As the New Year brings new expectations of ever-lower oil prices, what can the buyer and seller expect in today’s turboprop market? Looking back on 2014, it’s clear that educated buyers continue to pick from the best of the used market. Premium aircraft in most markets are doing better than any time since the “value adjustment,” courtesy of the recent recession.
Aftermarket modifiers are validating buyers’ investment in proven legacy airframes. Major OEM-sponsored refurbishment and re-engine and avionics upgrade programs greatly enhance the value of aircraft ranging from the fastest transcontinental bizjets such as the Citation X, to capable owner-flown turboprops including the Commander lineup. With cautious optimism in the air, it’s easier to appreciate the value of airframes that can soldier on indefinitely, especially with quality support readily available.
In the Commander market, recent months have seen sales exceeding new aircraft to market. As I write, 56 Commanders are on the market, and based on fourth-quarter 2014 activity the annualized sales pace is approximately 65 aircraft. While it’s generally considered a seller’s market when fewer than 10 percent of the fleet is for sale, which is the case for the worldwide Commander fleet, selling prices seem slow to increase in response to contracting availability. Fortunately, market stability and consistency reign.
What is not obvious from the numbers is the sales pace of high quality and highly upgraded aircraft. For example, at Oshkosh last year there were no completed Garmin 950-equipped Commanders available for purchase, and we expect that situation to remain true through the second quarter of 2015.
What’s changed? Buyers who have held back –– some for years –– on purchasing aircraft in need of upgrades now expect to move to premium aircraft. On the other hand, the same factors that held back some owners from moving up likely also held back other owners from investing in upgrading their aircraft. Couple a demand for premium, current-technology-equipped aircraft with a short supply of premium, ready-to-go aircraft and we have an active market at the high end while well-worn aircraft languish on the market to offset the increase in activity on “no excuse” aircraft.
If you’re a buyer in this market, you’ve witnessed this. As it becomes clear that across legacy markets buyers value the nicest aircraft, prices are pushed down on project aircraft.
With all signs pointing to increased flight activity, lower fuel prices, and increased upgrade options, 2015 promises to be an active year.
Bruce Byerly is vice president at Naples Jet Center and a long-time Twin Commander sales professional and pilot.