Pre-owned Aircraft. Upswing continues in pre-owned jet market by Bryan Comstock

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1 Pre-owned Aircraft 2004 Upswing continues in pre-owned jet market by Bryan Comstock alues among many pre-owned aircraft began to stabilize this year, with some even appreciating while others V sought traction amid slipping prices. This year will close having sustained a trend toward lowering inventory, and the impetus for continued tightening remains in place. Though interest rates are rising, they are low by historical standards, enabling buyers to secure attractive financing rates. Bonus depreciation, too, while considered by many to be just a new aircraft sales stimulus, offered some positive trickle-down effects on the used market. As the tax inducement begins to wane, buyers are paying even more attention to late-model, current-production used aircraft. Right now only about 15 percent of the available used fleet is 10 years old or newer, and many in this segment have begun to experience price increases a rare occurrence since prices across the board headed south a few years ago. Late-model, Pre-owned Jets a Hot Property According to figures from Utica, N.Y.-based JetNet, the Falcon 2000, 900EX and 50EX, Citation Excel, GV, Global Express, Learjet 45, Hawker 800XP, ACJ and BBJ all present fewer than 5 percent of their potential availability to the market, and pricing among them reflects this supply tightness. The size of the Falcon 2000 supply has not been this small in four years. In fact, at press time there was only one readily available for sale, down from 14 at the beginning of the year, making the Falcon twinjet one of the hottest properties in town. Of the 146 Falcon 900EXs produced, two are for sale, and of 89 Falcon 50EXs manufactured, four are available. Citation Excel choices stand at 14 out of a possible 372, which is on par with the availability at the beginning of the year. Current pricing runs from $7.395 million to $10.25 million. Joining the Excel as a perennial favorite since its introduction is the CJ2. Choices have increased slightly this year over last, but so too has the size of the CJ2 fleet. Cessna has produced about 225 of them and so the 14 currently available represent 6-percent availability. The earliest one carries a $4.495 million asking price and the latest deliverable CJ2 is priced at $1 million more. The Gulfstream V is in short supply, fluctuating between six and nine units all year long, and currently only eight are available. Asking prices run from just under $30 million for a 1996 model up to $36.5 million for a 2002 model. The GV s nemesis, the Global Express, presents just three of its 151 to the used market, down from nine early in the year. Learjet 45s also make the grade, with only eight up for grabs from a continuing production run that currently numbers more than 250. Two years ago there were 20 for sale and prices softened. This year availability has run from a high of 11 in February to a low of five in August. Prices run from $6.495 million up to $9.45 million for a very late model. Hawker 800XP production has eclipsed that of its predecessor, with 431 at present compared with 272 Hawker 800As and 800Bs. There are 17 Hawkers 800XPs for sale right now, up from a low of 13 in the spring and down from the type s most recent high of 20 in September. There were no Airbus Corporate Jetliners for sale at press time, nor did Jet- Net indicate that any of the 20 produced have ever been presented to the open market for resale. In comparison, there are three of 84 Boeing BBJs for sale right now, with asking prices in the low-$40 million range. While the above group represents some of the most sought-after iron, there

