Making sense of the past, present and future


As we leave 2008 behind many of us are trying to make sense of the endless media coverage of the economic downturn we find ourselves in. I don’t think the media has had this much fodder since the weapons of mass destruction in Iraq scam. You can’t turn on a radio or television without hearing economic doom and gloom stories and debates.

I happen to be much more optimistic. I believe the more we put our lives on hold while we try to figure out which government, president or prime minister is to blame for getting us into this, the longer it will be before we make the necessary adjustments and get on with our lives.

I usually enjoy listening to talk shows while I drive but lately I’ve been turning on the tunes.

Rather than September being the beginning of an economic slowdown I believe it is closer to the bottom of a slowdown. The media would have us believe the world fell apart in September and we’ve been plunged into a long recession. This may be close to the truth on Wall Street but let’s look at what has been happening in general aviation.

The General Aviation Manufacturers Association in the U.S. puts out quarterly shipment reports from their members. I had a look at the number of certified, piston, single engine aircraft shipped by these companies over the last five years. Between 2004 and 2006 annual shipments increased by 33 per cent from 1,664 to 2,208.

This was the peak from which the numbers fell in 2007 and 2008 by 11 per cent ending 2008 with approximately 1,800 shipments. I say approximately because the fourth quarter results for 2008 aren’t published yet but it is relatively easy to estimate.

So shipments of single engine certified aircraft produced in the U.S. have been declining significantly for the past two years after a meteoric rise. My guess is shipments will continue to decline for the next few quarters but will bottom out before the end of 2009 when they will have reached the 2004 levels. provides a resale price trend analysis on a representative set of aircraft covering the last 10 years. The trends are based on quarterly average resale prices published by the National Aircraft Appraisers Association.

There is remarkable consistency showing that the resale prices on most of the dozen single piston engine models tracked peaked around 2005 and have been declining since. Depending on the model the decline has been anywhere from 10 to 50 per cent with the largest drops occurring in 2008.

None of this is surprising to me. The number of new aircraft entering the marketplace in the last five or six years has been extraordinary. All the certified manufacturers have been turning out new models or upgraded models with the latest bells and whistles at a remarkable rate. I wouldn’t be surprised if the high-end single engine marketplace is saturated. And every time a new one sells a used aircraft is released to the resale marketplace.

It is interesting to note, in the same time period the price of crude oil increased from $45 per barrel in January 2004 to a peak of $145 in July 2008, and is now back down to $45. This is what has been keeping many of us on the ground more than anything in the last couple of years. I’m expecting fuel prices to remain fairly stable for the rest of 2009.

If you carry hull insurance on your aircraft your rates should decrease or at least remain stable this year and if you devalue your aircraft to match the market conditions you’ll definitely save on your premium. I did. This will help make up for the cost of the new 406 ELT you’ll have to buy!

At the risk of sounding like our Prime Minister, there will be good opportunities in 2009 to buy an aircraft or trade up. It’s not a good time to sell your aircraft and get out of aircraft ownership. Your investment is sure to increase in value again before long.

It should also be a good year for putting on the hours with the price of fuel back down. Of course, there may be other economic pressures that keep you from spending your cash on flying and if that’s the case I hope you at least can keep reading about flying in COPA Flight until the economy starts back up hill again later this year.

Meanwhile, stay optimistic and keep your prop spinning.