The Latest Dilemma to Hit Certain Aircraft Owners
When the ADS-B Out mandate comes into effect in 2020, we estimate that about 11% of the European private jet fleet will be permanently grounded due to the cost of installing ADS-B Out in conjunction with other standard maintenance requirements. Aircraft valued under one million dollars will have an interesting dilemma with the cost of ADS-B Out (which varies anywhere between $25,000 and $300,000) and any cost of upcoming maintenance inspections or overhauls resulting in a bill higher than or almost as high as the aircraft’s market value once they are completed.
You must install ADS-B Out by the 2020 deadline or your aircraft will be grounded, and you must complete any due maintenance and overhauls on your aircraft when required or it will be grounded. The combined costs of these events could push owners to decide that the cost of these upgrades when combined with due maintenance is beyond economic reason and write off their aircraft all together.
There are a lot of unknowns for these aircraft owners and the aircraft themselves. Presumably some owners will look to sell their aircraft for its parts, but with so many parts becoming
available worldwide on these older aircraft, parts’ prices will decline. We believe that many of these current owners will use this as a chance to upgrade into a newer technology aircraft, one that is already ADS-B Out compliant and with lower operating costs. One item is certain however: this is the first time in recent memory that an avionics upgrade like this will result in a large-scale obsolescence of aircraft. How this affects the industry is yet to be seen.
