Q: What is driving the skyrocketing prices in used aircraft? I have been hearing for years that general aviation is seeing a rapid decline. If that’s the case, what’s powering the demand side of the curve in the used airplane market? Or, is the demand flat, and it’s the supply of older single-engine piston aircraft that’s shrinking?
A: Supply and demand drives all things economic—including aircraft prices. During the last recession, the demand for pilots and aircraft waned—many airlines were not hiring, so flight schools were not doing as much business. Some sold off parts of their fleet because they were not being used. It was fairly easy to pick up a used aircraft at a relatively affordable price. In addition, some aircraft owners sold their airplanes because the cost of maintenance and flying itself became too expensive thanks to the downturn in the economy.
Fast forward a few years and the so-called pilot shortage is on. Flight schools, and therefore general aviation operations, are booming, so the schools have started buying up used aircraft to augment their fleets. At the same time, renter pilots, tired of being bumped from the schedule for an instructional flight, have also put a dent in the used aircraft market when they acquire aircraft of their own. The supply dwindles and the price of used airplanes goes up.
