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28 May 2022, 03:45 [ UTC - 5; DST ]


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 14:07 
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I enjoy this discussion. Most legacy Citations are trading word of mouth or soft listings like BT or Barnstormers. My piston market knowledge isn't great except I recently bought my wife a 3100TT 172RG. I really wanted a regular 172 and they are all but impossible to find. I'm happy with what I got and paid a little under 100K for a low time bird with lots of modern Garmin stuff, a new leather interior and a 100 hour motor/prop. I think if it was a fixed gear 172 it would have cost $150K. I asked the piston broker (Indy Air Sales who moves 100+ pistons a year) what he thought about this situation and he said the following that stuck:

1) Lots of exports
2) Lots of planes getting wrecked or scrapped
3) Few new airplanes with high prices getting built

It's a FACT that 1-3 is not going away. His conclusion was (and I agree) that for GOOD examples of a type, they are going to continue to appreciate and get harder to find. Is a global economic meltdown on the horizon? Who knows and obviously that will cause ALL prices to plummet including airplanes. However, inflation is real and I believe it is here to stay. $6 avgas is the new $4 avgas. Hangar rents and insurance premiums are doubling. Wages are increasing.

Strange times we are seeing.


100%

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It's not so much what we do not know, it's that much of what we are being told just isn't so.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 14:18 
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Username Protected wrote:
Like in 2008, the aircraft market will collapse on the bottom end.
Jg


John, that's not what happened at all... the market clearly crashed from the top down. You can look back at the old VREF and Blue Books to see it.

The automakers flew their big iron to DC to beg for money and it became a political issue. Boards across the country reacted severely. I worked for a stocking aircraft dealer at the time and we were getting phone calls that were all some version of "they say the airplane has to be off our books... NOW... what will you pay?"

If GM's or Ford's $50M Gulfstream is worth $25M overnight, what is a $25M Falcon worth? $15M? And if a Falcon 900 is $15M... what's a Citation Sovereign worth? $7M?

The wave washed down from above like falling dominoes. At the bottom the impact was less, I know of no turboprops or pistons that dropped 50% in value. One of the reasons the King Air has become a staple is they survived that value crunch pretty well.

Winner of the 2008 market crash? The Citation Mustang and Embraer Phenom 100.

Economical and fuel efficient.

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It's not so much what we do not know, it's that much of what we are being told just isn't so.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 15:21 
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7 dollar a gallon gas and higher JetA prices will change the market and more aircraft will be for sale.


Yes, but those like me who cruise at WOT with a big bore engine can throttle back and compensate for fuel cost increases, and improve range. But I like to go "fast" and I'm not there yet. :D The savings in fuel at high cost can more than compensate for increased engine times.

In my area Mogas is getting close to the price of avgas. $5.00 100LL and $4.85 87 octane Mogas. :eek: .Mogas is on it's way to exceeding Avgas in price in California, and that's eating into the discretionary budget for operating an airplane. That's a rather minor issue for us that have airplanes, but it's a big deal for families on tight budgets who need to drive.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 15:47 
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Aircraft: 1969 Aerostar 600
Username Protected wrote:
Ignoring the possible impacts of the lead issue for avgas, history will repeat itself in a pretty predictable manner.

When, not if, "gas" prices go up, they will do so across the board and affect all transportation. At first, it will reduce the purely discretionary transportation. Then, it will begin to redefine what people define as necessary transportation. Finally, it actually begins to force people to seek more economical transportation in their efforts to ride share, take public transportation and, finally, to actually change their purchasing patterns. The big, jacked up 4 wheel drives will become yard ornaments and dealer's lots will be cleaned of any vehicle that promises efficiency.

To legitimate users of aircraft, it means less. They still have to go. To those pretending to need and airplane, turbine or piston, their response has, in the past, been the most immediate and maybe the most violent. Like in 2008, the aircraft market will collapse on the bottom end.

Don't believe me? Just look around. Even at today's "reasonable" prices, the gas guzzling airplanes are sitting like a frog with two broken legs.

The lower end turbines and jets aren't going to the people who really have a use. Those owners are moving up. The old legacy units are going to those who are finally able to fill their dreams of jet ownership as the last few hours of use are eked out of those airplanes.

Yesterday, I drove to Memphis with a trailer to try to round up roofing supplies for my remaining flat roofs. I had to go to four suppliers to get everything I needed. Some of the items won't be replenished for up to a year.

