What will the market be like for general aviation aircraft in the new year? In a new video posted to the YouTube channel “Flying With Rich,” pilot and CFI Rich Manor gives his opinion on what to expect as far as prices and supply in the coming year.
In the five-minute video, he notes you can’t paint the general aviation market with a single brush. It depends on what type of aircraft you are looking for, he notes.
As for prices: Don’t expect them to fall, he predicts, so it doesn’t make sense to wait any longer.
I’m surprised most on here don’t realize what drove a lot of the sales. It was PPP money that 12 million business owners received and many didn’t need, so they bought aircraft , boats , nice big SUV. Heck you can look them up on sba website. Federalpay org ppp You can put in the state and company name and see how much people received.
I think Rich is more tuned to corporate aircraft. I too sell airplanes and engines for King Airs and other turboprops. Our demand for KA 200/350s are at an all time high as there just isn’t much inventory out there. The pandemic started the desire to have a corporate airplane and the recent SWA debacle is refueling it. I use private aircraft for most of my travel within 500-800 miles or to hard to get to destinations. I mostly limit it to a minimum of at least two people on board as the expense of just one is pretty pricy unless I can’t get there any other way. If I have 4-6 on board, and we have a couple stops that we need to make, the per person cost is equal to or less than a business class ticket in most cases.
As to the small single engine fleet, with fewer pilots coming up thru the ranks and Uber type flying taxis on the very near horizon, it’s just a matter of time before those head for the boneyards.
I quite agree that we are looking at a lowering of prices and increased inventory as the year progresses with high inflation, struggling economy, and complete reversal of the wage increases experienced during the last administration. Unless the new House majority can succeed in turning this mess around by itself (not too likely), we are facing a depressed economy possibly lasting into 2024. And, the small airplane market is likely to tank- just look at the luxury yacht market- down now 50% from six to 10 months ago. The housing market in widespread spot markets across the country is down 20%+ and continues falling. You are correct- the small plane market is mostly driven by discretionary income- and the average family has lost over $5,000 dollars (annual) in buying power just in this last year. Piling on is the increasing cost of fuel! This CFI may be a great instructor, but I do think he has his head in the sand regarding economics.
I am certainly not happy about the direction our economy is headed, but we must be realistic about our facts and projections if we do not want to get caught in a financial dilemma. If you need to sell or are planning to sell a small plane, don’t get caught chasing the market down. Remember the housing market between 2008- 2016? You couldn’t give houses away! It was like that for approximately 7 to 8 years! Of course, things did finally turn around in 2016 and housing prices rose again- but for those who could not hold on during that depressed market, it was devastating. I am not guaranteeing my prediction is 100% accurate , but I believe it is not only possible, but likely that we could see a reversal of the cost (value) of small airplanes which have risen over the past several years. In closing, this is not rocket science- most , if not all economists are predicting a further fall into recession, a tanking of the stock market, and no relief in sight in the short term.
Spot on! Decisions need to be made based on sound financial metrics, not gut!
Supply, Demand, and Cost.
I’d like to see the business model Rich came up with to draw his conclusion, or was it just a feeling?
Small airplane use is funded with discretionary income. Demand recedes without income to support the habit. Supply increases with less demand. Increased costs in a recession dry up discretionary income. I’d rethink these conclusions.
Agree completely with your reasoning JD !
Just remember guys, the man in the video is an aircraft salesman. Their only priority is to sell aircraft. When the economy starts showing a slowdown, the first thing that most people get rid of or don’t buy is an aircraft. I think this will be a very interesting year for car sales, aircraft sales and house sales.
Seems to me that Rich’s analysis is based on corporate type/high end aircraft which traditionally seem to maintain their value.
I wonder what his outlook would be regarding the used single engine 50+ year old legacy airplanes.
As it stands and just to use an example of Cessna 150s as advertised in Barnstormers and Trade A Plane, these planes have asking prices of $30+K with close to or runout engines, one ancient non digital nav com, worn paint and interiors and no ADSB. These prices are double of what they were as little as 2 years ago. The fairly decent ones are going for $45+K, but people still buy them. Go figure, but I guess as the saying goes, there really is one born every minute!
Will be interesting to see if these prices go down given the current economic condition. As a side note, in my 51 years as a pilot and aircraft owner (5 planes), I have never seen prices go down on these type of used aircraft after they have gone up.