The “COVID” Factor …and its effects on the King Air Market

“The “COVID” Factor …and its effects on the King Air Market” was featured in King Air Magazine.

For the last few years, I have had the honor of being asked to write an article about the King Air market, and each February I dutifully sit down and peck the keys, but by the time my article makes it to print, something crazy happens!

Two years ago, I wrote about the stability of the King Air market and how predictable it had become. I kid you not, about the time the issue had hit our mailboxes the market had turned upside down, and the article seemed foolish at best. Things began to settle as the year progressed and the new year was to be a good one for the King Air market; 2019 was a little unpredictable, but 2020 should be anything but … right?

I have to say 2020 has been the strangest year ever! That article I wrote back in February? Who would have imagined? The effects COVID had on the market may not  be what you’d expect. It has been a rollercoaster of monumental proportions, from literally having airplanes collecting dust and fuel being stored everywhere because there was simply no place to fly, to more sales activity than I have seen in my 20-plus years in aviation. I have seen airplanes sell for cheaper and others sell for way more than I ever imagined … all within the same calendar year.

I’m terrified of presuming what the market will be like this year. I’m going to talk about what has happened in the last year, and what it is currently looking like as I write this. Trust me, there’s plenty to talk about!

A Year Like No Other

As usual, things started off slow in January, except for acquisitions that were held over from the previous year and a few prospects that were ready to get started on the process. To be honest we were expecting a lackluster market, as during most election years, buyers put off major acquisitions until after the results. But then we started seeing activity unlike any we’d seen before – many buyers in the very early stages of considering a move to turbine aircraft. The fear of potentially losing bonus depreciation exceeded all other concerns. When we reached out to dealers and brokers around the country, they were still dead, but it made sense. We represent the acquisition side, so we usually lead the industry in activity.

The King Air F90 features a shorter wing but boasts a T-tail, dual mains, better electrical system, more fuel capacity and -135/-135A engines making it a hotrod. It, as well as the model E90, has its own cult following making the market unique. (Credit: Rob Turchick of yipDog Studios)

 

As February neared its end and March loomed, I became concerned of our full schedule of clients and several more ready to move forward. We had a client looking for a C90GT, one for a B200 and one for a 350, and that was just the King Airs!  We started looking for larger office space in Nashville and considering new hires, and in a matter of a week or two … everything stopped. The nation was in lockdown and there was simply no travel occurring. The stock market dove and so did confidence, not just in buying airplanes, but in anything at all.

We were talking to owners of established companies that didn’t know if they would survive. I was very concerned that our business might be a victim of the virus, as well. The initial shock wore off by the end of March and things began to move along; many of our prospective acquisitions were placed on hold, but our King Air business weathered the storm. We had the C90GT under contract when the lockdowns began, and our buyer never considered backing out. Thankfully, aviation maintenance was considered an essential service and our prepurchase inspections transpired almost like normal. We were able to make a very good buy on a King Air 350i. The owner had already taken delivery of his replacement aircraft and with the uncertainty of the economy, he was ready to own just one airplane.

The King Air market for the next few months was steady, in fact, business in general was steady. With limited options, flyable destinations began to explode with activity. I talked to a client who flew his King Air 300 to Jackson Hole, Wyoming, and said the airport was completely full! It was quickly becoming clear that anyone who could avoid the airlines by flying private was doing so. I’m not sure if it was fear of the virus or an aversion to wearing a mask for hours, but the airlines were mostly empty and King Airs were packed.

As spring turned to summer and things began to open up, people started to travel. Charter operators who had been trying to offload aircraft for the cash influx, suddenly froze the sale of any flyable aircraft as they were being slammed with new clients. The charter business appears to be operating near full capacity ever since.

The increase in activity, not only in the King Air market, but in all of general aviation was unprecedented. We’re accustomed to the ups and downs that follow the economy and were prepared for the increase in activity due to the tax advantages for purchasing aircraft for business use, but the “COVID factor” is a new influence on private aviation that has not been seen before.
We anticipated this reaction after the terrorist attacks on 9/11, but that never really happened. This is different; it appears that a huge percentage of those with the means or ability to fly private are attempting to do so. The piston aircraft market is currently red-hot, and the jet market is almost as hot – everything that was in demand before is now in high demand.

What about King Airs?

As I said early on, I’m afraid to make any predictions, but here’s where we stand as of mid-February.

As you know, the King Air market is really a consortium of submarkets; each model and to some extent each type of each model has its own dynamics. The following is a breakdown and clarity to where we are and where we might be headed.

King Air C90 (produced 1971-1983)

Typically referred to as the “Legacy” 90 series and depending on age and upgrades, they make a huge market that could be subject of an article all its own. For these purposes, I’ll focus on the two main submarkets – the economical but decent C90 and the “upgraded” C90, which is typically a Blackhawk-converted airplane.

