Know Your Aircraft’s Competition

Know Your Aircraft’s Competition

July 2, 2014

Any time you are going to sell something, it is vitally important to know the marketplace you are entering into in order to adequately position your asset competitively. When the time comes to sell your aircraft, ask your broker to continually keep you notified about what is happening with other competing aircraft on the market.

First, look at the aircraft you are directly competing against in your make and model. Aircraft values are relative; the value of your plane is largely derived from the other jets marketed and how they compare to one another. Other aircraft may reduce their prices or have certain attributes and options that will affect the value of your aircraft. Also, your broker should keep you informed on new entrants entering your marketplace and how this will affect your aircraft’s position. Throughout the sale process, the perceived value of your aircraft will change as prices change, you complete major inspections and other aircraft become available. In you are unaware or do not keep up to date with pricing and offerings, then you run the risk of losing your attraction in the marketplace resulting in a far longer resale time and ultimately a lower price attained.

Second, keep an eye on competing models of aircraft on the market. One of the consequences of the great recession in aircraft is that buyers are more focused on what they can get for their money, as opposed to solely focusing on a specific aircraft model. This means that a buyer might be interested in your aircraft, but they will also be looking at what they can get for the same or similar pricing in other models. If they can pay a similar price for an aircraft that goes farther or holds more passengers than yours, they will very likely buy the aircraft with the higher functionality (assuming the age is similar). A specific example of this is in the Challenger 300 and Challenger 605 markets. These markets are experiencing very interesting price variances right now. Challenger 300s of the same year and hours as a Challenger 605 are actually more expensive even though the 605 has a longer range and larger cabin. A buyer will look at both markets to decide which aircraft to purchase, because the pricing is so similar. The Challenger 300 owner needs to expect this of their potential buyer pool. Those buyers are going to have their pricing ideas greatly affected by the perceived value of the 605. If the 300 owner doesn’t keep an active eye on competing markets, they risk losing their potential buyers to an entirely different model.

It’s a lot to stay updated on but if you want to stay well positioned, knowing your competition is very important. Your aircraft broker should be in continual conversations with you in regards to your aircraft and it’s position in the marketplace.

 

Blogs are written from real world experience by Colibri Aircraft’s individuals. If you have any questions or comments about the topic of this blog, please feel free to contact us at enquiries@colibriaircraft.com