There's nothing "critical" about a lack of used airplanes in the market.

It is the best thing to happen to general aviation in a while. Used planes go up in value, they get more upgrades, planes that might have been retired are kept flying, even some derelict planes get fixed up, new planes sell well, more people flying GA overall.

This is what success looks like for the GA ecosystem. Instead of dying out, it is growing. We should celebrate instead of lament about this.

It would be far more "critical" if there was a huge glut of everybody dumping their airplanes.

Mike C.

I have shared Adam's opinion for many years. The statistics do not under right any evidence of an overall growth in aviation. I am speaking specifically of "general aviation" that is made up of a cross section similar to the BT audience.

I have stated ad nauseam that the current bounce in airplane values has been driven by the influx of government money from covid "assistance" programs. General Aviation cannot truly rebound without an increase of usage,i.e. hours flown. That is a number that would directly correlate to the gallons of aviation fuel produced and used which has been static at best.

I am no financial analyst and most of my investments have been handled by a hedge fund for 20 years, but I predicted the 2008 mortgage meltdown in 2007. It was the one and only time I called my hedge fund and told them where to invest any of my money. They put a portion of my funds, not nearly enough, on bets that the meltdown would accrue and made 685% return on those funds in 18 months. I didn't see this coming from financial analysts or statistics on the economy. I saw it right here, on the ground, with banks being forced to make mortgage loans to people who had never paid off a credit card and were allowed to "self validate" their supposed income.

The trend of GA is unchanged: period. People took government money and used it to finance everything they could think of buying including airplanes. The rush to buy airplanes was exactly that "circus coming through" that Adam compared it to.

I see signs EVERYWHERE of the government money running out. I see weak areas in the economy and strength in other areas that I've never seen before. NOTHING IS AS SIMPLE AS MOST PEOPLE WOULD MAKE IT OUT TO BE.

I do not see the GA market collapsing, but I do see a noticeable adjustment in inventory and prices coming to a head before the end of the year.

Most adages are BS, but one certainly applies to GA and the market for piston engine airplanes: The more things change, the more they remain the same.

Jg

There's nothing "critical" about a lack of used airplanes in the market.

It is the best thing to happen to general aviation in a while. Used planes go up in value, they get more upgrades, planes that might have been retired are kept flying, even some derelict planes get fixed up, new planes sell well, more people flying GA overall.

This is what success looks like for the GA ecosystem. Instead of dying out, it is growing. We should celebrate instead of lament about this.

It would be far more "critical" if there was a huge glut of everybody dumping their airplanes.

Mike C.

Exactly, you doom and gloom guys have been predicting the demise of GA for my entire flying career going back 35 years.

It hasn't happened.

If you went back 35 years ago and described aviation today to pilots back then, they would be impressed. The things we have now and the vibrancy that still exists would surprise them as they were sure general aviation would be totally dead by now.

Maybe someday you depressed folks will get it right with your bleak outlook, but not so far.

Mike C.

People wanting to keep and use their airplanes is not a "critical" situation, it is highly desirable. The use of the word "critical" implies something bad is about to happen, and maybe that's true for your business, but not for general aviation overall.

The opposite is definitely critical, everybody dumping their airplanes.

Mike C.

GA is like Yacht sales or any other luxury item that only a tiny fraction of people can afford in that it is self-leveling. New production is carefully managed to avoid market surplus or short falls. Not always a perfect science, but generally that is the goal. In this sense the new market is also determinate for the used market. It's just a reflection of the rich person economy good or bad.

People wanting to keep and use their airplanes is not a "critical" situation, it is highly desirable.

I keep hearing this, and no doubt it's true for some subset of buyers, but none of the people I know who bought airplanes, even expensive ones, in the last 5 years or so were getting any of that sweet, sweet government cheese. In fact, now I'm wondering what the USPS did with my check, the bastards.

I've been dealing Cessna's since 2018, picking up planes, fixing, and reselling. Every year (2018-2020) people said the same thing, the bubble is going to burst, prices can't go any higher. Then 2020+ came...

In trading terms it's a diminishing float, the pool of available/desirable planes is always going to be getting smaller, at least for the foreseeable future. And even if new production would ramp up new models would be unaffordable for the vast majority of buyers, further propping up prices of used sales.

The supply has dwindled with demand and the age of the fleet/accidents. Of course the demand has skyrocketed. Flight schools have been devouring the training market, many of the larger schools have big check books and won't argue over a $10k price difference for a quality, low time aircraft.

As far as jets I believe Covid was the real game changer. We had at the time 10+ managed clients, when the world and business stopped (before the stimulus checks) not one entertained the idea of selling their plane. It is/was a safe and secure means of transport shall they need it. And of course as the world re-opened and the ensuing travel chaos their planes only became more valuable to them.

Add in the crazy demand for charter, and the hefty price increases that came with, ownership of an aircraft started to make more sense.

That, and the fact that we are talking about sub-models produced in the 100s, worldwide! That is not many airplanes. When you think that there have been "only" 359 CJs produced, and 241 CJ2s produced, that is a VERY small number to compete over in a world wide market. Add in 20-30 years since the end of production and we have a growing percentage of undesirable aircraft/corroded/high time/crashed/damaged planes.

I'm not going to pretend I can predict the future, but my instincts based on trends/trading/facts have been right so far.

-The Citation Jet Exchange

People wanting to keep and use their airplanes is not a "critical" situation, it is highly desirable. The use of the word "critical" implies something bad is about to happen, and maybe that's true for your business, but not for general aviation overall.

The opposite is definitely critical, everybody dumping their airplanes.

Mike C.

and then there are the laws of supply and demand working here.....

Hey Jg,

I see two different economies.

On one hand I see a commercial property in a wealthy suburban area (strip mall w/ major name grocery anchor) that has 50% vacancy at best, and has had zero new tenants (and several leave) in the last 12 months.

OTOH, I see anything that resembles a desirable home in rural Alabama where we’re trying to move to sell in less than 24 hours after listing.

I can’t reconcile the two.

Best,
Rich

Rich,

You are right in multiple ways. It is hard to make sense out of much of it. When we moved to the ranch 5 years ago, we left a 7500 s.f. house on 13 acres in town, complete with a 50' gunite pools and three outbuildings, one a 1500 s.f. gym nicer than some houses. We were slow putting it on the market but did so three years ago. We finally got a valid offer of 1/3 the replacement price which will close in two weeks.

On the flip side, I have sold four commercial lots and have options on two more on my Interstate property: in the last 12 months. Church's Fried Chicken went belly up for reasons other than sales and did not renew their lease which expired in March. Monday, I signed and option with a national franchise to buy the property for 15 years of net rent. How do you explain such extremes? I don't know.

What I do know is that today on TAP you will find more Skylanes, Bonanzas and Cessna 180's for sale than I have ever seen.

My expectation is that over the next 12 months, the economy, as a whole, will do well. Within that, I think there will be some shocking adjustments.

Jg

OK, how are you going to sustain an owner flown market when you have less licensed pilots than you had in 2014? Why wasn't there a rush for airplanes in 2014 then?

The answer is dead simple. The moneys wasn't available then. But somehow, this time the artificial high will sustain even when the money goes away. This time it's different.

That will correct itself via the normal means. More planes will get built, more planes will be kept flying, more companies will provide services, etc. That's normal market behavior.

Mike C.