The Peak Seasons for Buying (and Selling) an Airplane
Worldwide revenues for airplanes topped $20 billion in 2016. We can attest to the fact that buying and selling aircrafts is a massive industry, but we want to break it down even further. We can help make buying an aircraft as enjoyable as flying one. Keep reading for tips on how to buy or sell planes, and our picks for the best times to buy and sell.
Buying an Airplane
Before you consider buying an airplane, it is a good idea to think about what you will be using it for. You need to ask yourself what your mission is, and how to best achieve your goals. This may help determine when the optimal time for buying a plane is.
If you are using your airplane professionally, you may be eligible to write off expenses related to purchasing the plane. Certain considerations, like the hobby loss rule, may affect how much money you have to pay the government. Before you buy an airplane, you will also want to consider the financing as well.
This leads to the conclusion that the best time to buy an airplane is January or February, or early in the year. You have more time to make deductions on your taxes. It may also be a good idea to test the aircraft before you make your final purchasing decision.
In many parts of the world, winter has the worst flying conditions. If you can operate your future plane in harsh conditions, you can fly with greater confidence.
Selling an Airplane
Summer is the peak season for flying. People are out enjoying the spectacular views that the sunshine gives them. It is no secret that pilots love summer flying. Despite the fact that there are a few different factors that pilots should consider, it is hard to keep people out of the air when May rolls into June.
It is not only the recreational pilots who fly in the summer. Professional pilots take vacationers to whichever prime holiday spot that they have picked for the year.
As someone selling an airplane, you can take advantage of this. The laws of supply and demand suggest that when more people demand something, it’s easier to sell. In Spring and early Summer, more and more people are looking to take to the air. It is easier to get your full asking price and a quicker transaction between the months of March and July.
One of the most difficult aspects of selling an airplane involves pricing it correctly. When you price it low, it is easier to sell, but you may be missing out on some cash. If you price it high, you can attain a higher margin, but it may be more difficult to find a buyer. Selling your aircraft in Spring and early Summer means that you will receive a large number of calls.
These calls can give you a better indication of what your plane is actually worth. While brokers or experienced pros may know the exact value of the plane, someone with little practice in the art of selling an airplane might find this useful.
In our research, we found that manufacturers do a little bit better towards the end of the year. The General Aviation Manufacturers Association released a report indicating that shipments of the Cessna CE-172, for example, in quarter 4 (38) are nearly double those of quarter 2 (20). They do not suggest if this is due to the fact that it is a buyer’s market or a seller’s market, however.
Another fact you should keep in mind is that the market for aircraft is closely tied to the wider market. The US recovered from the financial crisis better than Europe did. Between 2014 and 2015, flight activity increased by 1.6% in the US, while it declined by 2.5% in Europe. Macro trends can have an impact from month to month, which may change how and when you buy an airplane.
38% of Textron’s revenue comes from overseas. This is a global market. When you are considering the timing of buying or selling an airplane, you will also need to know how your currency is doing. The best time to buy or sell an airplane may not be dictated by the season, but by the strength of the dollar.
Finally, you should also know that buying an aircraft is not like buying a car. It can take a couple months to go through the entire process. There are steps that you need to take, including checking the aircraft and flying it to make sure it is in good condition. You can’t just fly an aircraft off of the lot.
If you have any questions about buying or selling an airplane, we can help. Contact us today for more tips and tricks on how to purchase or sell an airplane.