The standby, decent C90 for half-a-million bucks is a very rare find these days. It’s not that you simply have to spend more to get one, it’s that there aren’t many to choose from. To find a nice airplane you’ll have to wade through dozens of substandard aircraft that are languishing on Controller. As has become the norm … if you see a nice airplane that’s priced right, it’s probably already under contract.

The “upgraded” Blackhawk/Garmin C90 is getting even harder to find. It is becoming what we would refer to as a “settled market,” meaning the people who own them are happy and not looking to upgrade, so the number of these airplanes for sale is lower than I’ve ever seen it.

I expect these older airplanes to continue to decline in value. It’s virtually impossible to find financing so it’s a cash buyer’s market and the age of the airplanes is reaching the point where you can afford to own and operate a newer airplane for the same overall cost.

King Air E90 (produced 1972-1981) and F90 (produced 1979-1985)

The King Air 90 E and F models are what we refer to as submarkets, meaning they are surrounded by the larger 90 series market, but have their own distinct following (cult), making the markets unique. Most who get an E90 (technically a C90 with more fuel capability and larger engines) know King Airs and are often in the E90 cult. They seek out the nice, low-time E models, so if you’re in the market for that, good luck!

The F90 breaks into two separate markets – the sub-$800,000 “budget” option that is more airplane for the money than the C90, and the $1,000,000-plus F90 or F90-1 that is one of the most coveted King Airs in the fleet. The F90 has a shorter wing but is superior to all other 90s due to a T-tail, dual mains, better electrical system, more fuel capacity and -135/-135A engines. The F90 is the original hotrod and the nostalgia lives on. If you want the cult model, get ready to pay big bucks and spend some time waiting, there just aren’t many to choose from.

In the long run I expect the cult following to stay faithful. I think the low-time, pristine airplanes will hold their values better than anything of that vintage.

The Garmin G1000 (and its successor G1000NXi) avionics panel are desired by many in the market for a pre-owned King Air. If a King Air the buyer is interested in doesn’t already include it, they will often upgrade. (Credit: Garmin)

King Air C90A/B (produced 1984-2005)

In a similar fashion to the C90 markets, the C90A and C90B models fall into two camps – Blackhawk or standard factory -21 engines. The more prevalent separation is the A or B designation, interestingly they’re all C90As by type certificate and data plate, the “B” designation was a marketing one and was bestowed on the airplanes produced midway through 1992 until 2005.

The C90As are less likely to be upgraded and have traditionally been where good values could be found in the later model C90 offerings; today the market is tight but still offers some limited opportunities.

The C90B market is arguably the most unyielding of all King Air markets. It has two distinct submarkets – around $1,000,000 for a non-Blackhawk airplane and about $1,500,000 for a Blackhawk aircraft. As I have mentioned before this is typically a very compressed market as the values of C90GTi/GTx keep downward pressure on the C90Bs. The inventory levels for these airplanes are lower than I have ever seen them.

I expect going forward that the C90A/B dividing line will be even more prominent, but maybe not a clean break. I suspect the 1990 C90A will fare better than a 1989 C90A, but somewhere around this area will be the new dividing line between Legacy models and newer airplanes. I believe the C90As will hold their value until something changes. Based on the current market, there is simply more demand than aircraft and while these airplanes are aging, they are still newer than the C90s and there are fewer of them.

The ever-popular C90B may actually see a price increase this year (again assuming nothing changes), you can’t escape the pressures of demand versus supply. We’re already seeing a few sellers attempting to take advantage of the lack of inventory by advertising airplanes at asking prices that would have been dismissed as unreasonable just six months ago.

This market will still be compressed by the aircraft models above it, so I wouldn’t expect to see wild increases in sales prices but I don’t expect to see any bargains either.

King Air C90GT (produced 2006-2007)

The C90GT remains my favorite micromarket. With under 100 airplanes produced, it’s a small, often overlooked market and does create some buying opportunities but there are so few nice, U.S.-based C90GTs it takes real effort to find one to buy.

The market is caught in the middle with values that are often less than a comparable C90B Blackhawk model and the newer and usually lower time C90GTi perched precariously right above it. I wouldn’t expect to see much change in C90GT values, they may firm up from some historical lows but I don’t expect to see any substantial increases in value.

King Air C90GTi/x (produced 2008-2021)

The “late models” are completely detached from the rest of the market as most owner-pilots prefer Garmin avionics and trend toward the older airplanes, and most corporate owners trend toward the newer airframes. It’s ironic that C90GTi values keep a lid on C90B/GT values when most buyers won’t make the jump, but that’s literally the situation.

