Anyone still wondering if this is a seller's market?

What's happened?

Nothing to buy. Inventory levels are dropping, maybe to the lowest point ever.

I’ve never seen it like this, not even in 2008.

I would have thought in 2008 there were a lot of planes on the market. U must be talking pre-recession?

Yes, I probably should have said 2007-2008, the inventory hit its lowest point in early 2008 and then the recession changed everything, it was really the big companies shedding their big airplanes that drove prices down. Inventory can increase without anything dramatic happening, but when a big company sells a $50MM Gulfstream for $30MM what’s a $30MM airplane worth... the pressure went from the top down. Lots of immediate liquidations as boards decided they didn’t like the optics and ordered the airplanes sold immediately.

The pain was less for turboprops and pistons, but a lot of jets fell to nearly half of their pre-recession values.

The question this time is will it fall?

Covid seems to be a different dynamic. My gut tells me it will fall, that it always does. I’m just not sure when that will be.

The bubble will burst

Yes, I probably should have said 2007-2008, the inventory hit its lowest point in early 2008 and then the recession changed everything, it was really the big companies shedding their big airplanes that drove prices down. Inventory can increase without anything dramatic happening, but when a big company sells a $50MM Gulfstream for $30MM what’s a $30MM airplane worth... the pressure went from the top down. Lots of immediate liquidations as boards decided they didn’t like the optics and ordered the airplanes sold immediately.

The pain was less for turboprops and pistons, but a lot of jets fell to nearly half of their pre-recession values.

The question this time is will it fall?

Covid seems to be a different dynamic. My gut tells me it will fall, that it always does. I’m just not sure when that will be.

There's always the "this time it's different" and in the end it's never different.

But I wonder if this time it's different. The bubble isn't driven by a hot economy, it's driven by a fundamental shift in the environment and capital/cashflow is being redeployed.

This isn't a bubble of people all of a sudden having more money so now they buy a plane, seems more an issue of people taking the money they already had and choosing to buy a plane instead of something else. When/if people's attitudes do back to "normal" they won't have to sell in a rush.

Know of a fixed gear 260 if you want an intro.

-J

How do you account for sales/use taxes on all those? Seems like 20-25 transactions would add up quick

Even if you use a Corp/LLC registered in another state, a Florida resident being a member would require remittance

Dealer exemption on sales tax.

In some states, people pose as dealers so they don't have to pay sales tax. They even advertise the planes for sale but with no intention of selling as evidence for this. It can be frustrating for a buyer to see the advert and not get any response to it.

Mike C.

I’d say at 25 Citations per year, if he’s not a dealer, who is?

Robert T

Tarver is definitely a dealer.

Some others aren't.

Mike C.

87 is up 50+ cents in 1.5 months from $2.03 to $2.57. My guess is Avgas will follow. Then we have 2007/2008 all over again but what will happen to 100LL and other dinosaur juice based aerovehicles, particularly if 100LL hits $10/Gal.

Will G1000 swoop in or will Swift pull ahead? At what point does the $100 hamburger become unattractive?

At what point does the board of the single member LLC put the Poo Poo on the Pilatapus? If corporate Aviation gets attacked again will they be shamed into parking their time machines?

Will YeZee grow up and stop renting grounded 747s for photo shoots because the APU fuel wasn’t hedged in 2020 like the airlines could afford to buy it at $0.80/Gal? Granted, I would be broken apart if Kim ditched me.

Know of a fixed gear 260 if you want an intro.

-J