Aircraft Values Remain Strong Despite Economic Headwinds

 - September 2, 2022, 9:26 AM
According to the Vref 2022 Market Trent Report, valuations of Cessna Citation models, including the Citation Longitude, have increased between 2 and 20 percent from the second quarter. (Photo: Textron Aviation

Preowned business aircraft values remain strong, although there is some evidence that the seller’s market may be changing, according to the third-quarter 2022 Vref Market Trend Report. These strong valuations persist despite inflation and recessionary fears, Vref said.

A summer slowdown hasn’t affected most aircraft model prices, the report notes, and “buyers’ appetite for business jets remains at levels not seen in years.” While there was an uptick in inventory for turboprops and business jets, the averages stand low at between 3 and 4 percent of the in-service fleet. However, these averages have edged up between 1 and 2 percentage points from the end of last year. Business jet valuations have continued to climb, the report says, noting that, for example, Cessna Citation values have increased between 2 and 20 percent from the second quarter.

The report notes that days on market have remained unchanged from the first and second quarters. Though there are fewer aircraft transactions in the second half compared with the first half, “we are still on par for a typical year if we remove the crazy benchmark year of 2021,” the report says.

Still, Vref president Jason Zilberbrand noted there are instances of some valuations weakening. “Demand continues to outpace supply, although we may finally be hitting the apex for asking prices, as for the first time in over a year sellers are being forced to lower asking prices to find a buyer and ‘turnkey’ ready-to-fly, thoroughly modernized aircraft are still clearly leading the charge for acquisitions across all classes,” he said.

Vref forecasts a “hectic” fourth quarter as buyers continue to take advantage of bonus depreciation before it expires and a “loathing of commercial carriers” that is “enough to keep the train on the track, keeping demand and asking prices at current levels.”