Given the depressed values of most pre-owned aircraft over the past several years, along with the sheer volume of aircraft available, buyers in the market might have a tough time searching out the best bargains among the many offerings. Virginia-based Asset Insight now promises to make that task simpler as it unveils a new tool.
The company has developed an algorithm-based computerized grading system that will allow users to accurately quantify the maintenance status of a particular aircraft and compare it to others (of the same or different type) on the market. The program, scheduled to go live this month, has been under development for the past seven years, according to company president Anthony Kioussis, an aircraft finance veteran with more than three decades of experience in the industry.
“There’s never really been a way to compare aircraft based on an industry standard, and that’s what we hope to provide,” he told AIN. “I ended up investing in this company to create the product because it was just something that I felt was needed.”
Development of the product began before the economic downturn, but the drastic shift in the marketplace over the past several years led Kioussis, until last year the vice president of strategic marketing with GE Capital’s corporate aircraft finance group, to anticipate the benefits it could have on the finance industry. “[It] allows you to compare one aircraft to another,” he said. “If you are financing an aircraft–as an example–and you suddenly take possession of it, you can compare it to other aircraft that are for sale and determine how much maintenance you really need to do to make it more competitive.”
Asset Insight’s proprietary asset grading system process can analyze more than 70 different aircraft types, a list that encompasses most business and private jets. Kioussis expects that number to grow to several hundred types when it includes turboprops and piston-powered aircraft by year-end.
The process addresses the age-old question of aircraft age versus flight usage, and even lets system users make direct comparisons of the conditions of specific aircraft in a class such as a G450, Challenger 601/604/605 or Falcon 900. The user enters the make, model and serial number of an aircraft to analyze. The system then requires approximately 15 minutes of data input, with the user filling boxes of aircraft type-specific information such as what major overhauls and inspections have been performed on the chosen airplane, based on flight hour, cycle or calendar. The program’s algorithms will then calculate, taking into account the aircraft’s current age, cycles and flight hours, the life left on its major components: airframe, engines, APU, even exterior paint and cabin interior.
Within 24 hours the system generates an index score based on three components. The asset technical condition score measures the aircraft’s maintenance status relative to its optimum maintenance condition. The asset technical financial condition score takes the maintenance status and weights it for the cost severity of each maintenance event. The final component, asset technical financial exposure value measures the financial liability that the owner has accrued with respect to future scheduled maintenance events.
The cost per analysis is $199 regardless of whether it’s for a Cessna 172 or a Boeing Business Jet. For additional cost, users can purchase the individual scores for all the major sectors (airframe, engines and so on), which will allow them to see specifically which areas have the greatest impact on the airplane’s overall score. The system does not assign a monetary value to the aircraft, Kioussis emphasized. That’s left for the market to determine, but based on the same criteria for each aircraft it will create an index against which to compare individual aircraft, evaluate the extent to which each one has adhered more closely to manufacturer scheduled maintenance, and deduce which one has more usable life left before major maintenance events.
Asset Insight believes its product will eventually become a routine element of every pre-owned aircraft evaluation, valued by anyone with a financial interest in an aircraft, from buyers and sellers, to financiers, lessors and insurance policy writers. “I see this as becoming as commonplace for aircraft as a Carfax is for cars,” said Kioussis. “It levels the playing field among all the different aircraft that are out there.”