Aircraft owners face an ever-changing market. That is why our team of experts
Aircraft owners face an ever-changing market. That is why our team of experts
Spencer Bain, Gordon Ramsay and Daniel Christman, Lone Mountain Aircraft Sales
Aircraft owners face an ever-changing market. That is why our team of experts is committed to being your ally in aviation. Whether buying, selling or financing, Lone Mountain Aircraft simplifies the aircraft ownership experience so you can have peace of mind with each step of the process.
The quantity of calls from bankers is an odd but accurate litmus test for the health of the market. When you don’t hear from them, the market is hot. When they are calling, they’re searching for transactions and not closing anything; the market is cold. If they’re offering a round of golf, we are in recession. We were offered too many lunches from the bankers the last quarter but still no trips to the links! The jet-side is nursing our hangover from December where nearly 300 aircraft transacted. We saw more modest sub-130 transaction months in Q1. Though transactions are low, the number of planes added to the for-sale market is building with a 4.8 percent increase this year. There are more jets today than in the last six months making it a good time to be a buyer.
The turbine market performed well during the first quarter, in spite of the fact it is usually a slower time of year. Large turbines, such as King Air and Pilatus, are continuing to have a strong performance. The TBM market remains a seller’s market with demand up and prices on the rise. The late model and pre-owned Piper Meridian market remains healthy with a slight softening in the new M600 segment.
Last year set new records for Lone Mountain Aircraft in the Cirrus market, so it is hard to imagine 2019 could get much better, but it has. Volume/units sold was up 40 percent for the first quarter, with strong sales in the Generation 5 SR22 and SR22T market segment. The natural upgrade path for these owners is the Generation 6 SR22 and SR22T. Pricing is holding reasonably close to new pricing in the Generation 6 market segment, so pre-owned G6 SR22 and SR22T face competition from new aircraft. Cirrus continues to keep a nine-plus month backlog, so pre-owned pricing of the Generation 6 airframe continues to hold steady. The Generation 2 market segment bears mentioning as well as inventory is at a record low. When units become available, they are likely to be sold before they ever hit the marketplace.
As markets continue to change, Lone Mountain Aircraft helps clients bring clarity and expertise to their side of the table. We are proud to be one of the preeminent sellers of pre-owned aircraft worldwide and offer both sales and acquisition services for all types of aircraft. Our team would love to be part of your next success story in aviation! If you would like to be added to our TBM, Meridian, Phenom 300, Phenom 100 or SF50 quarterly reports, please email your name and address to firstname.lastname@example.org.
The fourth quarter was robust across the boards for general aviation aircraft. For the first time in a long time, the aggregate numbers indicate a seller’s market. The marketplace continues to outpace anything we’ve seen in the last decade.
Both the light and mid-size jet markets are performing well. The budding pre-owned Cirrus SF50 market is also finding its stride as new sales continue to mount. Medium jets are strong, and buyers are finding they may have to spend a bit more for a low-time, pristine airplane or it will be snatched up ahead of them. On the other hand, just or near-out-of-production aircraft models are dragging down values of their older siblings as their own value edges downward. A new trend seems to be emerging with more owners keeping their aircraft and running them out, as they have now depreciated them using bonus tax incentives. Sale proceeds will cause a recapture, so some businesses are better off driving planes until they’re retired from service.
The turboprop market remains strong to end the year. PC-12s are the high dollar planes in this segment, but the market is price-sensitive. Only 5 percent of PC-12 NGs are available for sale, indicating a healthy demand. Used King Airs offer strong value now, making good demand as inventory slowly shrinks. Twin-turbine operating costs are steering some buyers to the more expensive, but more cost-efficient, single-engine turbines. Average hours flown in the heavy turboprop markets are slowly rising based on increased commercial/charter use in this segment. The TBM markets are hot, with later pre-owned (900/910) models being price-sensitive. Both TBM and Meridian are seller’s markets, each with around 6 percent of the fleet available.
Piston markets are active overall, and Cirrus is closing 2018 with a banner year. The fervor is expected to continue into 2019 with much of the year already sold in advance. Late model aircraft of all types are in high demand, and are bringing the money as long as they’re not priced out of the market. There is still a hangover from this being the first seller’s market in a long time. Those buyers who aren’t adapting quickly are missing out on the best aircraft, haggling for lower prices that are no longer available. Factory new aircraft are available in dealer inventory as the year wraps up, but with business depreciation available next year, we have lost a little bit of the end-of-year panic to spend for the write-off.
As markets continue to change, Lone Mountain Aircraft helps clients bring clarity and expertise to their side of the table. We are proud to be one of the preeminent sellers of pre-owned aircraft worldwide and offer both sales and acquisition services for all types of aircraft. Our team would love to be part of the reason behind your next success story in aviation! If you would like to be added to our TBM, Meridian, Phenom 300, Phenom 100 or SF50 quarterly reports, please email us your name and address to email@example.com.
Spencer Bain and Mark Egan, Lone Mountain Aircraft Sales
While the fourth quarter traditionally brings the most activity in terms of preflown aircraft transactions, we witnessed a colossal absorption of late-model inventory in the first quarter of 2018. The result as we head into Q4 has been a bifurcation of many aircraft models, meaning most aircraft on the market are either like-new or on the other end of the spectrum – well outside manufacturer’s warranty and possibly near a major maintenance event.
This means clear skies and improving pricing for sellers inside that void as buyers seek planes that aren’t new, but not too old; that have a few blemishes, but aren’t in need of a new interior; that have time on the engine(s), but aren’t near overhaul. These buyers are having a much harder time finding a plane that is “just right” for their trips skyward.
