It’s been almost a year since I originally wrote this piece on used plane hyperinflation, and things have only gotten worse, which, as you read on, you will see has not surprised me in the least. While it’s tempting to lump together skyrocketing used plane prices with generalized global inflation, including here in the United States, it’s not an instructive exercise. Light aviation is a one-of-a-kind niche, and the drivers of the spike in used plane values has everything to do with the history of personal flying and not nothing but almost nothing to do with our current economic conditions.
When you look at the state of the world, the nation and the industry, it’s clear that we’re in uncharted territory. The pandemic and all the disruption that it has wrought, the blistering economic growth that high tech keeps fueling and the changes in the weather are all things we’ve never seen in our lifetimes. They’ve never happened period. When you couple all of these changes and look at the huge price increases in homes and vehicles of all kinds, including airplanes, it’s very likely that the future of used and new airplanes is something we’ve also never seen before. Is that bad or good? I guess it depends on your perspective. I embrace new tech, but I would hate it if old Chevy pickups and Martin guitars went away (neither of which is likely, thank goodness).
I know it’s human nature to try to apply old ways of doing things to new circumstances, but it’s not the smart approach. That’s not to say that I don’t do this. We all do, and usually everything works out okay, at least in the short term.
The smart approach, and it sounds so easy when you say it, is to look at the current conditions, think carefully about what they mean and make plans based on that. Now, you’d think that the first part, taking stock of what’s happening right now, would be the easiest part. It’s not. That’s because humans are talented at twisting evidence around until it fits their beliefs, seeking out only evidence that confirms this and ignoring details that go against the desired world view.
This behavior is called confirmation bias, and because all people do it, and CFIs (most of them) are people, they do it too. Often, for example, an instructor will have a pet theory about why a student pilot’s landings are subpar. Let’s say in their mind, it’s all about where you look as you’re landing. Regardless of why the student pilot is underperforming (see how nice I can be), in the instructor’s mind, it’s always because they’re not looking where they should be looking. Is there something to the theory? Of course! But there’s so much more to landing an airplane than just the view—take airspeed control, for instance. The better approach would be for the teacher to watch carefully, note the behavior and then make suggestions to improve the student’s landings, drawing from a menu of options. Good instructors do this without even knowing they’re doing it.
When it comes to seeing the world we live in, we all do the same thing. How are things going? Ask two people and you’ll mostly likely get two different opinions on the subject. But in this case, I think we can mostly agree on a few things here to hone our discussion of what the future holds. One, the economy is nutso. The stock market is through the roof, home prices are insane, as are the dollar figures that used cars are fetching. Used planes, too, but you already know that. The pandemic is real, the lives it has cost are real. And the changes we have seen in how we live in the world are real as well, no matter if you agree with them or not.
The other big change is the growth of technology. In 1930, radio was everywhere. But people couldn’t imagine television. It seemed like magic. But it happened even though few people thought it would. And right now, we are likely in the exact same place only on mega steroids. Those things we can’t currently imagine could ever come true are things like new-materials batteries that have far greater capacity and are way faster to charge. Another thing: nuclear fusion. The promise of limitless, clean and safe energy production would absolutely change everything. Will either or both of things happen? I don’t know. But if I was a betting woman (wait, I am!) I’d bet that they will. After, all TV happened, and shortly afterward, it seemed so obvious and inevitable that it would.
On a more pedestrian subject (figuratively speaking), take the subject of airplanes. Here’s what we know. They aren’t making new airplanes very fast, and the ones they do make are pretty expensive. For the good news, please refer back to the state of the stock market. People have money, and if airplanes seem to make sense to them, they’ll buy an airplane. That doesn’t mean that the average person will be dropping half a million dollars to a cool million on a small plane. But it does mean that slightly-less-average people will. I’ve been waiting for years for Cirrus Aircraft’s customer pool to dwindle. It hasn’t. Quite the opposite, it seems.
The continued success of a few makers of high-end small planes is almost immaterial. I’m beyond excited that these aircraft exist and that pilots are flying them, and by all accounts, flying them a lot. But the broad market that is aviation has never depended on pilots buying Bonanzas and Centurions and TBMs. It’s depended on people of more modest means buying used airplanes that are a great deal.
That great deal part is no longer the case. Are there deals to be found? Well, kind of. But it’s relative at this point. The days of a cherry $25,000 Skyhawk are long gone, so unless a prospective buyer can triple or quadruple that figure, they’ve got to explore other options. And once they find that more expensive airplane, if they want to fly it, they need to keep those fuel tanks topped, and this is for a machine that gets poor fuel economy (in general) and uses fuel that’s, number one, way more expensive than auto fuel, which ain’t no bargain these days, and number two, is on the EPA’s hit list.
What we need is a class of aircraft that are way better on fuel and that can run on auto fuel (or diesel, and I don’t mean Jet A) or something even better, like electrical power, though that technology is not yet close to ready for prime time.
And we need planes that are safer too, and that is happening. Garmin just flew the Collier Trophy back home to Kansas. The award, for its Autoland safety utility, is a great start, and it will only get better. But having one engine is a problem—it always has been. More reliable, redundant propulsion will happen. Along with cheaper, cleaner and widely available fuels, too. And they need to be more affordable, as well.
The hyperinflation tide that’s sweeping through used light planes right now is real and it’s not going away. That’s Econ 101. So, unless the market were to go away entirely, and nobody wants that to happen, then something will fill the vacuum. And if history is any guide, and it sometimes is, they’ll be better aircraft too—note, I did not say “planes.”
Will all of these things happen in a world that until recently felt pretty much the same as it had for the past 70 years (if we ignore computers, that is)? Yes, they can happen. There’s a collective will to do all of these things, and while it might take a little time, the future is already being drawn up. We just have to look at what’s happening before our eyes. While the zigzag path to the future is far from certain, we know what the destination is. And I believe we’ll get there, with plenty of room left for old pickups, spruce-topped guitars and Super Cubs.
