AIRCRAFT
OWNERSHIP

Aircraft Buying: Advice from
the Experts

Aircraft
Partnerships

Do-It-Yourself
Preventative
Maintenance

By Paul Bertorelli
Editor, The Aviation Consumer

The science of flight simulation has advanced mightily in the past five years.Yet simulating aircraft ownership remains relatively unchanged: Just stand on your back porch and fling $20 bills into the breeze. To simulate a twin, use $50 bills.

But what the heck, as investments, airplanes easily beat the underlying inflation rate, right? And most appreciate at a pace to match, say, the Standard and Poor’s 500, so you'll at least get back what you’ve got invested in the thing. Or so goes the reasoning when you’re trying to sweet-talk your spouse out of the kid’s college fund to step up to a turbocharged retract.

Of course, when many owners sell, the bottom line falls woefully short and negative numbers are hardly unusual. Rather than adding up the columns and rows to see where it all went wrong, it’s less painful to drown your woes in a larger loan, which the bank is more than happy to provide.

So the question goes unanswered: Does the airplane really appreciate in a way you can take to the bank? Or are you just kidding yourself?

Ball of Yarn

In counting up the appreciation score, the first sticky problem is to determine what the airplane is actually worth. The Bluebook Digest, Vref and Aeroprice are places to start but because of market survey lag, they don’t account for this week’s spike or sag in value or the local inventory. And they neither agree on price nor variability from airplane to airplane.

Just because the Bluebook says your Cessna 182 is worth $68,000, doesn’t mean you’ll be able to sell it for anything approaching that number and the more impatient you are to unload it, the less likely you’ll get top dollar. Brokers and sellers consistently report that it takes weeks if not months of enduring tire kickers to sell an airplane for top dollar.

If you bought an airplane that was four to eight years old, the depreciation curve has bottomed out and the airframe starts to increase in value. That much is certain. But complicating the value formula is how to assess what you invested in the airplane and when, such as an overhaul, upgraded avionics or new paint.

Think of appreciation as a jaggy line that inches ever upward as the airplane ages. With few exceptions, improvements such as engine overhauls or state-of-the-art avionics merely prop up the curve for your particular airplane and keep it from flattening. They rarely pay back the cost of the original investment. In some cases, the cost recovery is too depressing to contemplate- so don’t.

For the sake of argument, let’s ignore value prop-up concerns and assume you bought smart and got lucky. Smart means you shopped for a low-time airframe with a newish engine and lucky means the engine didn’t chew itself to bits on the flight home fromthe seller’s airport.