Bluebook Perspectives: Heat - Thunder and Politics
/by Carl Janssens, ASA | Aircraft Bluebook — Price Digest
Vol. 25, No. 3 | September 5, 2012 | Go to Charts
From a weather perspective, the first quarter of 2012 in Kansas City, wasn’t so bad. What should have been snow and ice, turned out to be an early Spring. Second quarter April showers brought some May flowers, but after that it got hot, really hot – Arizona hot. Or, in the words of Airman Adrian Cronauer in the film Good Morning Vietnam, “It’s hot!” With the heat came … nothing. Mother Nature dried her tear ducts. A severe drought not only ensued, but is still in progress. Not to say there haven’t been occasional claps of thunder, but nothing apart from hit and miss precipitation. The only thing in abundance is politics. As everyone knows by tuning into their favorite media outlet, it is the Olympics of American politics.
No, this isn’t about weather or politics, but a great metaphor to describe the current general and business aviation re-sale economy.
Talk about heat, the ongoing battle over user’s fees has the interest of general aviation standing at attention. Not that user fees will cause a grinding halt to general aviation, but it will certainly stifle its spirit. That’s not good. Then, there are environmental issues, such as taking the low lead out of avgas in California. Buyers and sellers are keenly aware of these and other issues impacting our aviation marketplace. After these hurdles are cleared, then the aircraft’s time and condition, along with market perception, will make up the sweet spot that makes a deal happen.
Along with the heat, there is a drought. Our industry has been a dustbowl since 2008. Even in a drought, an occasional clap of thunder happens. Not frequently, just here and there. Like thunder, there are similar pockets of activity that continue to bring relief, and more importantly, movement to the pre-owned market. New sales by aircraft manufacturers bring a compounded chain reaction. Market perceptions are related to the amount of activity being experienced in the pre-owned market. Moving the pre-owned inventory entails incredible knowledge and insight on the part of the aircraft dealer/broker. Bluebook help sheets collected from various dealers and brokers, report positive sales activity to others hoping activity will pick up. Just like a summer thunderstorm, it’s a hit and miss scenario.
The presidential and national elections are dragging the economy, including the pre-owned aircraft market. Seems like Wall Street is slumbering in an attempt to wait and see what kind of day with arise on November 6, 2012. At least this election is anticipated to be decisive, and not a repeat of the November 2000 election. What’s good or bad will be decided by the people.
Values have been predictable, as reference in Bluebook-At-A-Glance. A majority of aircraft in the jet category trended downward when compared to summer 2012 Bluebook values. Reasons include: better than average inventories, a buyer’s market, and finance. Turboprops were mostly stable with little trending when compared to the previous reporting quarter. Likewise, Aircraft Bluebook – Price Digest is reporting a stable market for the multi, single and helicopter categories with minimal trending.
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