2 December 2004 Aviation International News 21 Market for pre-owned t-props improves after long down cycle by Paul Lowe October s NBAA Convention, primarily a showcase for all that is shiny and new in the business aviation world, also gave purveyors of preowned turboprops a fresh dose of optimism for next year. As they near the end of a year that saw some experience sales increases from 25 to 50 percent over last year, National Aircraft Resale Association (NARA) broker/dealers and others in the industry see a market revitalization, with prices stabilizing and inventory levels dropping off. Most of the market activity is in the newer pre-owned aircraft, primarily the still-in-production Beech King Air line. Old airplanes got really old very quickly in this last market downturn, said Dan Dickinson, NARA s vice chairman. The main issue on older airplanes is maintenance, and maintenance is expensive, he said. When you are working with some of these engines on a third and fourth overhaul, the cost can easily outweigh the value of the airplane. That is demonstrated by the fact that older airplanes are not selling for very much money. The airplanes where we see the activity are newer, and the newer the aircraft, the more the activity we see, said Dickinson. And that s true on the jets and turboprops. Meanwhile, what some perceive as a huge surplus of aircraft available on the used market in reality is the result of the large number of airplanes built between 1976 though about If fewer turboprop airplanes had been built during those years there obviously would not be a surplus of old airframes on the market today. So an older 1976 model King Air 200 isn t the easiest thing in the Conquest I world to sell, said Dickinson. There is a very strong market for a late-model King Air 200 anything less than 10 years old so I think the number of airplanes on the market is an aberration and it s tilted toward the older aircraft. He argued that eliminating from the equation any aircraft older than 20 or 25 years paints a different picture, especially of jets. The older straight-pipe jets who wants them? he asked. Mike O Keefe, senior vice president in charge of aircraft sales at Banyan Air Service in Fort Lauderdale, Fla., said that while the King Air 300 and 350 markets have been hot for several years, the King Air 200 market is on fire. He said that book values mean nothing and market values are far greater than the book values now. Where I ve seen some depression is the Fairchild Merlin, the [Mitsubishi] MU-2, Twin Commander and the [Piper] Cheyenne there just doesn t seem to be the demand for them that there is for Raytheon products right now, O Keefe said, adding that he has sold more aircraft to first-time aircraft owners in the past year than at any other time he could recall. I don t know what it symbolizes, he admitted. Maybe it s security. Maybe it s the poor treatment with commercial airline travel the cost, the limited schedules. I think people who have tasted fractional ownership and charter are now experiencing getting into ownership. He suggested that people who in years past typically might start out with a piston single or piston twin are now looking at spending $2 to $3 million on a used turboprop. That s kind of a quantum leap for never having done it before, he acknowledged. I think the perception is that those other aircraft are not as prevalent on the radar screen. Banyan Air is a full-service FBO, and O Keefe said one issue he always addresses is parts availability. How can there be an abundant supply of replacement parts on an aircraft that is no longer in production? he asked. That s a viable concern. As a fairly sizeable maintenance facility, Banyan has difficulty getting parts for some of the aircraft, particularly for the larger Merlin and Cheyenne product line. Others, he said, such as the MU-2 and Twin Commander, have excellent product support. But from what I ve seen, people want the Raytheon name, he added. Another possible selling point of the King Air, according to O Keefe, is the popularity of the aircraft as a charter airplane noted for its reliability. Perhaps people who have experienced that aircraft [in charter operations] are saying Perhaps I can afford to buy one myself, and so it s a known entity, he said. O Keefe added that if an older turboprop is out there and it is the nicest one in the fleet, price almost doesn t matter. If buyers have made up their minds they want one of those aircraft, they will pay the price for the nice one that is ready to go. Piedmont-Hawthorne v-p of aircraft sales Tom Mekis told AIN his Winston-Salem, N.C.