Out of Production Beechcraft Premier 1 and Premier 1A Used Prices

Hawker Beechcraft has received court approval to exit bankruptcy as a standalone company producing only prop aircraft as Beechcraft Corp.  The court has also allowed HBC to discontinue warranty and support programs for the Hawker 4000 and Beechcraft Premier I/IA.  What impact does the lack of warranty support and being out of production have on Premier aircraft?
There are slightly less than 300 Beechcraft Premier aircraft in service, of which approximately 60% are out of warranty or close to being out of warranty.  In many industries 300 units would be too small of a number to provide support.  However, in the aviation industry, with long economic lives for aircraft, this is a significant number of aircraft that will need parts and service.  As a result of bankruptcy many of the vendors will be released from their proprietary contracts with HBC and be allowed to sell and repair parts.  The biggest negative might be a pool of rotatables, however I suspect some maintenance providers will see value in inventorying those as well.
The market place quickly factored in the bad news of the Premier being out of production and the news HBC would not stand behind their warranty and support agreements.  Some of this is over-reaction since the engine and avionics package is modern and desirable in the light jet market.  JSSI has announced an option for Premier owners to help guarantee their operating costs.  Likely not to be inexpensive, operators will at least obtain the ability to forecast their operating costs.  However there are issues to operating a Premier that you don’t have with other competing aircraft.  Price will offset some of those and it appears the marketplace has adjusted prices accordingly.
What to do if you own a Premier?  I have two suggestions.  First, is to fly it and keep it as long as originally planned.  When the time comes to trade you won’t be shocked by the lower values and will understand that the market place can be cruel but there will be a market.  You may experience some parts issues however they should not be severe.  You will have gotten good transportation at a higher life cycle cost than planned but it still provided efficient transportation.  Second, is to bite the bullet with the lower values and take advantage of the weak overall market that exists for the replacement aircraft.  More than likely we will not see a big percentage increase in future Premier values, but we will see competing aircraft become more expensive.  You will soften the downside and help your future life cycle costs.
Hawkeye Aircraft Acquisitions has over 30 years of aviation experience and is an aviation consulting and acquisition firm.  Our product is the peace of mind of knowing you have made the most informed decision available.  Call or email to learn more about our services.
Mike McCracken
President
Hawkeye Aircraft Acquisitions LLC
727 796 0903

www.hawkeye-aircraft.com

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