What will happen to twin engine piston aircraft values over the next two years?

Question

Specifically, I am referring to those made in the 50's, 60's, and 70's. Consider fuel costs, current piston twin value trends, maintenance/ownership costs, and even the ratings cost. i have my ideas, I would like to hear from the industry experts!

Answer 1

Nothing... they will continue to follow the same trends they have for decades. Just because fuel prices are going up doesn't mean that they will be any more or less valuable. Avgas has always been more expensive, and if you went back and looked at the trends of of the street gasoline prices and avgas prices.. the avgas has increased at a greater rate, so the shock of street prices is felt more by the everyday user than the average piston engine operator.

Also, you would need to consider that aviation is a luxury item for most operators... they operate aircraft because it is a premium service...   if you saw someone pull up to a gas pump in a Jaguar or a new Mercedes... you would not imagine that the cost of fuel is going to affect whether or not they drive their car... they can afford a luxury car, they can afford the fuel to go in it. The same logic applies to someone that sports around in a Navajo or a C-421... they can afford to go to the ranch or skiing in their own plane.. the cost of fuel is not going to change that.  It is the weekend flyers, that are struggling to put gas in their plane as it is... that are going to be pushed over the edge and be forced to decide if they can still justify the expense. If they are using their plane and getting good service out of it.. they will continue to do so.. but if money was already tight... then sure they are going to get out of the committment.  Same thing with boats at the marina... you are going to start seeing some slips coming open because guys that were just barely keeping the ski boat or sailboat are not going to be able to justify only going to the lake once a Summer...but if they are going up there everyweekend,... well.. just have to cut back somewhere else.

Answer 2

Well there is actually a few things to consider with your question in my opinion:

Most General Aviation Light Twin's (Piper Apache, Aztec, Seneca, Seminole, Cessna 310's, 340, Beech Barons) will continue to be sluggish and decrease in value - due to a few factors:  The rising cost of Avgas, the increasing cost of engine overhauls (consider that on a Beech Baron for example a quality engine overhaul cost $30K per side) and newer aircraft coming into production that meet the speed and performance of the older twin at a lower operating cost.

Certain aircraft that fit a nitch will hold steady - aircraft like the Piper Navajo and Chieftain that have found a new home in cargo operations - although these are slowly being phased out for newer aircraft like the Cessna Caravan.  Cessna 400 series are still being used by private individuals and aviation charter companies will drop slightly but stay close to their current values.  

(You have to remember there are a few regulations that help this: Example flying passengers over water requires a twin engine aircraft)

Then the Turbo Prop market (Cessna Conquest I & II, King Airs, Cheyennes, etc) will see little change.

There is one last thing to consider and it is not the actual cost of owning or operating an aircraft and that is the economy and in my opinion this is the unknown.   A lot of small business that own their own aircraft are feeling the economic down turn in this country.  If to make ends meet they need to sell there company airplane this in my opinion can effect it the most.  The reason I say this is:  If the little company with 50 employees needs cash to stay a float sells there airplane no big effect now imagine 30,40,50 companies doing this all at the same time.  If you really need cash and you are competing with 20 or so airplanes on the market at the same time you reduce your price to get it sold and get the cash you need.  This is going to effect prices the most.  Sort of like the housing market, reduce, reduce, reduce to get it gone - off the books and liquidate.

This is my opinion - but who can forsee the future - probably some big Harvard Grad, with a comfortable D.C. desk job will tell you something different.  But I am in the aviation industry and the market is DEAD, and flooded with aircraft and no buyers.

Answer 3

They will go down.

While there are plenty of those Mercedes-driving twin owners alluded to by the previous answer, rising fuel costs and the general malaise in the economy brought on by a do-nothing Democrat-controlled congress reduces the number of people who are financially able to purchase a light twin. This will drive demand down. Similarly, existing twin owners are less likely to be able to afford to keep operating their airplanes and so the supply of used twins will increase. When demand decreases and/or supply increases, prices go down.