They fly through the air with the greatest of ease. That is the first way that airplanes defy gravity, and no one can argue with that.

The other more arguable ways are in the valuation of airplanes. There is of course the demand/supply calculation. In most commodities, prices can go up when demand outpaces supply. That is such an interesting and factual measure of change in value for most market-driven items.

Not so with business airplanes, though. Perhaps it is the fact these airplanes are pieces of equipment that get older every day and get closer to the next inspection interval with every hour, cycle, and calendar day that passes.

Unlike classic cars and fine wine, aircraft do not increase in value based on older age. So what does make an aircraft increase in value?

Honestly, the only time I have seen that occur was between 2003 and 2008, when the emerging markets were exploding and there was just not enough supply of new or like-new aircraft to fulfill the appetite of these new markets. In those days it was not out of the realm of possibility for the price of a new airplane or airplane position to have a premium of as much as 15 percent over retail. That would also apply to airplanes that may have been one or two years old.

However, as soon as the economic downturn occurred in 2008/09, the price of business airplanes lost between 50 to 70 percent of their value. One of the drivers for such a steep decline was the fact that people had paid full retail, as well as that premium.

It is true that when supply exceeds demand the price of the aircraft can be driven down much more readily than the opposite effect of higher demand oversupply driving prices up. Often what occurs in periods of lower inventory levels and picked-over supply is that the residual loss rate will narrow but the idea of prices going up does not occur. In fact, even in the fourth quarter of 2020 when the market was in a frenzy driven by buyers wanting to capture the bonus depreciation and fulfilling the appetite of the first-time buyer, prices still went down sale over sale, albeit at a slower rate.

Today, at the end of the first quarter, sales remain steady, but we are suffering a bit from picked over inventory from the fourth quarter. My job then as sales professionals is a bit more challenging finding a “diamond” aircraft to transact.

There are sellers today who believe this reduced inventory level should be driving up prices, especially in a few popular categories. I am seeing unusually high asking prices being set, along with final sale price expectations rising. Even with the lower inventory levels, these attempts to sway the market are still falling short of the seller’s expectations, resulting in longer days on market and discounts below the expected market price.

If you are a buyer today, be patient. You will be successful at finding that choice aircraft. I also know you will not have to feel like you’ve become swooped up in a pricing frenzy. Overall, I believe 2021 will be a very balanced market year.

I am hopeful that the corporate buying will return, and I am also confident that the corporate selling will result in some added inventory for us all to choose from. I am convinced that some corporate operators will resume a more normal operation this year as countries open. I am also convinced there will be some right-sizing of fleet size. This should be a good year for operations, transaction levels, and pricing.

Jay Mesinger is the CEO and Founder of Mesinger Jet Sales, an international aircraft brokerage firm. With 47 years of successfully buying and selling aircraft, Mesinger Jet Sales has a global reputation for personalized, transparent service.