NAFA member, Duncan Aviation's Tim Barber, EMEA Aircraft Sales - London, UK, discusses the demand for non-airworthy aircraft.
At the beginning of 2021, there was an abundance of aircraft, airworthy and non-airworthy, on the market. That wasn’t the case by the end of the year, and prices were skyrocketing.
I had a CL-605 for sale that would have struggled to get $12M at the start of 2021.
I presented an offer to the owner for $12M. The owner decided the offer wasn’t competitive enough and did not accept it. The aircraft returned to the market a year later and received an offer for over $15M.
During 2022, we saw a 25-50%, and often higher, price hike on aircraft. Buyers panicked as prices rose, and owners took advantage of the opportunity by increasing prices. It became a sellers’ market rather quickly.
There were several reasons for the price hike. The most prominent were the Presidential election in the United States and the Covid pandemic.
People anticipated that with the change in Presidency, the bonus depreciation would disappear. The Covid pandemic played an equally important role as people who had the means to fly private were taking full advantage of the opportunity.
Currently, prices remain higher than usual, but they aren’t spiraling up or down. The light to super mid-range aircraft are still carrying a healthy premium due to the demand of charter companies, but this isn’t the only sector that’s thriving.
This article was originally published by Duncan Aviation in February 2023.