If you’re a piston pilot like me, you may have not seen Cirrus Vision Jets for sale on Controller or Trade-A-Plane. I tend to just click on piston engine listings. But if you select “Jet Aircraft” you’ll now see Vision Jets. Cirrus has pre-sold 600 jet deliveries. As of this week, twenty (20) of those delivery positions are for sale on Controller.
Lone Mountain Aircraft and Aerista (formerly TAS Aircraft Sales) are market makers for pre-sold positions in Cirrus Vision SF50 Jets. Both companies are part of Cirrus Aircraft’s pre-owned sales network.
Mark Rodgers founded Lone Mountain Aircraft in 2008. I caught up with him this week to discuss sales of pre-owned Cirrus Vision SF50 Jet positions. Mark said, the resale prices are based on four components:
- Contract price
- Consumer Price Index (CPI)
- Aircraft options
- Premium
Contract price: On Controller you’ll see 2018 jet positions listed for $1,390,000, which includes a $100,000 deposit. If an existing agreement is resold, the position holder would be refunded the deposit by the buyer. Initial contracts were signed with early position holders prior to the jet being certified. Some were signed ten years ago.
You’ll see a few listings with a deposit balance less than $100K. What’s up with that? Over the past 10 years, Cirrus allowed jet position holders to apply part of the deposit toward other Cirrus purchases, such as their piston airplanes. If the balance is less than $100K then the new purchaser would reimburse Cirrus instead of the position holder for the difference. I’m told the deposit is actually refundable if the position holder wants to cancel the agreement.
CPI Rider: The buyer and Cirrus knew it would be years before the first jet was certified. To provide a fair price at delivery those agreements included a rider to adjust the price relative to the CPI. Actually, over the past 10 years the CPI has incurred modest increases. But Mark said, he’s not seen a CPI accrual of less than ~10% or about $183,000 on the jet. So, add a CPI estimate to the initial contract price ($1.39 + $183K = $1,573,000).
Aircraft Options: The Cirrus jet comes well equipped but you may want to add some items, like real-time radar and enhanced traffic (for details, see my prior blog on 2017 Cirrus Vision Jet standard equipment and options). Mark said, a typical option selection would add $400,000 to the delivery price of a new jet. Early position holders may already have option equipment included in their price. Check for details.
Premium: Early position holders want a $600,000 – $750,000 premium to hand over their contract or about $2.6M total. Here’s their math: ($1.39M initial price + $183K CPI + $400K options + $600K position holder premium = $2.6M). Mark said, justification is based on the current price and delivery date of a new jet position from Cirrus. He said, that would probably be in the year 2022 for about $2.6M – $2.7M. After the 600 pre-sold positions have already been delivered to customers.
Currently, buyer demand is much greater than aircraft supply. Cirrus knows it needs to ramp up production. Current aviation articles quote the price of a new Cirrus Vision SF50 Personal Jet at about $2.0M. Giddy up.
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