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.
The cost of new aircraft is also a factor. You could buy a two-bedroom house in a medium-sized city for what you’re paying for a new four-place airplane. It’s no wonder pilots gravitate toward the used, ergo “less expensive” option.
As far as GA being on the decline, that depends how you frame the question—is general aviation on the decline at some airports? Possibly, because the airport sponsor sees it more lucrative to cater to larger and more fuel- and space-hungry turboprops and jets and the FBOs that serve them. With an increase in rent, a smaller FBO or flight school can be priced off the field. Or, in some cases, pilots and flight schools hang up their wings because the cost of insurance has put them out of the air.
But, it depends on who you ask.