Jet Market: We are seeing the lowest percentage (9.1) of the business jet fleet for sale in this century – since 1998 in fact. Light jets are the strongest segment with 10.7 percent of the total fleet available for sale. The newer segment within that fleet (less than 10 years old) represents only 5.6 percent for sale today. Ask prices within that segment are up – that’s right, up – 4.8 percent year-to-date.
Turboprop Market: The turboprop market currently has 7.2 percent of the fleet for sale. This represents the lowest percentage in the category’s history. The asking price for newer aircraft is up 11.1 percent year-to-date. Mid-age turbos (11-20 years) have an average asking price up 4.4 percent. Waning years, however, are still seeing a pricing slide.
Cirrus Market: Similar to this time last year, Cirrus Aircraft is experiencing their longest backlog of new aircraft, now taking orders for mid-year 2019 with the exception of a few remaining factory demonstrator aircraft available. This, along with the current market premium for all pre-owned G6 aircraft, supports the popularity of the G6 aircraft with Nxi Avionics.
Pre-owned Cirrus inventory has consistently been down since the beginning of the year by almost 13 percent compared to the average in the last five years. This has not slowed down sales, with the total number of transactions 11 percent higher than at this time in 2017. We are also pleased to report that average sales prices are up just over 6 percent since this time in 2017. With those data points in mind as we head into what has historically been the strongest quarter of the year, makes for a great time to consider planning your upgrade to your next airplane.
As always, don’t hesitate to contact our team at Lone Mountain for a more in-depth market analysis. To be added to our TBM, Meridian or Phenom 100 quarterly reports, email your name and address to firstname.lastname@example.org.
As we wrap up a record Q2 for sales at LMA, we are seeing continued optimism in the light aircraft markets. JetNet IQ just released a survey in late June showing most business aircraft operators believe the current market cycle is past the low point. Our own sales experience over the last quarter jives with this sentiment, as our units sold were a record 46 sales for the quarter. Inventories of some of the most popular models of aircraft are now at a third of the inventory of this time last year. The shrinking inventory has us returning to international markets again to find acquisition opportunities.
Contributing to the increased sales activity is the strong appetite of aircraft finance lenders for new loans. Lone Mountain Aircraft Finance has new finance offerings and competitive rates, and is proving to be a valuable resource for our clients.
Beginning in May of this year, Lone Mountain began a new model for providing detailed market data to aircraft owners. The model has been well received, and we are expanding this offering to all owners of turboprops and light jets. If you are an aircraft owner and interested in receiving our market reports, you can sign up on our website or via email at email@example.com.
Here is a quick look at what else is new:
Current Market Acquisitions: Lone Mountain is currently acquiring a King Air 350i, Phenom 100, Phenom 300, and Piper Meridian or M500 for qualified clients. Please let us know if you are considering selling or know of an available aircraft.
Vision Jet Positions: We have sold four more Vision Jet positions in Q2 of 2018 and are now selling positions that deliver in 2019. We have positions delivering as early as Q3 of 2019 with three delivery positions remaining for next year. Cirrus just delivered Vision Jet serial #54, and pilots are reporting a great customer experience and support from Cirrus. We expect Cirrus to build a total of 50 Vision Jets in 2018 and approximately 65 in 2019. On the training front, the first type-rating class offered at the new Vision Training Center in Knoxville will be held in July 2018 as training moves from In-Aircraft to simulator-based training.
Contact us today to learn more!
With the first half of 2017 in the books, it has been an exciting year so far for Lone Mountain Aircraft (LMA). As usual at this time, we are currently busy preparing for the world’s largest aviation event, the EAA Airventure Oshkosh. Kicking off July 23 in Oshkosh, Wis., Lone Mountain will have staff roaming the show grounds all week and will have our usual presence at the Cirrus booth. We hope to see you there!
Here is a quick look at what else is new:
New Sales Team Member: Gordon Ramsay joined the Lone Mountain team in March of this year and is off to a great start with several sales already. Most recently the Piper Program Manager at Columbia Aircraft Services in Connecticut, Gordon is well-versed in high-performance piston and single-engine turboprop aircraft. As an experienced pilot with over 3,500 hours of flight time and more than 30 years of experience in aircraft sales, he is a great addition to LMA.
New Jet Type Rating: Daniel Christman earned a new jet type rating in June. Go here for more info.
Vision Jet Positions: In addition to continuing to lead the market in SR2X resale, LMA is taking a leadership role in position resale. As we have been predicting for several years, the market for Cirrus Vision Jet positions has matured and become very active now that the type certificate and production certificates have been issued. New Vision Jets are being delivered to customers and many early delivery positions have been sold to eager new owners. We’ve been excited about this new product and even more so now that several of us have time flying it. Give us a call for details on a purchase or sale of a position.
Vision Jet Factory Delivery: LMA also recently assisted with a factory delivery of a Vision Jet, with our own Mark Stear lending his extensive experience with jet deliveries. We were involved with the delivery of serial #10, and were favorably impressed with the fit, finish and overall quality. New owners are going to love this aircraft!
Aircraft Financing: Our bank is eager to lend and looking for more aircraft to finance. Lending terms have eased a bit over the last year as banks are competing for deals, and rates are still attractive despite recent moves by the Federal Reserve. Lone Mountain Aircraft Finance has now financed over 100 aircraft since our first aircraft loan in 2013, and we continue to innovate with more unique financing options for our buyers.