2013–The Best Year to Buy?

2013–The Best Time to Buy?— Originally published in
BusinessAir Magazine, December 2012, Volume 22, No. 12.

For buyers still looking for the right aircraft, 2013 could be the best year to purchase an aircraft. The pre-owned market for light, mid and large cabin business jets continues to have a surplus of inventory and prices continue to decline. In popular pre-owned aircraft types such as Falcon 2000 and Legacy 600, inventory levels are approximately 17% of the fleet. Manufacturers have reduced prices on new aircraft in order to move new inventory, which has caused certain pre-owned values to fall. The inventory surplus has made sellers more aggressive with listing and selling prices as well as the terms they are willing to negotiate. Finally, with the rapid decline of aircraft repossessions by lenders, lender’s portfolios are in much better condition than they have been in years. Therefore, lenders are making funds available again, even, in some cases, on aircraft older than ten years. All of these factors could make 2013 one of the best years to purchase an aircraft.

These factors will also allow buyers to dictate terms in purchasing an aircraft. The purchase price will obviously be heavily negotiated both in the case of new aircraft and pre-owned aircraft. In the case of new aircraft, manufacturers’ contracts, which were previously considered non-negotiable, are becoming increasingly flexible. For pre-owned aircraft, buyers are able to negotiate costs of delivery to the inspection location as well as cost of delivery to the delivery location. Even the cost of certain inspections may be paid for by the seller. Buyers are also negotiating more stringent pre-purchase inspections, some which are not due for almost a year. With so many aircraft on the market, buyers aren’t afraid to walk away and find another aircraft if the inspection results are not satisfactory.

Finally, for those owners who are looking for large cabin aircraft and plan to travel in Europe, some of the increased cost expected in 2013 for the required European Union Emissions Trading Scheme (EU-ETS) has been eliminated for now by the signing into law of the European Union Emissions Trading Scheme Prohibition Action on November 27, 2012.

Amanda Applegate
Senior Transactional Counsel
Aerlex Law Group
Santa Monica, California
aapplegate@aerlex.com