-based company is sort of echoing the whole sentiment more on page 26 are a number of markets slowly recovering from market indifference. One aircraft that has not enjoyed the ride so far this year is the Cessna Citation X. Its choices have swelled from eight at the beginning of this year to 20 at the end of August, the figure where the Machnudger currently resides. That pushes it well above its 12-month average of 12 and represents 8.5 percent of the 236 in service. One of the first copies made carries an asking price in the mid-$12 million range, Citation III while a 2003 model approaches Citation Excel $17.5 million. Also ticking up is the Challenger 604, which stood at 10 units in February, its low for the year, but is now at 16. Bombardier Aerospace has thinned its used stock to just one 604 at present, perhaps offering some relief to current sellers. While in tight supply with slightly more than 5 percent of its fleet up for grabs, the 15 GIV-SP choices have nearly doubled since January. Asking prices start around $20 million and extend into the upper twenties. Earlier this year the GIV responded impressively to a tightening supply of its GIV-SP successor by cutting its choices by more than half over two quarters. It held at 32 units throughout the first quarter of this year, a peak for the model type, but had dwindled to 15 by the third quarter. It has shed three more aircraft from the net availability figure since then, representing about 5 percent of the 214 built between 1986 and Not quite as dramatic is the Challenger 601-3A, which reached 23 for sale late last year and now stands at 13, or a fraction under 10-percent availability, based on the 134 that were produced. The Falcon 900B, which had 25 for sale in the final quarter of last year, has dwindled to 15 at present out of a possible 125, equating to roughly 12-percent availability. The price erosion of many middle-aged jets may finally be coming to an end, or in some cases already have ended, as many brokers report upbeat sales activity on these 11- to 20-year-old aircraft. One example is the Citation III, which was produced from 1983 to 1991 before yielding to its successor, the Citation VI and Citation VII in Four years ago IIIs traded in a range of $5 million to $7 million, but now we are seeing deals struck in the high-$2 million to high-$4 million range and buyers are sensing value. This year started with 40 for sale, which is where availability is today. Two years ago choices grew to 50, representing 25 percent of more on next page

3 22 Learjet 35A continued from preceding page the roughly 200-strong Citation III fleet, whereas the current stock brings the percentage figure down to 19, which is still high, but with continuing price adjustments should continue to experience a further reduction in choices. Another example is the Hawker 800A. It began the year with 29 for sale, but has grown to 39 today, or 17-percent availability. The Hawker 800A production run spanned from 1984 to 1992 and the fleet grew to 225 before the popular Hawker 800XP supplanted the 800A. Speaking of the XP, its production eclipsed its predecessor s total number in 2000 and will probably double it by early next year. The fact that only 4 percent of the 431 Hawker 800XPs are currently for sale speaks to the desirability of the model. The Learjet 55 should be noted as a middle-age, medium-category jet of interest. It matched an all-time inventory peak of 33 airplanes for sale in February, (previously reached in July 2001), but has nearly halved its choices to 17 now. There were 124 Learjet 55s produced between 1981 and 1986; 117 of them are currently in service. The 17 for sale represent slightly less than 14 percent of the active fleet. The 55 s successor, the Learjet 