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29 Mar 2024, 06:55 [ UTC - 5; DST ]


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 Post subject: VLJ Fallout
PostPosted: 30 Nov 2008, 19:59 
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In March of this year, I wrote the following in another thread:

Quote:
If I could speculate as to the strength of the turboprop and jet markets, I think you have several factors at work. First, there are a lot of corporations (foreign and domestic) that are flush with cash right now. Add to that some favorable depreciation rules for the year, and that's going to equal airplane sales. Moreover, foreign corporations can come in and buy their shiny new jet, which in most cases is an appreciating asset, and finance it with US dollars, a depreciating liability. There's no finer combination in all of finance than that.

OTOH, there are a lot of folks in line to buy jets like the Mustang that I think are eventually going to get burned. Speculators, if you will. They buy jet slots, sit on them a year or two, and as their slot comes due they sell it for a profit to someone behind them in line. That works great until it doesn't, and eventually someone has to pony up $3M for a jet.


It's no surprise to anyone at this point that the last statement is coming true. I submit Philip Greenspun's latest entry about their Mustangs:

http://philip.greenspun.com/flying/cess ... g-for-sale

I should note, I greatly respect Philip and I think that selling those slots now is by far the best option available at the moment, but I do hate that of all people it's he that got caught up. Hopefully they'll be able to salvage some of their deposits, but it's going to be difficult.

Anyway, just thought I'd share... best of luck to Philip and his partners, their story will not be unique I'm sure.

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 Post subject: Re: VLJ Fallout
PostPosted: 01 Dec 2008, 06:12 
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Sucks to be those guys.

Why on earth would you start a charter operation using an asset the wouldn't be in your hands for 3 years?

That's crazy. Nobody knows what's going to happen tomorrow.


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