How come Aircraft Trade and Leasing Organization sells & leases slightly used planes at a price higher than a brand new one? (e.g. Airbus 320neo)
How come Aircraft Trade and Leasing Organization sells & leases slightly used planes at a price higher than a brand new one? (e.g. Airbus 320neo)
That's how the game is set up.
When aircraft go to the used market (by the system's ATaLO), they are initially offered slightly above book value.
That's how the game is set up.
When aircraft go to the used market (by the system's ATaLO), they are initially offered slightly above book value.
But how does it make sense for the system to be set up in such a way?
Wouldn't it then be better to just buy/lease a brand new plane?
But how does it make sense for the system to be set up in such a way?
Wouldn’t it then be better to just buy/lease a brand new plane?
Of course, unless you urgently need one.
It's supply and demand. If the aircraft remains on the market a long time the price will drop. If you need an aircraft in an hour rather than a day then theres the demand
The aircraft price will be 5% higher than its true price relevant to its age, it will stay at that level for 2 days after it hits availability in used market, and will decrease every 2 days. So after two days in the market it will cost the same as a new one. So you can wait 2 days or order a new one. Then, it will gradually start decreasing price, every 2 days, until it hits the minimum, then being at minimum for 2 days it resets back to 105% of its true market value price relevant to its age, and the cycle repeats itself until someone leases that plane.
If you wait till it hits the minimum, you can really strike a bargain, which in long term of a year or two adds up. But then, someone else may be more impatient and bid on it before you do, if you wait too long. It all depends on how popular the aircraft is and what the supply of that aircraft type is on used market. If you see many available aircraft of its type, you can more likely wait for it to drop to the lowest point to strike a lease bargain without somebody else bidding on it, but if you see just a few being listed, that means aircraft of that type is in high demand on used market, and then you have to make a decision at what point to bid on it.
Is there a way to calculate the minimum price after which it will go back up to 105%?
Is there a way to calculate the minimum price after which it will go back up to 105%?
Yes there is ... observe an unpopular aircraft type every day and write down the amounts / values ...
Yes there is ... observe an unpopular aircraft type every day and write down the amounts / values ...
What is the formula to calculate true market value price relevant to its age of an aircraft (at 100%)? Without it I can't tell if the particular a/c price is going down or up in the next 2 days.
A new factory fresh aircraft depreciates in 24 years. The value is based on real life accounting principle, where "current value = purchase value - accumulated depreciation" .What is the formula to calculate true market value price relevant to its age of an aircraft (at 100%)? Without it I can't tell if the particular a/c price is going down or up in the next 2 days.
Tour best bet is to work with and observe newer aircraft, such as under 5 years which are still in production. That’s because at many server starts the used aircraft were inserted into market at values that may or may not resemble true market value.