The actual value of an aircraft lies in its airframe's structure, engine, damage history, and maintenance.
Although most first-time buyers shy away from damage history, veteran owners don't seem to mind as much if the repair was done properly, is well documented, and the price is adjusted accordingly..
A Market-Based Valuation for Your Aviation and Aerospace Company.
A market-based valuation uses your seller's discretionary earnings (SDE) and/or your earnings before interest, taxes, depreciation, and amortization (EBITDA) along with industry multiples (rule of thumbs) to formulate a tentative fair market value (FMV)..
It is calculated by multiplying the company's share price by its total number of shares outstanding.
For example, as of January 3, 2018, Microsoft Inc. traded at $86.35.
2) With a total number of shares outstanding of 7.715 billion, the company could then be valued at $86.35 x 7.715 billion = $666.19 billion..
There are two main methods of valuing aircraft leases: the discounted cash flow (DCF) method and the market comparison method..
A valuation is typically performed when a company acquires another company targeted for acquisition, reorganizes its capital structure, splits up, or files for bankruptcy while in liquidation or reorganization..
Enterprise value-to earnings before interest, taxes, depreciation, amortization, and rent (EV/EBITDAR) is the most common valuation multiple used to value airlines.
Analyses also use free cash flow (FCF) yield to analyze airlines..
VREF Verified Reports provide buyers and sellers of aircrafts with a comprehensive report that features critical information on the value of a specific aircraft by equipment and serial number..
Valuation is the process of determining the fair market value of an asset.
In the commercial aircraft industry, valuation can be defined as the determination of the fair transaction value of an airplane..
In 2023, the global market size of the industry was estimated at just under 841.5 billion U.S. dollars, a seven percent increase in value from the year before.
Amid the coronavirus pandemic, the airline industry was one of the most affected businesses worldwide..
Enterprise value-to earnings before interest, taxes, depreciation, amortization, and rent (EV/EBITDAR) is the most common valuation multiple used to value airlines.
Analyses also use free cash flow (FCF) yield to analyze airlines..
An appraisal lets a seller know their aircraft's condition as well as its current fair market value so they can go into the sales process with confidence.
An appraisal also documents the condition and value of an aircraft and supports a bank's collateral position in an aircraft loan..
Through primary research, it was established that the Airline Industry market was valued at around USD 513.5 billion in 2022.
The Airline Industry market is segmented based on Commercial Airlines: passenger aircraft and freight aircraft..
EBITDAR Margin – Airlines look at EBITDAR because the decision to lease vs to buy should not be a consideration in analyzing how the airline is operated.
EBITDAR is accordingly the appropriate figure to look at vs revenue for operating margin..
An on-site inspection of the aircraft and its records by a qualified appraiser can reveal a much different value
Additionally, the aircraft resale market is a dynamic environment, and prices can change from month to month
There are many intangibles that should be considered
However, the true value of an aircraft can only be ascertained on a case-by-case basis resulting from a mutual agreement among the buyer, seller, and lender
VREF optionally provides additional services that allow pilots to receive a more accurate appraisal and VREF Verified values
The AOPA Aircraft Valuation Service can be used as a good starting point when attempting to determine the general retail value of an airplane
However, the true value of an aircraft can only be ascertained on a case-by-case basis resulting from a mutual agreement among the buyer, seller, and lender
The global aviation value chain is made up of a diverse set of sectors that differ in size, structure, and financial performance
Some sectors generate significant profits while others may struggle to maintain profitability
They also differ in the value they create from an investor’s perspective
