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Ask the Experts:
Are there any aircraft with stable values?
  

With the economy still not showing any signs of recovery and with aircraft inventories rising, one would conclude that the values on aircraft will continue to decline.   Never before, in recent history, have we seen almost all aircraft decline in value.  Everything from the most modest piston driven aircraft to the large corporate jets.  Add to this the bashing that the corporate market has received from our government and the news media, that has resulted in even more aircraft being placed on the already large surplus inventory and it is no wonder that values drop.

As one reads V-Ref summary for the quarter it is obvious that things may not be getting better any time soon.  However, there is a segment of aviation that has not seen the rapid decline in values.  That is the Warbird community.  Mark Clark of Courtesy Aircraft in Rockford, IL reports “The Warbird market has, for the most part, remained fairly stable.  A few owners have had to sell their aircraft due to financial reasons , however, there seem to be enough buyers that the prices did not have to be lowered to facilitate the sale.”  Mr. Clark goes on to explain that “the supply of vintage aircraft is a fixed number and the cost of restoration continues to climb making currently flying aircraft a good value.  The interest in vintage Warbirds seems to continue and most owners can look at them as an investment in history that has outperformed the market in the current environment.”
 

Not only have the values in Warbirds, out performed the rest of the aviation market, they have also most certainly outperformed the stock market.  With this in mind it might be worthwhile looking into purchasing an Warbird as they are currently holding their value and will, as Mr. Clark, points out continue to increase in value simply because of supply and demand. 

How much would a person have to spend to purchase this type of an aircraft?  Typically the trainers will fetch a price between $100,000 to $300,000.  Granted there are some recent restorations in this category that have sold on the other side of $500,000.  However, you can still purchase a nice running aircraft in good condition for the amount stated above.  Moving beyond the trainers into the fighters, the most well known and available fighter would be the P-51 Mustang.  For this aircraft be prepared to pay 1.5 million for a nice aircraft and up to 2.5 million for a recent restoration.  The bombers are a difficult market to predict prices as there are far less of them still flying.  There are and have been some Korean War era jets, but those are few as well and much like the bombers the cost to fly these aircraft is quite high.

Even in today’s credit crunch, there is still financing available for these types of aircraft.  And why not, as they have held their value far better than other aircraft, which tends to make the bankers happier.

While this is not “breaking news” to anyone in the industry, it certainly is a bright spot and I felt it was worth sharing when all the other news is doom and gloom.

Written by  Wally Zook of Wally Zook and Associates Aircraft Finance Corp. a member of the Professional Aircraft Lenders Association.  www.zookair.com .