Buy it Right

According to many in the charter management racket, now is the time to buy.  Buying low makes the pain of selling MUCH lower less likely, or at least… less painful.  Buy it right, because you’ll never sell it right.  Legacy hardware that is no longer efficient (especially on a DOC vs. speed basis) is being put out to pasture in a big way.

We live in times of too many airplanes and not enough charter customers or even corporate users.  The world is also squarely in the land of more logical point to point pricing.  Also, with Netjets on the cusp of dumping a slug of aging stuff, watch for some depreciation to accelerate on select models.

In a recent chat with Don Bishop of Aeroshares, he highlighted the new ecosystem of air charter.  “If you have the FBO mentality about managing the aircraft from a home base, and you aren’t willing to keep it out on the road you’re toast.”

Aircraft to focus on have a higher percentage of the fleet for sale than others, have a thick herd and have impressive DOCs.  Older Lear 60s and 45s are now leading the pack for smart buys and operators.  Unexplicably Bombardier did a reverse market blunder and launched the 40 after the 45.  It turns out that having short legs and a smaller fuselage makes zero sense.  Hopefully Pierre Beaudoin isn’t afraid to discipline the poor soul who dreamt up that scheme.

The Astra SPX and related Gulstream 100s and 150s aren’t bad either.  Great cost per NM, great legs and performance.  For the Scottish amongst us, stick with at least 5 years of age, if not older.  Unless ofcourse you like big payments and tying up a a lot of capital.

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