The economy is moving again, but like a 40 year old delivery truck, it is spitting and sputtering. On the way home, I did something unusual, I turned from a music to a news channel. The government can't figure out why folks won't go to work while they "fine tune" another 4 trillion dollar give away to the non-producing members of society. And the president said he didn't know why gas prices were going up and couldn't do anything about it.

When I got home, I got on the computer and started looking at the Twin Comanche market.

As the author of the economic's history book, The Rational Optimist, said: this world is poised for the greatest advances of all times. The only thing that can stop it is government.

For the first time in a long time, I am scared.

Jg

John, I have never really been afraid of anything in my entire life up until the last 12 months. I am with you 100%. I have never had a feeling like this before. I have nothing to gauge it against. I have no idea where we are going, or, how we will end up when we get there.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 16:03 
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Joined: 02/15/21
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Username Protected wrote:
The question is???

How many recent Turbine buyers are at the edge of their comfort level.

What happens to the older fuel guzzling Turbines

Does this mean more older Turbines on the market?

What percentage of the Turbine market are older Turbines? 75%?


You actually have your numbers inverted. There are approximately 29,301 private jets and turboprops in service that were built since 1990... only 9282 of those same types still flying were manufactured prior to 1990.

Older turbines, especially private jets are either viable or they aren't. The cost of fuel is not what kills them, it's maintenance, avionics and noise abatement.

Citation 550's are still flying, though there's not a ton of demand. Lear 35's, Falcon 10's are on their way out... Westwinds are all but gone. My beloved 20 series Lears and old GII's and GIII's are gone.

True, when I do a "C5" aircraft type search on ADS-B Exchange to see what small-to-mid Citations are flying, I see lots of 525's and 510's, and TONS of 560XL's. A lot fewer of the 500-series.

Just today over Europe of the 30 "C5" types flying when I looked, 20 were XL's and 7 were Mustangs. There was one 550 and the other two I think were 525's. Pretty unscientific but not atypical from what I've seen.

Conclusion: most small jets are flown by corporate owners or charter companies, and a newer, more fuel efficient jet is what they typically want.
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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 16:42 
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Joined: 01/24/10
Posts: 5814
Post Likes: +3396
Location: Concord , CA (KCCR)
Aircraft: 1967 Baron B55
When personal or corporate budgets get tight, the airplane is always the first to go.

The future will interesting, I am currently not buying anything till I see what happens next year.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 21:46 
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Joined: 04/24/18
Posts: 576
Post Likes: +208
Location: NYC
Aircraft: ISP Eagle II SR22 g2
Username Protected wrote:
Ignoring the possible impacts of the lead issue for avgas, history will repeat itself in a pretty predictable manner.

When, not if, "gas" prices go up, they will do so across the board and affect all transportation. At first, it will reduce the purely discretionary transportation. Then, it will begin to redefine what people define as necessary transportation. Finally, it actually begins to force people to seek more economical transportation in their efforts to ride share, take public transportation and, finally, to actually change their purchasing patterns. The big, jacked up 4 wheel drives will become yard ornaments and dealer's lots will be cleaned of any vehicle that promises efficiency.

To legitimate users of aircraft, it means less. They still have to go. To those pretending to need and airplane, turbine or piston, their response has, in the past, been the most immediate and maybe the most violent. Like in 2008, the aircraft market will collapse on the bottom end.

Don't believe me? Just look around. Even at today's "reasonable" prices, the gas guzzling airplanes are sitting like a frog with two broken legs.

The lower end turbines and jets aren't going to the people who really have a use. Those owners are moving up. The old legacy units are going to those who are finally able to fill their dreams of jet ownership as the last few hours of use are eked out of those airplanes.

Yesterday, I drove to Memphis with a trailer to try to round up roofing supplies for my remaining flat roofs. I had to go to four suppliers to get everything I needed. Some of the items won't be replenished for up to a year.

The economy is moving again, but like a 40 year old delivery truck, it is spitting and sputtering. On the way home, I did something unusual, I turned from a music to a news channel. The government can't figure out why folks won't go to work while they "fine tune" another 4 trillion dollar give away to the non-producing members of society. And the president said he didn't know why gas prices were going up and couldn't do anything about it.

When I got home, I got on the computer and started looking at the Twin Comanche market.

As the author of the economic's history book, The Rational Optimist, said: this world is poised for the greatest advances of all times. The only thing that can stop it is government.

For the first time in a long time, I am scared.

