New Plane Market in 2018

The other issue is the fringe players that are putting out better and better equipment every day. It's hard to justify a new 172 when the DA40 and P2010 are arguably (much?) better planes at around the same price. Then you have the DA62 making the Baron look old and worn out. The Baron has a couple of knots on the DA62 (although at a much higher fuel burn), but the Diamond can actually fill its seat and still go somewhere.

Plus the Epic E1000 will be here soon and that's sure to make an impact in the "personal" turboprop market. I also think the DA50 in its three variants would be a very intriguing plane. It solves the DA40's problem of not competing with the Cirrus and TTx.

All that said, all of these planes cost much more than they should. New planes are very hard to justify unless you're in the air A LOT.

 

they all suck except the PC12

 

Of course. How quickly we forget. It's the only plane worthy of being in the sky.

 

You forgot about ONE wildcard.....IMMEDIATE expensing on your tax return if reform passes today. For people buying airplanes that is an immediate 35% discount on price.

 

As long as you can put up with flying around with a paper bag over your head out of embarrassment for its looks.

 

I assume you caught the joke?

 

You are kidding right? The Da62 rivals the PC12 as the worlds ugliest airplane. Give me a well built Baron over that grasshopper looking no name airplane any day and twice on Sunday!

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Of course

 

I actually like the way the DA62 looks. It's different. I can see why people call it ugly, but seriously, let's not put it in the same category as the PC12. That ugly thing is in a class of its own.

 

Your reference to Piper twins is to the Seneca, I assume. The Seminole is a trainer, and mostly sold to big fleet operators who need a multiengine trainer (and they all need that).

The Seneca fills a different, smaller niche. It can carry 6 people, with bags, from fairly hot and high airports, with twin engine redundancy. There are places in the world where those are important features.

As for the Baron, I think those are bought by people who want a new Baron, and don't want anything else. There is nothing like rumbling along in a Baron with those big Continental engines out there... they are really great airplanes. It's a small market (I bet they don't sell 20/year), but it's a devoted market. And those buyers will eventually buy a King Air... Probably the same buyer who had a new Bonanza previously.

 

Been beat severely with the "ugly stick" also applies to the Hawker/Beechcraft Premier. Had the misfortune to see one on an FBO ramp - flat horrible proportions.

 

You know you are insulting the greatest airplane in the history of mankind don't you?

 

Can't talk about the piston market as that is an area I have no dealings in. But, the jet world I can weigh in on.

The large jet world has finally gone soft. This would be the Gulfstream 550, 650, Global, top Falcons and BBJ. That segment had kept a lot of solvency for the related companies as the smaller aircraft segments foundered. The used prices have taken huge hits to the extent that the financial institutions are revisiting the depreciation schedules for leases. Each individual aircraft model will have a piece of a unique story (Global buyers are waiting for the 7000 to arrive, G550 is being discontinued, BBJ buyers waiting for the Max versions) but the net result is that they are all struggling for sales of new aircraft that are in production.

There are press reports talking of optimism in the mid and light jets at long last.

The used market is seeing several factors weighing it down.
- Financing standards have tightened.
- Leasing for an aircraft older than 10 years is far tougher
- Cockpit mandates coming due January 1, 2020 that finds a lot of the 1980s and 1990s jet with serious/expensive pathways to compliance.
- The older aircraft are also seeing some manufacturer support of avionics equipment discontinued

When that mandate of 1/1/2020 comes along do not be surprised when there are a lot of aircraft permanently parked and ultimately parted out.

In Rob's original post he questions how even high net worth people can afford these $30+ mil aircraft. Well, one way is a lease at .75% to 1% a month. But one is still going to be faced with an annual operating budget of $1.5 to $3 mil a year; bad but not insurmountable for many.

 

To answer the question about how even a billionaire could afford to operate a large jet, let's think about this. If you have $1 billion in assets, mostly in investments, you should be able to spend at least 2% annually. Let's throw in another 1-2% for taxes. But 2% for spending is reasonable, before taxes. That's $20 million/year. That's a lot of spending money...

In that context, spending $2-3 million/year to support your flight operation isn't all that much-- only 10-15% of your other annual spending. And yet that might well be your largest single line item, other than taxes.

 

Just like with Ferraris, there are some good reasons to buy used! Still within a $20 million spending budget, though.

Also, in most cases, there are some advantages to buying new. The tax savings (especially under the immediate write-off system) can be substantial, and the maintenance savings are also substantial, while the airplane is under warranty. That can reduce the operating budget. But new is still more than used...

 

Also when new, your way and with whatever is latest and greatest. You inherit nothing of what someone else was wanting. When one gets to a BBJ this is a significant difference since these interiors are highly personalized in configuration, features and styling.

 

I remember when a brand new Boeing 707 was $6 million. And I remember seeing a 2-seat Cherokee trainer for $8000...

 

Well you used to could buy a GTO for 11k in 1962 also...

 

Remember reading the new the B-52 was the most expensive plane ever built... $8 million.

 

I grew up decidedly middle class (Dad worked for GM), yet my parents were able to afford flying lessons for me and my Dad ($13/$13/hr for C150/instructor in 1976). I owned an airplane for over 25yrs. However I don't think I would have had it nearly that long if I were not able to perform assisted maintenance and inspections. I think GA now is to the point of being like owning exotics. Oshkosh is just a big Cars and Coffee, with an abundance of 'tuners'.

 

You need to go to a smaller airfield and train in something like a 152. My kids are doing it at a little place around here, and I think it's less that $140/hour, but in a 152.

 

DA42 should be in the mix too as an SR22/tt comparable. Lotsa water to fly over here on the outer banks