Very Good” Asset Quality range.
The Year-End AI2 Market Report analyzes values for every production year of every modern make and model Business Class aircraft, while the Report’s maintenance analytics cover 92 fixed-wing models and 1,710 aircraft listed for sale.
Other trends detailed in the 2017 Year-End Market Report include:
- Overall demand remained stable from 2016 to year-end 2017, but lingered slightly below average.
- Since December 2016, the average Ask Price for tracked models fell 22.6%.
- The price expectation gap of buyers and sellers improved in 2017 across all aircraft groups.
- Most model Ask Prices are expected to decrease at a slower pace during Q1 2018, as forecasted by Future Value eTrend™.
- The cost of future scheduled maintenance (Maintenance Exposure) across the “for sale” fleet closed the year at a 12-month high, helping generate the worst Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) of 2017.
“2017 will go down in the books as a year when buyers were very happy with the availability of high-quality aircraft at record low prices,” said Tony Kioussis, president of Asset Insight, LLC. “Buyers snapped up the highest quality aircraft quickly, keeping demand pressure up for such assets. Going into 2018, buyers and sellers should expect a continued reduction in ask prices, but not as dramatic. They should also be aware of the hidden and, in some cases, extremely high maintenance costs expected for competing aircraft as they consider asking and actual selling prices. Additionally, the new tax rules that Congress passed in late 2017 may lend further price stability generated, in part, by increased sales in 2018 and beyond.”
Exclusively available from Asset Insight, the AI2 Market Report includes eTrendTM, a 90-day forecast for aircraft value by make and model. This tool is especially helpful to sellers who are evaluating offers on their aircraft while concurrently considering if their prospects are likely to improve.
Statistically, Asset Insight's eTrendTM forecasts are based on some of the most robust data analytics in the industry and have been thoroughly back tested to confirm a significant degree of accuracy.
To download the complete Market Report covering Q4 2017, visit www.assetinsight.com or click here.