Ascend by Cirium sees lower annual depreciation rates for business aircraft in 2018
Ascend by Cirium, the aviation appraiser and consultancy company, says that it is seeing a recovery in annual depreciation rates for business aircraft in 2018.
By analyzing the data that it holds on business aircraft values, Ascend has detected an increase in market values across many aircraft types last year, resulting in lower depreciation rates for aircraft.
The market value of an aircraft is based upon previous sales of similar aircraft types and assumes that the aircraft sales market is trading under balanced conditions.
Ascend defines a balanced market as one in which between 5 – 10% of the aircraft fleet is available for sale as well as considering the average time that it takes to complete a transaction and storage rates of the aircraft types.
The firm says that between 7 – 8% of the global fleet is currently available for sale. However, the percentage of aircraft that are for sale and that are less than 5 years old has fallen to below 5%.
Overall, Ascend says that the business jet market has yet to recover fully, but it has begun to stabilize.
Using constant age historical values analysis for a 10-year old heavy business jet, Ascend can demonstrate that values today are roughly half of what they were in 2007.
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