Methodology of accounting for the influence of real technical condition of aircrafts on their market value

Abstract

The article describes the features of the application of traditional methods of assessing the market value of commercial aircrafts at their operation on condition maintenance. It is shown that according to the sources used to estimate the market value, made of wear partition components and assemblies in the 2 main types – eliminable and irremovable, of which the first one is the physical wear, are eliminated by repair, while for the aircrafts operated on condition maintenance the second one is usually associated with the various aspects of functional and economic obsolescence. However, as it follows from the same sources, with appropriate maintenance, repair and modernization of aircrafts the irremovable wear can be at least partially eliminated, resulting in on condition maintenance receive unlimited physically that in the general case, contrary to logic and common sense. As a result, by using known methods for the valuation of commercial aircraft there are contradictions and even errors, significantly reduce the accuracy of the assessment results.

The reason of the inconsistencies lies in insufficient information support of used methods – they do not take into account the condition of the aircraft fleet estimated type. The researches, based on data available in the fleet of two randomly selected modifications in the past popular commercial aircraft of MD-80 type, have shown that intensive commercial operation (regular airlines) has a limit of 25 years. This also sets a limit of the income approach valuation, and, despite the absence of the designated resource, has its counterpart – the deadline for operating commercial aircrafts is 35 years, after which 99 % of the fleet is not operated, and about 90 % has already scrapped.

According to the study it was concluded that there is no point in introducing workarounds for the calculation of irremovable depreciation of aircrafts operated on condition maintenance as to obtain reliable results, it is sufficient to consider irremovable deterioration as it is usually done in cases of operation with a designated resource. At the same time, the absence of accounting deadlines operation in assessing the market value of commercial aircrafts will inevitably lead to unnecessary use of inappropriate methods and erroneous results, including overestimation of the estimated value of aircrafts.