60, which is still in production, offers about 10 percent of its 277 copies for sale now, a figure often used to define an average supply. The 24 Learjet 31As currently on offer represent an inventory low for the year. In March that number was 31, but the continuing market heat has melted away the net figure. Based on a production run that yielded 208 aircraft, the current supply represents 11.5-percent availability. There s about a $2 million spread between the highest and lowest asking prices, beginning at $2.7 million for a 1992 model and ascending to $4.7 million for a Demand for Older Jets Remains Low While the 11- to 20-year-old second-tier aircraft are starting to show signs of life, aircraft in the 20- to 30-year-old group continue to be lackluster with few exceptions. Consider the Hawker 700A: between 1977 and 1984 BAe built 181 of the sturdy midsize jets, and 177 of them are still in service. There are now 50 of them for sale, or 28 percent, which is not far below its peak of 53 reached this past July. Based on high availability figures, the Hawker 700A has Falcon 900EX Hawker 800XP NUMBER ASK ASK ASK SALES SALES SALES SALES FOR SALE LOW* HIGH* AVG* Airbus A319CJ 0 N/A N/A N/A Astra ,850,000 3,850,000 3,850, SP 6 5,395,000 5,895,000 5,645, SPX 7 7,500,000 8,450,000 7,975, Avanti P ,500,000 4,995,000 4,765, BAC N/A N/A N/A ,299,500 5,250,000 4,774, BAe N/A N/A N/A Beech 1900C 5 995,000 1,150,000 1,072, C-1 3 N/A N/A N/A D 7 2,600,000 3,500,000 3,116, Beechjet ,600,000 2,050,000 1,773, A 27 2,795,000 4,900,000 3,748, Boeing ,500,000 9,500,000 9,500, ,000 11,000,000 3,758, , , , ,950,000 16,000,000 14,975, SP 4 N/A N/A N/A BBJ 4 42,500,000 43,500,000 43,000, Bombardier Global Express 3 N/A N/A N/A Caravan I 208B ,000 1,475,000 1,111, ,900 1,495,000 1,100, Challenger ,450,000 17,100,000 15,775, ,900,000 6,750,000 5,665, A 13 6,500,000 7,950,000 7,133, A 16 8,850,000 11,300,000 9,940, R 7 13,500,000 16,000,000 14,125, SE 1 N/A N/A N/A ,750,000 15,750,000 15,750, Cheyenne 400LS 8 1,395,000 1,825,000 1,500, I , , , IA 0 N/A N/A N/A II , , , III ,000 1,075, , IIIA 9 819,000 1,395,000 1,088, IIXL 6 675,000 1,100, , Citation ,000 2,350, , ,795,000 3,200,000 2,494, Bravo 13 3,795,000 5,600,000 4,691, CJ1 11 2,800,000 4,295,000 3,459, CJ2 11 4,495,000 5,325,000 5,016, CJ3 3 5,795,000 5,795,000 5,795, Eagle II 5 3,095,000 3,400,000 3,247, Encore 4 6,000,000 6,150,000 6,075, Excel 13 7,900,000 7,950,000 7,933, I 6 595,000 1,400,000 1,096, II 112 1,050,000 2,600,000 1,730, III 36 2,995,000 4,995,000 3,777, II/SP 13 1,400,000 2,300,000 1,780, I/SP ,000 3,200,000 1,321, SII ,000 2,625,000 2,115, Sovereign 3 N/A N/A N/A V 27 2,850,000 4,300,000 3,543, V Ultra 14 4,395,000 4,395,000 4,395, VI 4 5,650,000 5,650,000 5,650, VII 8 5,650,000 7,800,000 6,483, X 19 11,995,000 13,800,000 12,698, Commander , , , A ,000 2,000, , B ,000 1,200, , B-I 0 N/A N/A N/A B-II 4 450, , , A 8 1,000,000 2,200,000 1,466, B 4 825, , , C ,000 1,029, , D 6 1,295,000 1,395,000 1,345, , , , Conquest I ,000 1,595,000 1,104, II ,000 1,725,000 1,365, Embraer Legacy 0 N/A N/A N/A Falcon ,000 1,800,000 1,399, ,495,000 2,800,000 2,647, ,395,000 4,900,000 4,057, N/A N/A N/A EX 0 N/A N/A N/A ,900,000 6,495,000 4,811, D 7 500,000 1,350, , E 3 750,000 1,700,000 1,283, F 16 1,295,000 3,000,000 1,838, S ,000 1,500, , ,500,000 12,000,000 8,593, N/A N/A N/A EX 3 15,750,000 17,500,000 16,625, N/A N/A N/A B 10 15,300,000 19,250,000 16,933, C 0 N/A N/A N/A EX 2 26,700,000 29,800,000 28,250, Fokker 50 0 N/A N/A N/A F N/A N/A N/A F N/A N/A N/A F N/A N/A N/A Gulfstream Astra/G100 1 N/A N/A N/A Galaxy/G ,000,000 18,500,000 15,329, I , , , II ,000 6,000,000 3,000, IIB 5 4,500,000 4,795,000 4,647, III 37 5,495,000 7,950,000 6,181, IV 14 15,500,000 17,900,000 16,637, IV-SP 12 20,500,000 26,000,000 22,249, V 8 29,995,000 33,900,000 31,798, Hawker 1A 5 125, , , A , , , B 2 N/A N/A N/A A/RA 2 495, , , A/RA , , , A ,200,000 1,200,000 1,200, B 2 700, , , B/RA 1 150, , , ,095,000 2,750,000 1,704, A 8 250, , , B 5 450, , , Source: Amstat, Tinton Falls, N.J.

