Market activity in the first quarter saw inventory hold steady at multi-year lows, with an equal number of aircraft coming onto and leaving the market. Buying activity generally accelerates in the spring quarter, and this year’s set-up seems to be no exception, with brokers reporting brisk sales action. Despite the tightening there’s quite a bit of head scratching about why prices haven’t reacted more positively.
The two main value guides, Vref and Bluebook, have come under scrutiny recently regarding how they value or, as the case may be, devalue an aircraft from quarter to quarter. While sellers take the brunt of dropping values, brokers aren’t any happier when they have to report to their respective clients how much the book dinged their aircraft this quarter. Some values have dropped so much, one client said that if he has to lower his price any further he’ll donate his aircraft to Good Will like an old pair of shoes. While it’s easy to use the value guides as scapegoats, in truth they seem more to be a lagging indicator, both in an up and down market, and should be taken with a grain of salt or at least a pain reliever.