A witness to many dire predictions

Jg


I mostly agree but was amused by the irony... :peace:


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 21:49 
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Posts: 576
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Aircraft: ISP Eagle II SR22 g2
Username Protected wrote:
Old turbine burns 150 an hour, new turbine burns 120 an hour. At 7/gallon minus 320 an hour program fees, old turbines still win. $7 isn’t happening I think we will see $4-5.


What's a realistic range for the cost of hotting 2 JT15D'S?
What about an hourly mx cost budget?


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 21:52 
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Joined: 04/24/18
Posts: 576
Post Likes: +208
Location: NYC
Aircraft: ISP Eagle II SR22 g2
Username Protected wrote:
The question is???

How many recent Turbine buyers are at the edge of their comfort level.

What happens to the older fuel guzzling Turbines

Does this mean more older Turbines on the market?

What percentage of the Turbine market are older Turbines? 75%?


You actually have your numbers inverted. There are approximately 29,301 private jets and turboprops in service that were built since 1990... only 9282 of those same types still flying were manufactured prior to 1990.

Older turbines, especially private jets are either viable or they aren't. The cost of fuel is not what kills them, it's maintenance, avionics and noise abatement.

Citation 550's are still flying, though there's not a ton of demand. Lear 35's, Falcon 10's are on their way out... Westwinds are all but gone. My beloved 20 series Lears and old GII's and GIII's are gone.


One can argue, (especially in light of what banks are willing to finance) that anything over 20 years is considered a legacy turbine.
What are the numbers pre/post 2001?

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 22:10 
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Joined: 01/23/18
Posts: 247
Post Likes: +372
Aircraft: Aerostar
Username Protected wrote:
Ignoring the possible impacts of the lead issue for avgas, history will repeat itself in a pretty predictable manner.

When, not if, "gas" prices go up, they will do so across the board and affect all transportation. At first, it will reduce the purely discretionary transportation. Then, it will begin to redefine what people define as necessary transportation. Finally, it actually begins to force people to seek more economical transportation in their efforts to ride share, take public transportation and, finally, to actually change their purchasing patterns. The big, jacked up 4 wheel drives will become yard ornaments and dealer's lots will be cleaned of any vehicle that promises efficiency.

To legitimate users of aircraft, it means less. They still have to go. To those pretending to need and airplane, turbine or piston, their response has, in the past, been the most immediate and maybe the most violent. Like in 2008, the aircraft market will collapse on the bottom end.

Don't believe me? Just look around. Even at today's "reasonable" prices, the gas guzzling airplanes are sitting like a frog with two broken legs.

The lower end turbines and jets aren't going to the people who really have a use. Those owners are moving up. The old legacy units are going to those who are finally able to fill their dreams of jet ownership as the last few hours of use are eked out of those airplanes.

Yesterday, I drove to Memphis with a trailer to try to round up roofing supplies for my remaining flat roofs. I had to go to four suppliers to get everything I needed. Some of the items won't be replenished for up to a year.

The economy is moving again, but like a 40 year old delivery truck, it is spitting and sputtering. On the way home, I did something unusual, I turned from a music to a news channel. The government can't figure out why folks won't go to work while they "fine tune" another 4 trillion dollar give away to the non-producing members of society. And the president said he didn't know why gas prices were going up and couldn't do anything about it.

When I got home, I got on the computer and started looking at the Twin Comanche market.

As the author of the economic's history book, The Rational Optimist, said: this world is poised for the greatest advances of all times. The only thing that can stop it is government.

For the first time in a long time, I am scared.

Jg


Scared….

Don’t let it happen to you.

Stuff is going to happen.

Stuff happens.

When it does, we’ll deal with it.

If the stuff gets bad enough that you are willing to ask for help, you have my number.

I’ll come get you and yours.

Short of that

Keep swinging.


Last edited on 24 Oct 2021, 13:13, edited 1 time in total.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 22:29 
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Joined: 11/25/19
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Aircraft: Aerostar 601P, AS350
Username Protected wrote:
Old turbine burns 150 an hour, new turbine burns 120 an hour. At 7/gallon minus 320 an hour program fees, old turbines still win. $7 isn’t happening I think we will see $4-5.


What's a realistic range for the cost of hotting 2 JT15D'S?
What about an hourly mx cost budget?


I know a guy that had two 15ds In a 2sp citation, 180,000$ By Avmats in Missouri . You gotta figure out what blades you have, iirc some are on condition and some you have to change. Pretty sure it’s not a supported engine anymore either.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 23 Oct 2021, 23:57 
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Aircraft: Turbo Commander 680V
Username Protected wrote:

It's important to add that the cost of the Williams / Pratt engine programs on newer technology motors offsets the cost of engine overhauls, not the difference in fuel consumption. The premium of that cost is offset by the fuel efficiency.

