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VVIPs Still de rigueur

November 8, 2021

There is a certain irony that the COP26 Environment meeting being held in Glasgow, Scotland, is seeing so many VVIP aircraft parked at Glasgow Airport.

The very myriad of VVIP aircraft being used for the conference points to a sustained need for the type by not only governments but more particularly by corporations and individuals. The number being used in such a manner is of course limited and to a large extent this is why values continue to have some stability. The downside for the VVIP customer is that they may pay a significant amount for fitting out the aircraft but when it comes to a sale, a subsequent buyer may wish to make major changes which effectively negates much of the original expense and reduces the value. Some accounting firms do not even attribute any value to the interior after a few years and instead value the aircraft as an empty hull. This is not such an issue for the narrowbody VVIP aircraft except where a customer specific interior may require major rework for any buyer. Most narrowbody interiors featuring a conference facility, bedroom, entourage seating, will meet the needs of VVIP’s. For the widebodies, the cost of fitting out a VVIP can run into hundreds of millions of dollars but an average large twin VVIP will likely cost under $100 million of which only a certain proportion can be allocated to the value. In the current market, the use of the airliner VVIP transport has become an even greater necessity. This is not only in the context of limited international flights but also because of the loss of first-class seating on many services, the need for increased personal security and the effects of Covid.

Values courtesy of The Aircraft Value Analysis Company www.aircraftvalues.net; www.aircraftvalues.com.

 

Airliner Business Jet Current Market Values – November 2021
Aircraft Age ValueUS$m Trend Analysis
ACJ220 2021- 68-75 The ACJ220 effectively replaces the A318Elite and offers an alternative to the A319ACJ. The ACJ220 offers the customer the ability to select a more modern styled interior something that older ACJs may now lack. The efficiency and space of the aircraft are of course matched by the BBJMAX7.
A318 Elite 2006-08

2008-13

14-22

16-32

The market for the A318Elite is stable with 19 listed as having been produced. There are two on the market. The issue for the A318Elite and other airliner types, is the amount of time that is required to sell the aircraft. This can involve many months if not years. The A318Elite however, has proved popular because it offers capacity without being too large. The values are perhaps more vulnerable to age not least in terms of the interior styling.
A319ACJ 1998-03

2003-07

2007-11

2011-17

2020-2021neo

8-18

12-22

15-28

25-50

80-90

The A319ACJ has been very popular with over 75 produced in one form or another. There are currently at least three on the market with a 2008 vintage aircraft being offered at $39.5 million. With a range in excess of 6,000 nautical miles (assuming additional tanks are installed), the aircraft represents one of the most versatile of airliner VVIP aircraft. Some international airlines can use such aircraft for services that would normally see first class passenger use but with lower load factors, a commercial widebody is not economic. Some A319ACJs will feature a hybrid layout which sees a more classic VVIP interior with the rear featuring a relatively large number of business class seats. For those A319ACJs that feature a single business class layout, these tend to be valued as commercial jets.
A320 Prestige 2009-112011-172020-2021neo 20-3530-6090-100 A single A320 Prestige is being offered for sale. The market for the A320VIP is less notable than the A319 but there are over 20 in service. With the surplus of A320s there now exists ample opportunity for conversion not that the feedstock cost was of much relevance in the first instance. However, the number of such conversions is limited as customers at this end of the market usually prefer to opt for originally produced VVIP aircraft even if they then need to replace the interiors with something in their own style. For VVIPs converted from commercial aircraft, values are impacted by greater utilization. The number of auxiliary fuel tanks may also be more limited.
A340-500 2002-09 30-65 There are a very few A340-500 VVIPs that were produced and this makes them very customer specific in terms of interiors and therefore difficult to sell on. The original cost of the interior – perhaps $100 million or more – can only be partially reflected in any valuation. The disposal will require patience and pricing flexibility.
BBJ

 

