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Aviation History
1986
1986 - 0266.PDF
to ten per cent over five to seven years. How do the two experts view prospects in 1986? McGowan says that it is still early to see any developing trend, but that "we see an upturn in the 'used' market". Robert Rockwood says that the industry has recently been in a period of price decline which has "pretty much run its course". He predicts some stabilisation of used-aircraft prices, dependent upon the health of the US economy. Here, of course, confidence will play a part. It is the lead factor, according to Rockwood. "The corporate aircraft is a most expendable item." It can be the first thing to go in times of economic adversity, and the first to come back in when things improve. The forecast is for relatively strong earnings in 1986, and inflation pressure is non-existent. (When inflation is high, you need to buy before prices rise even further; conversely, with low inflation there is no need to act.) Trends observed by Aircraft Bluebook- Price Digest show that some aircraft that performed well in the low-depreciation stakes in the mid-to-late 1970s fell back in the early 1980s. Others—business jets, for example—have come from behind to hold their values better in the past five years. Best buys over both five and ten years have been 200+ h.p. single-engined piston aircraft. Most of these aircraft have lost less than a third of their value over the survey periods, during which time the new price has risen by about 185 per cent. Turboprops also did well in the 1975-85 period, but ranked lowest in the years from 1980, according to McGowan. A number of points may need to be made in observing these trends. Jets (busi ness, executive, corporate, call them what you will) have been subject to noise legis lation which has outlawed many older types, for which the market has shrunk as the newer turbofan designs have come into service. The arrival of Garrett's TFE731 and the Citation II are singled out by Rockwood as significant developments. Each will find a good market. Turboprops and piston twins suffered very much from the nosedive in used- aircraft prices in the early 1980s. As the recession bit, many operators disposed of their machines. In consequence, prices fell as supply outstripped demand until the market returned to balance. According to Rockwood this situation is not yet resolved. He points out that supply and demand ratios can swing very quickly. Almost any "economic hiccough" can lead to buyers disappearing or the market increasing in size. How does McGowan see the future? Demand is "a little tough" to predict. He foresees no great changes in the small- aircraft market until product liability questions are resolved. The small single- engined turbine aircraft? To be affordable, prices will need to be lower, he says, citing the $600,000 Cessna Caravan I. Acknowledging that a Baron 58P carries a similar price tag, McGowan says that "a good-sized aircraft" at $500,000 should sell well. He does not expect new retail prices to continue to rise quite so steeply, but says that increases will "probably" be more than inflation. What are the prospects for the bigger General-aviation price index: 1980-85 Type Corporate jets Gulfstream III Dassault Falcon 50 BAe 125-700A Gates-Learjet 35A Cessna Citation 550 Citation 500 IAI Westwindl(1124) Dassault Falcon 10 IAI Westwind II Dassault Falcon 20F Gates Learjet 25D Corporate turboprops Cessna 441 Conquest Beech King Air C90 Piper Cheyenne III Cheyenne III Beech King Air 200 1985 value (% of 1980 price) 124-3 115-1 87-4 73-7 73-2 68-8 61-8 58-8 57-2 55-9 495 72-7 64-8 59-4 590 58-9 Gulfstream Commander 840 57 0 Beech King Air F90 Fairchild Merlin IVA Merlin NIB Mitsubishi Marquise Corporate piston twins Cessna 402 Piper Navajo Chieftain Beech Baron 58 Baron 58P Cessna 414 Piper Seneca III Cessna 421 340 Piston singles (200 h.p. Beech Bonanza A36 Piper Saratoga Beech Bonanza A36TC Cessna 182Q Piper Saratoga SP Beech Bonanza F33A Piper Dakota Mooney 201 Cessna 4206G Mooney 231 Cessna 182RG 210 Piper Turbo Arrow IV Cessna P210 Piston singles (200 h.p. Piper Archer Warrior Cessna 172N 152 172RG 56 0 529 39-5 39-4 61-3 575 56 8 55-7 55-4 53-8 53 2 51-9 and above) 80-1 77 9 776 75-4 73-6 73-2 712 69-1 68-9 67-7 644 63-9 578 57-7 and below) 828 65-8 590 58-3 56-1 US general-aviation used-aircraft values (1985) corporate machines, the really heavy metal? Both men refer to the Dassault Falcon 900 and Gulfstream IV at $15 million or more. Rockwood sees "nothing to hold the value high"; he suggests that the GIV represents "no significant leap in technology" over the GUI. The only fundamental difference lies in the performance of the engines and the effect this has upon range and economy, he says. McGowan expects both designs to sell "quite well", because typical customers were not hurt in the recession. Rockwood General-aviation price index: 1975-85 Type Corporate Jets Gulfstream II Gates-Learjet 35 Cessna Citation 500 Dassualt Falcon 10 Falcon 20F Gates-Learjet 25B 24D Rockwell Sabreliner 75A 60 BAe 125-600 IAI Westwind 1123 Corporate turboprops Beech King Air C90 King Air 200 King Air E90 Fairchild Merlin IV Beech King Air A100 Fairchild Merlin MB Piper Cheyenne II 1985 value (% of 1975 price) 101-5 84 72 68 68 56 52 51 49 44 0 1 9 3 0 6 8 2 0 29-8 73 72 68 61 59 53 53 Gulfstream Commander 690A ' * Mitsubishi MU-2L Corporate piston twins Piper Navajo C/R Seneca II Beech Baron 58 Piper Chieftain Cessna 414 Beech Baron E55 Cessna 340 Beech Baron B55 Cessna 402 Beech Duke B60 Piper Aztec Piper Aerostar601P Cessna 31 OR Cessna P337 Skymaster 421 Golden Eagle Piston singles (200 h.p. Beech Bonanza A36 Bonanza F33A Mooney M20/201 Beech Bonanza V25B Piper Cherokee Six 300 Cessna 182P U206F 210 Piston singles (200 h.p. Piper Archer Champion 8KCAB Piper Warrior Cessna 172M Beech Sundowner C23 Beech Sierra B24R 9 3 7 1 2 6 0 5 460 60 55 54 53 52 51 51 49 44 43 42 41 41 37 7 3 3 3 9 4 0 6 4 ! 6 4 3 0 6 36-9 and above) 91-2 82 72 70 69 69 67 7 1 1 4 2 9 61-5 and below) 90 72 65 64 51 0 7 2 0 6 51-2 sees the Falcon 900 as less easy to predict. There being "no precedent", it is harder to evaluate: Dassault is "reaching a new Falcon market" with this cabin size. There has never been any straight head-to-head competition historically between the Falcon and the Gulfstream range, in Rockwood's view. Aircraft Bluebook is about to analyse the latest returns from its 1,000 dealers. Its conclusions will come out with the Spring crocuses, and like those flowers, may be the same colour as last year. D Percentage of original price Percentage of replacement cost Sector 1975-85 1980-85 1975-85 1980-85 Business jets 58-1 745 19-1 490 Turboprops 59-8 60-3 24-4 35-3 Piston twins 47-1 62-6 15-9 33- Singles (above 200 h.p.) 71-7 700 250 40-7 Singles (up to 200 h.p.) 65-5 57-8 26-4 36-1 Source: Aviation Bluebook Price Digest, Will Rogers World Airport, Box 59977, Oklahoma 73159-9988, USA. 24 FLIGHT INTERNATIONAL, 1 February 1986
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