These late model aircraft have seen a lot of downward pressure on their values over the years. As new aircraft are sold and as companies decide to upgrade quickly, there seems to have always been a steady supply of late model, low-time airplanes hitting the market. This has historically brought prices down and created that compression we talked about.

Today, there’s essentially zero used inventory and Textron just announced that they are discontinuing production of the C90GTx.

King Air 200/B200 (produced 1974-2007/2007-2012)

The King Air 200 series has the same break in models which occurred in 1981. It’s hard to believe but when the first major upgrade was done on the 200 series Beechcraft had produced over 800 of that model! The model break between the 200 and B200 has been a major dividing line in the marketability of these almost identical aircraft for years. We are now seeing the same type of divide at both the start of the 1990 model year and the 2000 model year. The old adage is a 1989 model sounds 10 years older than a 1990 one.

The breaks have left us with four submarkets. The first group being the straight 200s – anything built mid-1981 and before. These aircraft have some advantages over their heavier siblings that came along later and are often used for charter because they have lower acquisition costs and better useful loads. It’s not uncommon to see a ‘70s vintage King Air 200 with a G1000 panel, new paint and interior, and maybe even winglets. They look good, haul the weight, cost less and the average charter client has no idea the airframe is 45 years old and has 12,000 hours!

The market for straight 200s has been bottomed out for a long time; there’s simply no room for the values to go down. I doubt they’ll go up in value, but as they age and get more time on them, the fleet will dwindle and force many of those buyers into the newer airframes. There are close to 600 model 200s still flying – that’s a lot of airframes to replace over the next few decades.

King Air 200 models that have been upgraded with Blackhawk engines, the various Raisbeck mods and other upgrades are the most popular and therefore have the most complex and volatile market. There are a lot of aircraft, a lot of buyers and many desirable upgrades. (Blackhawk Aerospace)

The next group we refer to as the “Legacy” B200s and encompasses airplanes built from 1981 to 1999, with the break I mentioned at 1989/1990. These airplanes are the ones that are most likely to be upgraded – Garmin G1000 panels, Blackhawk -52 and -61 engines and Raisbeck mods galore. This is the part of the market that is the most complex and as a result the most volatile. There are a lot of airplanes, a lot of buyers and a lot of very expensive options. The process of determining values of these aircraft is time consuming and where we see King Air buyers make the most costly mistakes. For example, if there are two near identical airplanes and one is $100,000 cheaper, you need to know why before buying either of them.

The market values of these aircraft are holding steady. I won’t say they are increasing, but I wouldn’t be surprised if they are by the time this article is published. This market is the most likely to see a substantial increase in values, especially in the 1990 and newer aircraft. If I were considering buying a B200, I would do it sooner rather than later and I would plan on it to take a lot longer than expected.

The “Late Model” B200 category are the 2000 and newer models, all the way up to 2012! I did not mistype, there is such a thing as a 2012 B200. It’s not a B200GT or a 250, it’s a legit B200 with -42 engines! Beechcraft continued to build the B200 via special order even after they introduced the B200GT and in 2011 they built all three – the B200GT, the B200 and the 250!

The B200s built from 2000 until 2007 are the most desirable and you will very often find them with all of the popular upgrades – Garmin G1000NXi panel, Blackhawk engines, BLR winglets, Raisbeck mods and new paint and interior. Some of these pristine B200s actually sell for higher prices than the newer B200GTs!

King Air B200GT/250 (produced 2008-current)

The B200GT marked the first major change in the 200 series in 34 years – the addition of the more powerful Pratt & Whitney PT6A-52 engines from the factory. This gave the production B200 the same top speed as the modified Blackhawk B200 or the production King Air 350s.

The B200GT and the 250 are very desirable because of their age, but many King Air operators became accustomed to Garmin avionics and really struggle with the idea of learning the Pro Line 21 system and maintaining it. This has caused some depression in the values of these airplanes; in fact in 2019 and the beginning of 2020 the King Air 250 market was stagnant and airplanes were not selling. We had a 250 acquisition request back then and chose to buy a 350i instead because we were afraid of what might happen to 250 values.

At the start of 2020, the King Air 250 market was stagnant, but later a model sold for a good price and it wasn’t long before all 250s up for sale were gone. (Textron Aviation)

Then, like so many other odd occurrences last year, a random King Air 250 sold, brought a good price and then one-by-one, like dominoes, they all sold. If you’re in the market for a good 250 today, they may be sold out!

It’s not just the 250s, it’s the Blackhawk C90Bs and the late model Blackhawk B200s … they’re all sold out. I’m hoping by the time you read this, things will have loosened up a little and there is some inventory for a buyer to consider, even at higher prices, but I don’t suspect there will be. I’m afraid when it comes to airplanes, the struggle of finding a nice one to buy may be our new normal.

