The lowest number that the Cox Jet Index fell to, during the Global Financial Crisis (GFC) was 179 points in May 2008. The highest was 310 points before GFC in February 2007.
Since late October of 2009, the Cox Jet Index has risen by almost 14%.
Before GFC at the beginning of October 2007, the total number of Turbine Biz-Av aircraft available for purchase (advertised, both ‘on’ and ‘off’ market, worldwide) was pegged at 2,469 aircraft. This equated to about 8.8% out of 28,057 total aircraft.
Even though it is agreed by most economists that we had past the statistically lowest point of the GFC, the total number of Turbine Biz-Av aircraft available for purchase (advertised, both ‘on’ and ‘off’ market, worldwide) reached its peak just after the U.S. Independence Day celebration in July of 2009. Today, on November 4th, 2010 there are currently 4,100 Turbine Biz-Av aircraft available for purchase (advertised, both ‘on’ and ‘off’ market, worldwide) which is 12.98% out of 31,598 total aircraft.
The Cox Jet Index also includes a composite aircraft value number which has been derived by taking the lowest asking prices, percentage for sale, and days on market numbers for all of the following aircraft:
- Pilatus PC12
- Beechcraft King Air 200
- Cessna Citation Jet (525)
- Cessna Citation Bravo
- Bombardier Learjet 60
- Hawker 800XP
- Cessna Citation XL
- Dassault Falcon 50EX
- Bombardier Challenger 604
- Gulfstream GIVSP
- Dassault Falcon 900B
Before GFC, the composite/average lowest asking price (value reference) was pegged at $9,182,272.73 U.S.D. Unfortunately today’s Market Report has this number at its lowest ever point at $4,702,181.82, which reflects a 51.12% drop in value (worth.)
With interest rates now set at an all-time low, and with the U.S. Treasury effectively printing $600,000,000,000 U.S. D. As an attempt to push us as far away as possible from the darkness that was the GFC, what outlooks can BizAv users and speculators expect to see?
I believe that we have to all look towards a five-year repair period, to provide sufficient post-GFC growth. Everything has been halved in value thanks to the GFC. These values are the real paradigm, so don’t expect anything close to a ten-percent market value rise per annum, over the next five years. Actually I predict that we might realize less than half of this percentage rise per annum instead. So let’s use 4% per annum, as my prediction. This shall result in the following market changes by the end of 2015:
- Pilatus PC12 Up By $310,000.00 U.S.D.
- Beechcraft King Air 200 Up By $109,800.00 U.S.D.
- Cessna Citation Jet (525) Up By $238,000.00 U.S.D.
- Cessna Citation Bravo Up By $380,000.00 U.S.D.
- Bombardier Learjet 60 Up By $550,000.00 U.S.D.
- Hawker 800XP Up By $599,000.00 U.S.D.
- Cessna Citation XL Up By $530,000.00 U.S.D.
- Dassault Falcon 50EX Up By $1,399,000.00 U.S.D.
- Bombardier Challenger 604 Up By $1,980,000.00 U.S.D.
- Gulfstream GIVSP Up By $2,590,000.00 U.S.D.
- Dassault Falcon 900B Up By $1,659,000.00 U.S.D.
Needless to say, we need the composite/average lowest asking price (value reference) to stop descending before my 4% P.A. increase can promise these value increases.
Lastly, the issue of Jet-Fuel pricing is currently not a major factor, as we in the U.S.A. are able to buy a U.S.G. of Jet-A1 for an average of $4.66. When this number doubles like it is predicted to do so, then the revolution between old and new aircraft shall deliver a conqueror to the used market, where-by most aircraft built before 1985 will probably be laid to rest in a breakers yard due to their unreasonably high operating and maintenance costs. This would hone down the total BizAv fleet by a little over 30% (10,112 aircraft approximately.)