Reference manuals

Acquisition costs

It is necessary to differentiate the acquisition costs of new aircraft, which are generally stable, from those of used aircraft, which are very volatile but more negotiable. Prices for the latter are directly influenced by the state of health of the stock markets.

New aircraft

A new aircraft is normally purchased directly from the manufacturer. The purchase price, as set by the manufacturer, corresponds to the price for the standard model for the aircraft. Various options, at different costs, can be added. These can include avionic specifications, a more comfortable cabin arrangement, a personalized exterior design, and even increased range capability for some aircraft.

 

The purchase price will often include the cost of a qualification in flying the type of aircraft in question for one or more pilots. The manufacturer may also grant discounts based on market conditions. Discounts may be given in the light of existing business relations which the manufacturer wishes to maintain, as well as those they hope to create in the future with new clients.

Used aircraft

The factors influencing the value of a pre-owned aircraft are very numerous. Two aircraft of the same type, built in the same year, and having the same equipment, may appear similar. However, these two aircraft could be offered on the market at very different prices. The most important factors are:

 

  • The purchase price of an aircraft is primarily influenced by its general condition, the number of flight hours of its airframe and its engines, and the wear of its major components and its paint work. For example, it will be necessary to take into account the conditions under which the aircraft has been operated. The operation of an aircraft in humid regions can make its structure more vulnerable to corrosion.

  • It is then necessary to take into consideration the time remaining until the aircraft's next overhaul is due, the status of the inspections, whether optional services were or were not carried out and the value of the avionics on the current market. Indeed, a plane which has just had an engine overhaul can be subject to negotiation, thereby incurring a rise in asking price of several hundreds of thousands of Euros.

  • The country in which the aircraft is registered is also a important factor; the transfer of registration to another register can result in significant, and sometimes insurmountable, administrative, legal and financial constraints.

 

To be able to determine the fair market value of a used aircraft, specialists in this area rely on the prices given by reference manuals listing most of the used aircraft for sale on the market.