4 24 Aviation International News December 2004 plenty of company, including the Challenger 600, the Gulfstream II and III, Citation II, Learjet 35A and the Falcon 50. Considering the prices of four to five years ago, it s hard not to think of today s pricing as anything other than a half-price sale. Back then the Challenger 600 regularly carried high-$8 million to low-$9 million asking prices. Now, with about 30- percent availability, the market price has dropped considerably, to levels not seen in 10 years. The Gulfstream II market is showing signs of life, reversing a burgeoning supply that peaked at 61 two years ago. It dropped to 46 early this quarter, a three-year low, yet that figure still represents a quarter of its active fleet of 189. The GIII fares even better than its older sibling at 17-percent availability based on 34 of its 197 currently on the used market. With the exception of this year, when there were 34 aircraft for sale during four different months, you would have to look back to mid-2001 to find as few for sale. Most of the GIII prices are spread throughout the $5 million and $6 million range, with occasional examples above and below. Citation Bravos and CJ2s, coupled with age, have affected the Citation II market, which has been lackluster since early That s the first time the Citation II inventory tripped over the century mark in available choices, and it hasn t waged an assault on that level since. Average pricing among Citation IIs is $1.7 million, with the low of $1 million and high of $2.6 million. Speaking of the century mark, the Learjet 35A has been bouncing on either side of it for the last few years. It began this year with 98, grew to 105 by mid-year and is back down to 98 at present. The average pricing in this group is about $2 million. Beechjet 400As are in 9-percent supply based on 34 of a possible 351. The Falcon 50 offers 32 aircraft to the used market at premore on page 27 Challenger 300 Gulfstream 200 Falcon 20 *Asking prices shown in the charts on pages 22 and 24 assume there is an asking price for each make and model. Often, dealers and brokers do not release this information to market-tracking organizations. Values shown, therefore, might not reflect the widest range of prices. All prices shown are in U.S. dollars. N/A=Not Available or Not Applicable NUMBER ASK ASK ASK SALES SALES SALES SALES FOR SALE LOW* HIGH* AVG* Hawker (cont d) 400XP 3 N/A N/A N/A N/A N/A N/A A , , , B 1 N/A N/A N/A A 49 1,895,000 3,200,000 2,630, B 7 2,500,000 2,900,000 2,683, A 33 3,775,000 6,750,000 5,233, B 8 4,900,000 5,450,000 5,075, XP 20 7,125,000 10,395,000 8,726, A 3 7,250,000 7,250,000 7,250, B 2 N/A N/A N/A Jet Commander , , , B 7 195, , , JetStar ,000 2,095,000 1,598, N/A N/A N/A II 16 1,695,000 4,750,000 2,823, Jetstream ,000 1,395, , ,900,000 2,900,000 2,900, King Air , , , A , , , B , , , C ,000 1,150, , C , , , C90A ,000 1,495,000 1,028, C90B ,000 2,725,000 1,781, C90SE 2 1,150,000 1,150,000 1,150, E ,000 1,050, , F ,000 1,400,000 1,021, F ,295,000 1,295,000 1,295, , , , A ,000 1,200, , B ,000 1,265, , ,000 2,300,000 1,141, C 4 975,000 1,525,000 1,283, T 2 1,450,000 1,450,000 1,450, B ,000 3,800,000 2,081, B200C 1 1,450,000 1,450,000 1,450, ,360,000 2,150,000 1,711, LW 0 N/A N/A N/A ,450,000 4,100,000 3,241, Learjet 23 2 N/A N/A N/A , , , A 1 300, , , B 6 200, , , D , , , E 5 400, , , F 3 595, , , , , , B , , , C 4 350, , , D ,000 1,200, , G 0 N/A N/A N/A ,999,999 2,950,000 2,383, A 27 2,600,000 4,500,000 3,478, ,250,000 1,300,000 1,275, A ,000 5,026,870 2,154, N/A N/A N/A A 6 1,375,000 1,745,000 1,560, N/A N/A N/A ,800,000 9,395,000 8,597, ,250,000 4,995,000 3,633, B 1 4,650,000 4,650,000 4,650, C 1 N/A N/A N/A ,800,000 9,750,000 6,937, Lockheed L N/A N/A N/A McDonnell Douglas DC-8 2 6,950,000 6,950,000 6,950, DC-9 3 3,900,000 3,950,000 3,925, Merlin 23 2 N/A N/A N/A ,085,000 1,085,000 1,085, IIB , , , III , , , IIIA , , , IIIB , , , IIIC 5 895, , , IV 3 445, , , IVA 6 595, , , IVC 