While the pre-owned market has had to grind it out over the last couple of years to turn a deal, buyers have made a considerable dent in the number of choices since then, with 500 fewer aircraft available compared with the number of choices at the peak. As the industry heads into what is typically one of the most active periods of the year, the trend should continue. Of course, the impetus has come in the form of drastic price cuts across the board, and those price cuts have put the spotlight on a segment of the market that has been fairly dormant until recently. Often referred to as classic aircraft, many third-generation models are getting increased attention of late.
Some of these are now selling for 25 cents on the dollar compared with their price around the peak. A popular mid-cabin aircraft might have run about $4 million a few years ago; today it is priced at $1 million. It may be 1980s or early 1990s vintage, but it still does now what it did a few years ago. With the heavy discounting, buyers are willing to take on the higher operating costs of an aging aircraft and are clearly less concerned about deteriorating values on a $1 million asset than when it cost four times that amount. Certain maintenance programs on engines, parts and so on can also bring some predictability to the annual cost of operating one of these aircraft.
