It’s funny. Perception always proves to be reality.

It’s not funny and not always.

If you can’t live with your conscience forward that free money on to me.

I’ll see if I can tough it out,

[/quote]

That's a depressing graph looking at the trend.[/quote]

You can blame the negative trend in consumption on running LOP

There are 100,000 plus more pilots in 2020 than there were in 2016. And the trend is steadily upward.



https://www.statista.com/statistics/537 ... ed-states/

To Chip "critically low" means he's having a much harder time that usual finding airplanes for clients and his clients are paying more. Says nothing about long term trends.

[quote="Mike Shepherd"]There are 100,000 plus more pilots in 2020 than there were in 2016. And the trend is steadily upward.

This is consistent with the increased demand for pilots over the few years prior to COVID due to airline retirements and expansions, and MAYBE some more GA pilots (but I doubt it). More airline pilots doesn't mean anything for GA aircraft values.

Airplane values aren't immune to macro economic forces. They plummeted after 2008 for example. My guess is if you correlate prices to economic indices you'll see a pattern. This is also what is impacting prices right now. Economic forces creating disposable cash (PPP is one factor as John points out - but it's not the only one as savings have generally increased over the last 18 months and interest rates remain low while banks are getting paid off on a lot of their loans and more anxious than ever to lend). Supply is still related to demand and demand has clearly increased as some a) have more disposable income b) others have increased leisure time c) some have decided, for now at least, not to fly the airlines.

None of this is a predictor of future prices. But the same economic forces are and for evidence you only need to look back over time.

Anyone who buys an airplane as an investment is a fool as John quite rightly points out.

On the other hand Dave Siciliano made the point many years ago that an aircraft is essentially a wasting asset and once fully depreciated the capital use is essentially cost less. In other words it doesn't really matter what you paid for it if you've gotten the expected utility from it over time. Any relative increase or decrease in the cost has to be balanced against that. If it's a toy then you just need to understand your pleasure isn't free and decide if the likely market depreciation on your toy, probably higher than in prior periods, is worth it. If it is why do you care about whether values will remain high or not?

Jerry is an astute observer of GA as well he should be. Ignoring his consistent point about the future of aircraft values based on a strong trend in GA pilot aging and numbers shrinkage is not wise to say the least.

There is a cycle to everything economically and there will continue to be with airplane prices. Business aircraft pricing is linear up and down but I suspect GA prices are on a downward spiral which is partially masked at the moment.

At the end who cares? If you can justify the risk as a business proposition and have a need great. If you just want to fly for fun - carpe diem (as Justin Wilson said "the reason a coon ass spends money just before he gets it is he's never seen an armored car in a funeral procession")/

Most of those “NEW’” pilots in that time period are FOREIGN students who returned to their home countries after they received a US license.

The rest went to US airlines and very few became active GA PILOTS.

This FAA table shows about a 6,000 increase in ATP pilots from 2016 to 2020.

EDIT: But leaving out student pilots it shows only a small increase in pilots over that period. About 90% of the increase in total pilots from 2016 to 2020 was student pilots.



https://www.faa.gov/data_research/aviat ... stats.xlsx

The other reason the airplane market is hot is the same reason the real estate market is hot, collector car market is hot, "non fungible tokens" sell for millions, etc. The stock market doubled in a few short years, the fed printed trillions and is handing it out for free, and many companies saw little to no negative impacts from covid so their income statements swelled with their balance sheet. Cheap money caused folks to feel flush from the top on down... company owners started buying planes to get to their new Tahoe house which they can suddenly use all the time because they don't have to be in the downtown office every day.

I think it's starting to turn though, and when it does it's going to be like musical chairs... the newbies will suddenly realize how hard it is to sell an airplane in a down market, and prices will crash back down to reality. It will start with more inventory at high prices as owners stubbornly hang on to what it used to fetch, letting the plane deteriorate and become worth even less while slowly bleeding them with expenses if they even manage to keep up with maintenance, which many people won't. This is going to happen because it always does, we're just on the high curve in the cycle... I'd argue the tippy top... so hang on to your beer.