The King Air 300 was built for 10 years under a special approval from the FAA. It is a B200 fuselage with -60A engines and a 14,000 lb. gross weight. Those who own the model absolutely love it. (Credit: Clint Goff)

King Air 300 (produced 1984-1994)

My second favorite micromarket, the King Air 300, represents a tremendous value to the savvy King Air buyer who understands what it is and isn’t afraid of getting a type rating. The 300 isn’t for everyone but for those owners who take advantage of its unique characteristics will absolutely love it and you won’t be able pry one of the rare, nice ones away from them. The 300 can do one thing that no other airplane can do, but I’ll save that for another article!

The King Air 300 was built for a 10-year period under a special approval from the Federal Aviation Administration (FAA). There was a sunset clause that ended production, with the last few years of produced aircraft going to the FAA or were 300LWs, meaning lightweight with a measly 12,500 lb. gross weight. This left a very small fleet of unique airplanes. The King Air 300 is a B200 fuselage with -60A engines and a 14,000 lb. gross weight. It does everything a Blackhawk B200 does but carries more weight and costs about $500,000 less!

This market is somewhat settled. It was hot a couple of years ago; today, we aren’t seeing as many buyers, but there aren’t many airplanes to choose from either. I expect that the King Air 300s will maintain their values and end up with the same cult following now as the King Air E and F 90s. If you’re in the market for a King Air 300 and you can find one, you better not pass it up as there may not be another one!

The King Air 350/350i

I can’t lump these models with all the models above. For whatever reason, the King Air 350 market is different right now. In fact, it may be the only sub-$5,000,000 aircraft market that isn’t red-hot. I strongly suspect that by the time this article is published, things will have changed and all of the nice King Air 350/350is will be gone as well, so please don’t send me hate mail if none of what I’m about to say makes any sense.

King Air 350 (produced 1990-2009)

There are a few breaks in this market as well but overall it is typically more cohesive. There aren’t nearly as many upgrades available for the King Air 350 and the values are easier to understand.

The first break is at the typical 1999/2000 mark, with the older airplanes being considered “Legacy” and the newer ones “Late Models.” The second break is at 2003/2004 with the 2004 model being Pro Line 21, which makes the 2000-2003 models very popular because people want the latest 350 they can buy and upgrade to a Garmin G1000. With these aircraft becoming harder to find, we are seeing owners elect to remove the Pro Line 21 and replace it with the G1000. I know many think this is a sin, but please do not shoot the messenger!

The third break is at Serial No. 500, when the AC system was upgraded to a Keith unit which is more desirable.

King Air 350i (produced 2009-current)

The King Air 350i market took a serious hit in 2020. It started with several 2013 models that were originally sold with seven-year warranties under a special promotion coming off warranty being traded back into Beechcraft and then progressed quickly downhill during the early stages of COVID.

We saw 350i values drop hundreds of thousands of dollars in a very short period of time; 2012/2013 models were being advertised on Controller for lower prices, some even falling below the $3,000,000 mark. Those deals are gone and you can’t buy one that cheap today, but there aren’t a lot of buyers either. I have probably fielded 20 calls from prospective King Air buyers in the last 45 days and only one of them was looking for a 350.

Overall, the King Air 350/350i market is very slow. I expect it to rebound sometime early this summer but that’s just a guess.

In Conclusion

To say that 2020 was an unusual year would be an understatement, but so far 2021 is just as interesting. What will the market be next week or next month, who knows? What is it right now? Tight. Tighter than I’ve ever seen it. Is it a bubble or the new norm? I’m not sure. It feels like a bubble … like 2008 when inventory dropped and prices rose. This is different though. The economy isn’t driving this market, a virus is. It’s not just the chance of getting sick … it’s the mask, no cocktails, being treated poorly by airline employees. It’s fewer flights, less flexibility, less service and more excuses.

Those who can … will. That seems to be the mantra for the day. It’s great for general aviation, it’s great for King Airs. It’s great for all of us who make a living helping make dreams of flying a reality.

If you’re thinking about buying a King Air, don’t hesitate and plan for it to take a while to find a nice one. If you’re thinking about selling, hurry up. We have a bunch of people that want your airplane more than you do!

 

Background: Chip McClure has been in the aviation industry for over 20 years. He and his wife Amy founded Jet Acquisitions in 2015; the firm exclusively represents turbine aircraft buyers and specializes in King Airs, as well as all models of current production turboprops and jets.

“The “COVID” Factor …and its effects on the King Air Market” was featured in King Air Magazine.

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