The Market for Existing Airplanes

J. Mac McClellan

Monday, September 01, 2003 at 08:00 AM ET

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Key Takeaways:

Airplanes should be considered "existing" assets, akin to real estate, rather than "used" vehicles, due to their inherent durability and long life potential.
The value of existing airplanes has steadily appreciated since the mid-1970s, with many models in the 1990s exceeding their original new dollar prices.
This appreciation is primarily driven by the rapid inflation of new airplane prices and the maturity of piston and turboprop technology, which limits significant performance advancements and prevents rapid obsolescence of older models.
Like buildings, an airplane's core structure endures, and its value is maintained by replacing worn components (engines, interiors) and upgrading portable technology (avionics), rather than becoming worthless.

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I don’t like the term “used” or “preowned” applied to airplanes. Those are standards of the automotive industry, and airplanes and cars have next to nothing in common.

The best way to describe an airplane that isn’t brand new is “existing.” That’s the term typically applied to buildings. They are either new or existing. You don’t buy a used house, for example. You buy a new house or an existing house. And airplanes have almost everything in common with buildings and real estate but very little similarity to cars and other vehicles.