The best—and worst— buys in business jets
Vref, the transactional-market tracking service, recently created a pair of best-buy lists that underscore the hit business jet valuations have taken since 2008.
The lists, which appear in Vref’s quarterly Market Leader newsletter, rank 47 aircraft models, manufactured in 2008 and 2012, by the percentage of value they’ve lost since they were new: the greater the depreciation, the better the buy. (Conversely, of course, if you already own one of these models, the higher it is on the list, the more you’ve lost.)
The survey includes helicopters as well as turbine, turboprop, and piston airplanes, but business jets led the pack by far in loss of value. They took the top 12 places for 2008 aircraft and the top nine among 2012 models.
The Learjet 60XR headed the list of 2008 losers, shedding 74 percent of its value; the G200 came in second, losing 69 percent (see table). Among 2012 models, the G200* lost the most, dropping 61 percent; the 60XR came in a close second, also with a decline of 61 percent. Talk of the resiliency of the large-cabin jet market notwithstanding, moreover, Gulfstream’s G450 and Bombardier’s Global XRS made the Top 10 of both lists.
If you bought an Embraer Phenom 100 in 2008 or 2012, you have less reason to scowl. The jet with the best value retention from both of those years, it lost only 29 percent since 2008 and 31 percent since 2012. (Thus, a 2008 Phenom 100 retains about as much of its value as one that’s only half its age, though Embraer was able to invest in improvements and boost the jet’s list price during this period, a reflection of strong demand.)
In all, only two of the business jets ranked by Vref escaped the lists of the Top 20 value losers from ’08 and ’12—the Phenom cited above and the CitationJet 2+. Meanwhile, only six non-jets placed in the Top 20 for depreciation (four Beechcraft King Air models, a Piper Meridian, and an Airbus EC130B4 helicopter). Otherwise, the “best” jets in terms of value retention were the 2008 G550, with a 44 percent decline; and the 2012 Falcon 2000LX, which lost 35 percent.
Will the pace of value loss decelerate anytime soon? “As long as we have low interest rates and low fuel prices, and the economy is plugging along at 2 percent [annual growth rate], I don’t think things are going to change much in the jet market,” says Iowa-based Vref’s new publisher, Rick Cox.
James Wynbrandt is a private pilot and longtime BJT contributor.