Refurbed Aircraft Value: Challenge For Appraisers
As the market for refurbished and reconditioned aircraft gains momentum, both appraisers and banks face the daunting challenge of determining higher values for older airplanes brought to near-new standards by remanufacturing.
"This is a fairly new thing and we're just now going about how to value an airplane that is totally reconditioned. The problem we have as appraisers is that … the way we gather our data is based on past events. And when these [refurbed] airplanes are sold, there are no past events. This is a problem that the banks have, too. There's no data to use. How much will it sell for? What is the key?" says Brian Jacobson of the National Aircraft Appraisers Association.
In an interview at AirVenture this week, Jacobson told AVweb that what's needed is a recognized standard by which a reconditioned airplane can be judged. "Anybody can take an airplane and go put an engine in it, put a new fancy paint job on it and a nice interior and call it a reconditioned airplane. We see it done all the time. And for a long time, they don't sell, because they're overpriced," Jacobson said.
"Our job is not to come up with a value, our job is to come up with a method for coming up with realistic values for that type of airplane," Jacobson added. In the past, Aircraft Bluebook Price Digest has established specific categories for modified production aircraft, which has given apprarisers key points to determine value.
"Something is needed. There has to be a methodology. That's the only way it can be done. We deal in fact, we don't deal in what I think," Jacobson said. AVweb reported earlier this week that a new company called Triple R Affordable Aircraft is proposing to be a standard-setting and auditing organization to provide just such a service. Jacobson said he thinks both appraisers and banks can be brought on board to accept appropriate values if buyers, sellers and lenders understand what went into an aircraft refurb.