Will the Bizjet Bubble Burst?

Introducing an "airbag" for your aircraft's value

I was reading a story on AINonline recently that stated that “newly released analysis from Ascend by Cirium showed that market values for many business jets had increased perhaps unsustainably during the post-pandemic period on a constant age basis (comparing the same age of aircraft over time).”

How “unsustainably,” you ask? Well, according to the story, Ascend’s senior appraiser and principal aviation analyst Syed Zaidi, the surge of new users into the business aircraft market had led to a “60 percent rise in midsize jet values from a year ago and approximately 45 percent higher for very light and super-midsize jets. Long-range jets values increased by 20 percent year-over-year.”

Zaidi warned that biz jet market values have entered “bubble” territory and constitute a real risk to owners, financiers, and investors, as the market-to-base value ratios are “significantly” above 100 percent across most aircraft segments.

He added that as the airlines continue to repair their schedules and return to pre-pandemic frequencies, the staying power of those new business aircraft users will “prove a true test for the business aviation industry.”

So, will the bubble burst?

In short, when the world reopened for business, many first-time buyers rushed out and paid too much for their airplanes. And now that travel is finding its equilibrium, those sky-high jet prices are returning to earth. So, the answer is, depending on how far those prices fall, some of those landings won’t be very soft.

But don’t think there’s nothing owners can do about maintaining the resale value of their aircraft. In fact, one card they hold in their favor is something that few first-time, or even seasoned owners for that matter, ever think about – that is, making sure the quality, accuracy, and completeness of their aircraft’s operational and maintenance logbooks are as good as they can be.

A healthy logbook is a valuable logbook.

According to Jim Blessing, President of AirFleet Capital, Inc, “The accuracy of the logbooks is critical when we are determining the value of any airplane. The logs are the only way we have to verify that all the required inspections and maintenance have been accomplished correctly. We’ll walk away from an aircraft with incomplete logbooks.”

“I recently had an example of how missing logs impacted the value of an airplane. It was a 40-year-old business jet (yes, old, but in today’s world, not over the hill), and it was missing 15 years’ worth of its logbooks,” he said. “Needless to say, we were unable to get comfortable with assessing the financing value of that aircraft.”

While that’s a rather extreme example, it’s not that uncommon for some of an aircraft’s records to go missing sometime in its life. Especially when said aircraft spends a lot of time away from its home base, often requiring its logbooks to be shipped to remote locations for AOG repairs.

Of course, all those issues are eliminated when the aircraft’s records are digitized, organized and securely stored on Bluetail’s cloud-based platform. Once safely there, any such records are searchable and can be shared with anyone, anywhere on any device, with no risk of loss.

“Like having an airplane on an engine maintenance program, having digital logbooks is seen as a value-add to any aircraft today,” Blessing said. “Owners don’t appreciate how much of their aircraft’s value is tied up in their maintenance logs. With digital logs, there’s never a worry about loss or having them held hostage by a disgruntled employee. It has happened.”

To learn more about how easily Bluetail can help you maintain the maximum value of your aircraft asset, schedule your free personalized demo here.