Conklin: Value of Older Used Bizjets in ‘Dire Straits’

 - August 27, 2009, 10:58 AM

Business jet valuations for pre-mid-1990 models are in “dire straits” and likely will never recover, Conklin & de Decker vice president and co-owner David Wyndham said in the company’s latest e-newsletter. He studied Amstat’s pre-owned business jet inventory data and found some trends for business jets built in “significant numbers.” Inventory of Hawker 800s built between 1984 and 1995 sits at 24 percent; Hawker 800XPs (1995 to 2005), 13 percent; and Hawker 800XPs/900XPs (2005 to present), 7 percent. Likewise, inventory of Challenger 600s built between 1981 and 1983 is 37 percent; 601-3A (1983 to 1993), 24 percent; 604 (1996 to 2006), 11 percent; and 605 (2006 to present), 9 percent. Other models with long production runs follow this pattern, he said. “Many of the early, first-generation business jets are probably at or near their salvage value: the value of their individual airworthy components,” Wyndham noted. “Given their relatively high operating costs, many of the oldest models, although airworthy, are near the end of their economic useful life.” Meanwhile, he expects business jet values for mid-1990 to early 2000 models to see a mild recovery, but probably not until after 2012. Further, Wyndham predicts that values for business jets less than about five years old will recover first and most strongly, meeting “much of the pre-owned demand as we recover.”