Ownership 1.qxp_Finance 17/05/2022 14:47 Page 1
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How Does Maintenance Status Impact Jet Value? When considering the value of a private aircraft, how does its maintenance status factor? David Wyndham provides a basic overview… hen evaluating pre-owned jets for sale, there are several factors that determine price, the first being demand. Popular aircraft in high demand will command higher selling prices than less popular models. Aircraft age is another factor: assuming all other things are equal, an increase in age corresponds with a decline in value. It’s much the same for total hours on the engines and airframe. As the hours increase, the price tends to decrease. Where maintenance status is concerned, however, it all depends… Why is this? – and how does an aircraft’s maintenance status impact its value?
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Understand the Systems
Firstly, it is important to understand that an aircraft is a system of systems. At a high level there’s the airframe and engine systems. Then there is the avionics system. Making everything come together are further systems, such as fuel, hydraulics, electrical, environmental, and more. For example, the airframe cannot be operated without the flight control systems, which rely on 36 Vol 26 Issue 6 2022 AVBUYER MAGAZINE
hydraulics and electrics. All of these are interrelated and require maintenance at some point.
The Cyclical Nature of Maintenance
The second major point is to understand the cyclical nature of maintenance. When we look at operating costs of an aircraft, we tend to look at the variable hourly cost per flight hour, and the fixed costs per month/year. For example, fuel is consumed in a mostly linear fashion. At cruise, the engines burn fuel at a steady rate, whereas for take-off and climb the fuel burn will be higher. By taking the average fuel consumed on a typical flight and dividing it by the time taken for the flight, you will determine the average fuel burn per hour. Multiply that value by the cost of fuel per gallon and you can calculate the fuel cost per flight hour. Meanwhile, the full-time flight crew gets paid a salary in equal installments over the year, and regular payments are also made for insurance and hangar fees. Maintenance is also frequently shown as a cost per flight hour. Unlike fuel, however, the cost is not always www.AVBUYER.com
