True. I was only thinking about planes currently in production.

Putting fuel burn/co2 emissions aside, the V is an excellent performer and strong value. In my case, it wouldn't have worked because even the cross section of the Phenom 300 didn't really work for us.

Always enjoy your posts in the Piaggio thread.

Cheers
Ed

A shocking outcome, but entirely correct for the given scenario. Basically $20K per month in cost of money. That buys a lot of fuel!

Now we know why people don't think about the true cost of CAPEX, it is so high.

The fact my plane burns more fuel is a relatively small factor in the true economic impact it has. The fact it cost a lot less than some choices has a much larger impact than the fuel usage.

Another nice thing about a lower hull value aircraft is that my economics scale more with usage and less with capital expense. If I fly more or fly less, that affects my overall budget more. For a high value aircraft, your cost of money is constant and you can't change that. If you end up flying less, still costs you. If I need to be frugal for some period of time, just fly less.

One way to think about this is to imagine the cost of money per month you saved over a more expensive airplane and then treat that sum as a fuel subsidy in your head. Then it doesn't seem so bad.

Mike C.

Piaggio is probably the largest pressurized cabin cross section you can fly single pilot.

The single pilot jets are all small cabin, sadly.

Mike C.

FWIW, I put a fully new interior in my Piaggio and people who fly new jets all the time prefer my interior. The reality is that interior designers at OEMs are always like a decade behind. And while I'm only 100 hrs in, my Piaggio has never been AOG. My TBM was AOG once due to an especially unfun starter/generator failure on approach. Piaggio maintenance has been better than I expected. Frankly, most of my effort has been ironing out Garmin kinks in VNAV and TCAS2.

It is pretty easy to evaluate the cost of capex.

The S&P 500 has a long-term return of about 10%.

(1) Inflation also makes your aircraft residual less valuable, so if you want to inflation adjust, you have to deflate your aircraft residual as well.
(2) 10-Year inflation breakeven is 2.3%. It's liquid so you could hedge it out.
https://fred.stlouisfed.org/series/T10YIE

Just get a BBJ

(1) Inflation also makes your aircraft residual less valuable, so if you want to inflation adjust, you have to deflate your aircraft residual as well.
(2) 10-Year inflation breakeven is 2.3%. It's liquid so you could hedge it out.
https://fred.stlouisfed.org/series/T10YIE

It’s really pretty simple, most aircraft owners who aren’t concerned about CAPEX will buy what they can afford, that doesn’t mean what’s the best value, they will buy the nicest, latest model aircraft they are comfortable writing a signature for. The majority of these people would not even fly in a Citation V with run out engines, much less buy one. Just like they wouldn’t trade the G Wagon for a Winnebago. These folks won’t blink at spending $10M for a late model CJ3+!

And Mike cannot afford to buy a CJ3+

So there’s your two groups. It doesn’t make either wrong, the thing that bugs me is that Mike keeps saying the guys who can are stupid.

Mike, buddy, it appears they know more about money than you.

Chip,

I have never met Mike but I think he knows plenty about how money works. I think people always think newer is better (capex) because there is an entire industry dedicated to telling them that it is the only option. You can get new car smell and nicer avionics in a lot of the older turbines. A lot of the jetcard/charter crowd unknowingly take their families in some pretty clapped out planes with sketchy pilots all of the time. The clapped out old plane has new paint and leather and they do not know the difference. The pilot has a costume on that looks official and they do not know the difference. Just because they are successful doesn't mean they know anything about airplane ownership. These are very successful people that know a lot about a lot of different things...aviation is not one of them a lot of the time. I am happy the new car smell crowd is out there because it keeps the ecosystem running. Mike is not wrong..just blunt.

It’s not so much that newer is better, it is that people with that amount of disposable income want new. I currently have a client comparing a 2005 King Air B200 with a brand new 260, the 260 is nearly twice the Capex, the B200 has better useful load, can be made just as nice as the new one, can be converted to G1000 NXi and really is as good, if not better in every way… the 260 is new.

Prior to starting Jet Acquisitions, I would have told you about the same thing Mike would say, 8 years later, several new airplanes later, I don’t think anything about it.

You are right that there’s a lot of charter customers flying in clapped out airplanes unaware, but those aren’t typically the folks we represent. If it was one client who doubled their original budget to buy new, I would think it was an oddity, after experiencing it multiple times I now know that there’s just something about buying a new or nearly new aircraft that is a driving force.

I know I give Mike a hard time, I actually like Mike and appreciate his contributions, but I do think he gets so blinded by his own perspective that he starts alienating and offending people without realizing it.

Oh, I'm sure he realizes it all right, he just doesn't give a #$%&

And Chip, I'm surprised that with the run up in KA prices, a new 260 would cost twice what that B200 would cost. I would have figured these days the delta was more like $20-$50 ... *laughing* ... I don't think you can use the words "bargain" and "B200" in the same sentence any more ...

Happy thanksgiving, all!

Cheers

Ed,

Thank you for taking the time to post. I am a TBMOPA member and found your post over there as well. Quite compelling. You seem to be in the best position to provide council having similar circumstances and also having flown all the birds. One of the most interesting points you make is about how each flies from a pilot's perspective. I think this is a big deal for owner pilots that doesn't get talked about much. How do you think the TBM handles relative to the others? I personally think the TBM is a little heavy in the yoke, but it is also the largest AC I have piloted and probably don't have a good perspective. The others are a Bonanza / Cub / Cessna pistons. Would you share with us your flight experience and the progression of planes you have own/flown?

Also a very interesting take on potential AC values if/when a corporate event occurs. I will keep my fingers crossed that someone reputable rescues the Piaggio brand and gets them back into consumer production (with Garmin avionics!). In the mean time, I will keep my eyes peeled for a newer low time bird. Let me know if you ever stop through the Memphis area. Wilson Air at KMEM is CAA and also KNQA (my home 'drome) has a huge runway and good fuel prices also!

I just did an in airplane checkout in my hangar neighbors TBM-850 and I have flown a few trips in it. It is a magnificent airplane. My biggest gripe is getting in the cockpit without a pilot door.

As for Capex cost of airplanes, I did not see anyone looking at the tax benefits of aircraft ownership. Between accelerated depreciation and airplanes being 5 year property that goes to zero, the tax man can pay a big chunk of the capex for some buyers. You just have to keep the trade up game going and when it comes time to liquidate, you have to hope that it doesn't matter.