BBJMAX7

1998-03

2003-08

2008-11

2011-17

2021-

9-14

10-21

20-26

29-46

87-102

The BBJ is a workhorse of the VVIP market with both individuals and corporations using the type. The ready availability is sometimes an issue in terms of the length of time that is required to dispose of the aircraft. The style of the interior can also ben an issue with dark browns and gold no longer seen as so desirable. A 2000 vintage BBJ is on the market for $15.5 million but there are a number of other examples also available. With the smaller BBJ the interior is likely to require less change for a new owner and therefore the type is much more liquid. Seven or nine auxiliary tanks are preferred to ensure that range is at the maximum with anything less warranting something of a discount. The BBJMAX7 is now available with a price tag nudging $100 million.
BBJ2BBJMAX8 2001-05

2005-11

2011-17

2021-

14-20

20-40

35-62

90-110

The values of the BBJ2 are considered to have slipped slightly with a 2005 vintage example on the market at $29 million with a second aircraft also listed. The number of BBJ2s built was much lower than for the BBJ and therefore there has been less ebb and flow. The larger size of the BBJ2 makes it more suited to those needing more accommodation. The aircraft can be chartered to a range of clients and it is expected that the aircraft will be in some demand as the world opens up once more. The BBJMAX8 is priced at over $105 million and this may see some operators seek to replace BBJ2 units. A 2005 BBJ2 is on the market for $29 million.
BBJ3

BBJMAX9

2009-11

2011-17

2021-

30-40

40-65

100-115

The 2009 BBJ3 is still on the market but with only a few ever delivered the limited availability is not a surprise. The replacement BBJMAX9 is priced at more than $110 million which suggests that the interior costs some $40 million when compared to the price of $45 million for a commercial B737-9. The BBJ3 is not for the faint-hearted in terms of price but capacity offers many options that can provide efficiency. To a large extent, many operators of this type of aircraft do not need the extra capacity as the additional space is mainly used for non VVIP activities such as a second bedroom. Finding a buyer can take years particularly if the interior does not appeal and requires refurbishment. There are two BBJ3s on the market.
BBJ747-8 2010-19 100-270 The market for the B747-8 VVIP is very specialist and perhaps limited to the Middle East except of course for the two Air Force Ones that were ordered. The cost of a VVIP can be in excess of $300 million with the two Air Force Ones reportedly costing in excess of $5.3 billion in total. For the “normal” VVIP owner, the interior will likely be specialist and therefore the cost is only of limited relevance when assessing the value. Production examples of both the A380 and B747-8 is impossible to secure in view of the production lines closing down but used commercial examples can be converted as the used market offers considerable opportunities. Korean has already sent one -8 to be converted. The question is one of cost versus value. The A350-1000 and even B777-9 provide some opportunities but again values will be far lower than the actual cost.
B767-200VIP 1984-02 9-38 The B767-200 is available with two being advertised. There are a surprising number in use as VVIP transports because the type offers the opportunity for long haul travel while offering all the space of a modest home. The market is not as liquid as the BBJ but the type has seen some movement between operators. The aircraft is ageing and there will be newer B767-300s and B777s that will perhaps be viewed as replacements for the smaller -200 in the coming years.
B777-300VVIP 2003-19 65-200 There are some six -300 VVIP aircraft tin service with none listed as being available. The capacity of the aircraft is substantial and is able to meet the needs of any owner although the two decks of the B747 and the A380 do offer opportunities. The cost of a B777-300ER VVIP can be expected to be in excess of $200 million depending on configuration.
Embraer Lineage1000 2009-20 11-33 The Lineage 1000 is no longer being offered for sale. There are some 31 Lineage 1000/1000E’s in service with three listed as being available. A 2010 vintage aircraft still has an asking price of $14.9 million. The Lineage offers good interior space at less than half the cost of a Gulfstream G650ER but the range is far from being comparable. The Lineage 1000E offers more range, a new IFE and cockpit options and this has inevitably impacted the pricing of the 1000.
Commentary reflects the changes in the market since the previous update of April 2021.

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