7 475,000 1,100, , Mitsubishi Marquise ,000 1,000, , MU-2B 3 449, , , MU-2F 9 395, , , MU-2G 1 N/A N/A N/A MU-2J 8 350, , , MU-2K 9 325, , , MU-2L 3 450, , , MU-2M 4 500, , , MU-2N 7 295, , , MU-2P 7 379, , , Solitaire ,000 1,495,000 1,025, MU/Diamond IA ,000 2,000,000 1,306, Pilatus PC ,750,000 3,100,000 2,481, Piper Meridian 23 1,050,000 1,700,000 1,213, Raytheon Premier I 7 N/A N/A N/A Saab 340B 3 2,295,000 2,295,000 2,295, Sabreliner , , , A , , , , , , ,995,000 2,495,000 2,196, N/A N/A N/A A , , , Socata TBM 700A 15 1,400,000 1,850,000 1,576, TBM 700B 15 1,900,000 2,400,000 2,146, TBM 700C1 2 2,345,000 2,395,000 2,370, TBM 700C2 1 N/A N/A N/A Starship 2000A 0 N/A N/A N/A Westwind , , , ,300,000 1,600,000 1,461, I 17 1,150,000 2,200,000 1,664, II 17 1,550,000 2,600,000 2,039, Source: Amstat, Tinton Falls, N.J.

5 26 Aviation International News December 2004 Turboprops continued from page 21 right now that things are going very well, activity is really strong and inventory levels are fairly low. He believes that the airplanes are valued at realistic prices and reports that his company is really active, with the phones ringing constantly. We are turning over our turboprop inventory in 30 to 60 days, he said. Part of this is that we are aggressive in our buying of airplanes and aggressive in our pricing. Mekis said that Piedmont-Hawthorne is a stocking dealer, which means it buys inventory on speculation for resale. Because of competition, he said the company has to pay a little more than it did five years ago. But he said it has never lost money on selling a turbine airplane. The customer base is more in tune with what an airplane is worth, largely due to the Internet. Customers are savvy about that, Mekis said, so if they know there are 10 airplanes for sale out there at $1.5 million, they are not his company in the past 12 months. We definitely have seen prices stabilize and in many cases we ve seen prices firm up on many models, he said. Typically in a seller s market, he noted, less than 10 percent of the total fleet will be available for sale; in a buyer s market, closer to 20 percent of the total fleet will be available for sale. According to Friedman, 12 months ago there were many cases where the numbers of aircraft hovered between 15 and 18 percent a buyer s market. We re now seeing that trend reversed to a seller s market; we re seeing those levels come down to about 10 percent, he said. In our opinion, once you get below 10 percent you are in a seller s market, he explained. Friedman said King Air 200s and 350s are selling well, and Bell has done quite a bit with C90Bs this year. I think the King Air market has come back more strongly than any one of the turboprop groups, he said. The [Cessna] Conquest II market has definitely strengthened. Twelve months ago Conquest IIs were not selling unless they were priced below the $1.4 million mark. Now they now are selling in the $1.5 to $1.6 million range again. Conquest Is have King Air B200 Twin Commander MU-2 going to sell theirs to me for $1 million so I can carry it, stock it and do all that. Whereas in the past a seller might have accepted a low wholesale price, today a dealer has to offer prices in the high wholesale range or even higher. While that squeezes the margins, Mekis said, the good news is that the activity is way up and dealers can make money on volume. Intuitively, I think we are probably up at least about 25 percent in terms of volume over last year, said Mekis. In all of last year, the company sold four inventoried turboprops. In the first half of this year, that increased to six. Brokered turboprops jumped from seven in all of last year to nine in the first six months of this year. Moving toward a Seller s Market Cary Friedman, sales manager for Columbia, S.C.