If you aren't paying for an engine program, the value of your airplane is dropping for each engine hour you fly it, when it comes motors there's no free flying. Pay now or pay when you sell.
.


I would say that's true except for when it comes to Garretts and Allisons. There it makes very little sense to be on a program. Or put another way: the only reason programs exist, is because every other manufacturer is taking their customers to the cleaners!

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 24 Oct 2021, 00:07 
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Joined: 12/03/14
Posts: 14842
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Company: Ciholas, Inc
Location: KEHR
Aircraft: C560V
Username Protected wrote:
If you aren't paying for an engine program, the value of your airplane is dropping for each engine hour you fly it

If you are paying for an engine program, the value of your plane is dropping for each engine hour you fly it. Paying on an engine program doesn't stop the value loss.

There are numerous FJ44 equipped Citations out there where the owners have paid more in the engine program than the plane's market value, even in today's hot market.

The FJ44 owner is effectively renting the plane from Williams. At about $330/hour for a pair of engines, that's $1M every 3000 hours.

The FJ44 has no viable options other than to pay Williams. They are the only providers of major engine work, and you will have to talk to them at least every 2000 hours or your engines are dead. The only other choice is to disposed of the airplane at the next major engine event, which is economically worse than making the payments. You can't run past TBO, either.

Lastly, Williams can change the terms of the program at their whim, and they regularly do so. Any FJ44 owner is taking a huge contractual risk. Even simple changes like raising the minimum hours per year can make the FJ44 significantly less viable for owner operators.

Meanwhile, the JT15D owner can elect, if part 91, to only HSI and keep flying. This is a great fit for the low utilization owner, like myself. There is no minimum yearly requirement, and no money sent to Williams. The JT15D can be serviced by a number of independent shops.

The JT15D does burn more fuel, about 15% more per mile for comparable aircraft (say CJ3 versus V). That is not as bad as I had feared it would be.

Mike C.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 24 Oct 2021, 00:57 
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Posts: 576
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Location: NYC
Aircraft: ISP Eagle II SR22 g2
Username Protected wrote:
If you aren't paying for an engine program, the value of your airplane is dropping for each engine hour you fly it

If you are paying for an engine program, the value of your plane is dropping for each engine hour you fly it. Paying on an engine program doesn't stop the value loss.

There are numerous FJ44 equipped Citations out there where the owners have paid more in the engine program than the plane's market value, even in today's hot market.

The FJ44 owner is effectively renting the plane from Williams. At about $330/hour for a pair of engines, that's $1M every 3000 hours.

The FJ44 has no viable options other than to pay Williams. They are the only providers of major engine work, and you will have to talk to them at least every 2000 hours or your engines are dead. The only other choice is to disposed of the airplane at the next major engine event, which is economically worse than making the payments. You can't run past TBO, either.

Lastly, Williams can change the terms of the program at their whim, and they regularly do so. Any FJ44 owner is taking a huge contractual risk. Even simple changes like raising the minimum hours per year can make the FJ44 significantly less viable for owner operators.

Meanwhile, the JT15D owner can elect, if part 91, to only HSI and keep flying. This is a great fit for the low utilization owner, like myself. There is no minimum yearly requirement, and no money sent to Williams. The JT15D can be serviced by a number of independent shops.

The JT15D does burn more fuel, about 15% more per mile for comparable aircraft (say CJ3 versus V). That is not as bad as I had feared it would be.

Mike C.


Hots on the pratts seem to be about $100+ an hr.
Add in hourly mx and the Williams premium is just about cut in half to 165 an hour. Add in the 30+ gallons an hour of fuel saving and the Williams premium disappears. When you factor in 10-15% faster cruise speed, which further increases nmpg and reduces hours flown, and better climb and greater range it's a no brainer.
Of course if you don't fly 150 hours 4 out of 5 years it doesn't work. I started flying the eagle ii in December 2020 and have put 270 hours on her in 10 months. For us it works.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 24 Oct 2021, 01:22 
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Username Protected wrote:
Add in hourly mx

Outside of MPI-3 (HSI) and MPI-4 (OH) what routine maintenance does Williams pay for? I was under the impression that was minimal, well under $65/hour benefit. At least, I didn't see anything of that significance in the TAP contract.

Mike C.

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