March 2022 Newsletter

We are excited to bring you our latest newsletter.  As we’ve grown over the past 13 years, our staff have truly become experts with valuable perspectives, so we decided to share their thoughts directly with you.  Below, our Sales Agents opine that fear of missing out (FOMO) among Sellers, not Buyers, may be significantly impacting supply and prices. We hope you find it useful.

Will FOMO lead to a Market Correction?

“What a difference a few years makes.  Gone are the days when private/GA was vilified.  The inconveniences and health concerns of airline travel, combined with the wealth generated by asset inflation, have driven demand for aircraft to new heights.  Sarce inventory has perpetuated fear of being left behind among buyers, and prices have responded accordingly.  Might that same fear of missing out (FOMO) amongst sellers create a corresponding inflection point in pricing?

The narrative of buyer FOMO is well documented, but do emotions only drive the impulse to buy? Prices have risen so much that there may be rivaling FOMO burning inside owners – to SELL.  With everyday goods in short supply (tried purchasing a car or truck lately?), it’s no secret that anyone in possession of an airplane has an appreciated asset.  It’s not hard to see that the current market conditions are leading many to ponder “have aircraft prices topped out?” 

The demand side of the equation may answer this before the supply side can respond.  The S&P has stalled and the Fed intends to raise rates.  But even if demand remains strong, might more supply start to work its way into the market due to owners’ fear of missing the top?  We ask that hypothetically, but do believe some degree of that is happening already. So, what is our counsel?

The vast majority of you should ignore the noise and cherish what you have. One caveat – if you are looking to invest in avionics or other improvements, consider how these depreciate over time and account not only for the money spent, but also the opportunity cost (aka flying time).

For those wanting to upgrade, try to not focus on the lofty acquisition prices, but on the price delta between the two deals. Timing is an issue, of course. You prefer to not own two aircraft, or you can’t be without an aircraft.  Concurrent transactions add complexity with associated pitfalls; consider the benefits of working with a broker, like us, who can handle both sides.

Those who considered selling but put it off due to the hassle or sentimental attachment, now is the time. The market is stronger than ever.  It makes sense to cash-out before it’s too late.” 

As always, if there is anything we can help you with, or if you are interested in discussing the value of your aircraft in today’s market, please don’t hesitate to call or write.