-headquartered Bell Aviation, said the market for pre-owned turboprops has dramatically reversed itself and improved for stabilized and are slowly increasing in value, although not necessarily as fast as the King Airs have. While there has been really good activity in the Conquest I market, Friedman said these are mostly ownerflown for business and personal use. Purchasing decisions, therefore, have more to do with discretionary income than with a strictly business/corporate-type operation that needs the aircraft as a business tool and needs the tax benefits from owning that airplane. If they have to stretch to pay another $50,000 or $75,000 for that airplane, they will, he explained. But when you are looking at an airplane that an entrepreneur or individual is going to buy and fly, if it s $1.1 million and his budget is $1 million, will he stretch to $1.05 million to buy? He won t do it every time. Friedman said that following a recent meeting with his sales staff, he was extremely excited about the market, and he predicted a great fourth quarter. And I see the beginning of the year as being very strong, he said. It s a great opportunity to buy now because the prices have turned the corner. If you jump in now you are going to ride the wave to its crest. A 27-year veteran of selling airplanes, he conceded not knowing how long the wave will be sustained. But he suggested that it might be similar to the historic seven-year cycles in the industry. NARA s Dickinson thinks the pre-owned aircraft market is buoyant, and he is bullish about it and about business in general. He is also chairman and CEO of General Aviation Services in Lake Zurich, Ill., and he reports that his company is having by far its best year in 35 years in the business. I think the NBAA Convention reaffirmed what we all felt, that the market is good, he said. But at the end of the day, it is always going to follow corporate profits. If there are no corporate profits, people are not going to buy airplanes. Jet market continued from page 24 sent, slightly more than this year s low of 28, but well below its alltime peak of 51 less than two years ago. Pricing runs from about $5.5 million for a 1980 model, but to nearly $12 million for a The successor Falcon 50EX, mentioned above for its low supply, begins at $15.75 million and jumps to $17.5 million for a 1999 model. Sellers of some delivery positions are enjoying the general market improvement, and if there s any crystal ball into the future of the aircraft sales business, position sales may be it. Sales of aircraft positions, have been relatively dormant until recently. In the last few years position holders, depending upon how large the amount of non-refundable deposit was, would either return the position to the manufacturer or sell the position for less than they agreed to pay, just to recoup a portion of a larger deposit. Those days seem to be a fading memory thanks to the enlivened market, which has seen the return of position premiums. Part of this turnaround was spurred by the bonus depreciation legislation, but now the appetite for deliveries earlier than a manufacturer can accommodate due to backlogs have some position sellers sitting pretty. The Citation CJ3 seems like a home run for Cessna, and Bombardier s Challenger 300 is equally promising. Both models have begun to command premiums above their originally contracted prices. In the case of the CJ3, premiums have breached $300,000. The more expensive Challenger 300 is bringing higher premiums, reportedly between $700,000 and $800,000. The Citation Sovereign has also been reported to be commanding premiums exceeding $500,000. As the year comes to a close, buyers have continued to affirm their preference for late-model used aircraft. A technological divide is beginning to take its toll on older aircraft. While the markets that are filled with inventory right now will eventually thin, they will likely do so via a price adjustment rather than any paradigm shift. High fuel prices continue to add insult to injury to the older, inefficient aircraft, which can only hope to seek firm footing in the market in the year to come.