Most of those “NEW’” pilots in that time period are FOREIGN students who returned to their home countries after they received a US license.

The rest went to US airlines and very few became active GA PILOTS.

Hi Mike,

A couple of interesting tidbits to the data.,,

Understand that pilots who are on a career track will "pass through" multiple ratings in a year.

The "ATP rule" kicked in over 2013/2014, which required both pilots to have ATP certificates for part 121. While it's fair to say a lot of FOs had ATPs, not everyone did, and that would account for the jump. OTOH, the rule probably significantly reduced the number of "sport ATPs" that were issued (folks who went out to get it just for laughs).

Note that the number of private only pilots has significantly decreased, as did the number of "only" commercial tickets, but my guess is that the ATP rule would account for at least some of that reduction.

The number of CFIs increased, but again, I would suspect this is driven by the need for career minded pilots to reach the ATP mins.

Best,
Rich

Hi Mike,

A couple of interesting tidbits to the data.,,

Understand that pilots who are on a career track will "pass through" multiple ratings in a year.

The "ATP rule" kicked in over 2013/2014, which required both pilots to have ATP certificates for part 121. While it's fair to say a lot of FOs had ATPs, not everyone did, and that would account for the jump. OTOH, the rule probably significantly reduced the number of "sport ATPs" that were issued (folks who went out to get it just for laughs).

Note that the number of private only pilots has significantly decreased, as did the number of "only" commercial tickets, but my guess is that the ATP rule would account for at least some of that reduction.

The number of CFIs increased, but again, I would suspect this is driven by the need for career minded pilots to reach the ATP mins.

Best,
Rich

Background: 110-member, 6 airplane flying club.

We gave up on finding another 172 because of exactly what is discussed here, and bought a Lark from a BTer to flesh out our high wing fleet. I'd love airplane #7 and really need one, but when a $75K 172 on Beechtalk sells in less than 12 hours, and a friend's Cherokee sells 2 hours after two dozen offers sight unseen, that's a tough market to compete in, cash ready or not. And this is low end stuff compared to Chip's market. I won't even mention the Twin Cities hangar situation.

As business owner I field all inquiries into membership. We are full and have a 30-person wait list (earliest one on it dates to March 2021). I am currently turning away 3-5 a week because we have no hope of ever bringing them aboard. These are all people who want to fly for flying's sake, as we do not cater to career movers. The number of young students (20 and under) is at our all time high. All our sister clubs (there are a lot of them up here) are in the same boat. And the flight schools are crawling with new starts.

So, I'm not buying arguments that all the movement is from US or foreign nationals gunning for aviation careers, as important as those pilots are and always have been. There's a broad base buried in this. I also don't buy PPP as a driving force to all of it as none of our new starts took PPP and said, "OK, let's go fly!" And why Minnesota would be unique in all this escapes me. Right or wrong, pending crash or no, I see these data points as pretty optimistic.

I appreciate that I'm in a different part of the market, but from what I can tell you guys who are saying GA is dying are just beating a very old drum. GA is booming. Period.

I have a very real data point, my stress relief is flying helicopters. I LOVE it. I know, weird that a guy who makes a living buying fixed wing only cares about flying if the wind spins in a circle... but I'm weird. You guys know that.

I cannot get an instructor in Nashville. I've tried. I found a lady and hour and a half away who has an R22... tell me again no one wants to be a pilot.

Some on here have given me a hard time for "marketing" but it's not marketing, it's passion and I can prove it. We're at our max, I can't take on anymore clients, I'm not here trying to get business I am here because I have a passion for this industry and what is going on right now is fascinating.

I have accurately predicted everything that was going to happen, you can read my articles in different publications to see that what I am saying is true.

I'm making another bold prediction, this market and lack of inventory isn't changing, not now. Not next year. It is... and I HATE this phrase... the "new normal"

Ok, I'll bite

Chip - you said before and I liked the concept - that the best deal was one problem aircraft. Engines needed overhaul but paint/panel was fine, etc.

Is the new normal making it viable to take 2,3....16 problem aircraft and fix them. Does it make sense to buy an airframe without corrosion and take it down to the studs?