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Old 15th May 2007 | 13:00
  #30 (permalink)  
dublinpilot
 
Joined: Feb 2002
Posts: 2,547
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From: Dublin
Mike has it right.

An open market value is what a willing buyer will pay for it, from a willing seller, in the condition that it is in. Is is not what the airframe is worth with a zero timed enging.

Market value is market value. If it is worth £10k today and £8k in 1000hrs thats normal depreciation. Put a new engine in and the value will not rise back up to £10k despite what you may hope.
Quite true, but if you have the choice of two aircraft in identical condition, and one has 1000 hours on the engine, and one has a zero timed engine (straight sale, no engine fund) which would you pay more for?


___________________________________________________________

Lets ask a different question.
There is a 1/5 share in a group aircraft for sale.
The engine in the aircraft has a 2000hr TBO. It currently has 1000 hours used up, and is expected to be good for the other 1000 hours. The cost of replacing the engine is £20,000.

On the open market, the aircraft would sell whole (no engine fund, just a straight sale) for £50,000.

How much would you pay for the share if

A) there was no engine fund?
B) there was £10,000 in the group engine fund?
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