Fleet Appraisal
Whether you have a commercial fleet of helicopters or a parapublic fleet of emergency service helicopters, we specialise in providing an accurate opinion of its value. By evaluating individual models and then combining the fleet as a whole, our appraisers ensure you will have all the data necessary to keep key stakeholders informed on the fair market value of your rotary-wing aircraft.
Process of Helicopter Fleet Appraisal
To appraise your fleet, our appraisers have a variety of steps they must follow. First, we will discuss your appraisal request so we can reach an appraisal agreement (or scope of works) that addresses your requirements. We will then if required physically inspect the aircraft and examine all associated documents such as pilot log, maintenance record, ownership documents plus airworthiness certification; finally F4 will conduct a thorough study and analysis of the oft-tumultuous market. Once this process is complete, we will present you with a desktop appraisal, an extended desktop appraisal or an inspection report first before the appraisal whichever was agreed as the scope of works, including an informed opinion on its fair market value.
Most Used Appraisal Methods
Cost Approach
This method calculates the value of the fleet based on the price to replace individual assets with the same or similar model of aircraft. It takes in various factors during this process including possible depreciation.
Income Approach
If your fleet is used to generate income, which is often the case for commercial helicopters, this method will evaluate the potential income they could generate for you.
Market Approach
Utilising market trends and comparing sales data for similar and/or the same models where available, this method determines the value for the overall fleet and individual models based on its potential market sale.
Valuation Options for Commercial Helicopter Assets
Please note that while these have been called value concepts here, they are not the only acceptable definitions, since contracts or jurisdictions may dictate somewhat different philosophies. Therefore, these definitions may be expanded or refined as the purpose and function of an appraisal dictate, as long as the fundamental concepts are not altered. In other cases, the laws of a country, state, region, or regulatory agency may require other terms, which therefore would take precedence over the definitions shown here.
Aircraft Diminution in Value
A form of economic obsolescence, external to the aircraft, that can be measured by the difference in value between an aircraft with damage history and an identical undamaged aircraft. It is a measure of lost value related to market perception, not airworthiness.
Fair Market Value
An opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date.
Fair Market Value Installed
An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering market conditions for the asset being valued, independent of earnings generated by the business in which the property is or will be installed, as of a specific date.
Fair Market Value Removed
An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering removal of the property to another location, as of a specific date.
Fair Market Value in Continued Use with an Earnings Analysis
An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date and supported by the earnings of the business.
Fair Market Value in Continued Use with Assumed Earnings
An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date and assuming that the business earnings support the value reported, without verification.
Fair Value
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Source: Financial Accounting Standards Board Accounting Standards Codification Topic 820 (ASC 820)
Forced Liquidation Value
An opinion of the gross amount, expressed in terms of money, that typically could be realised from a properly advertised and conducted public auction, with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis, as of a specific date.
Liquidation Value in Place
An opinion of the gross amount, expressed in terms of money that typically could be realised from a properly advertised transaction, with the seller being compelled to sell, as of a specific date, for a failed, non-operating facility, assuming that the entire facility is sold intact.
Orderly Liquidation
An opinion of the gross amount, expressed in terms of money, that typically could be realised from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.
Replacement Cost New
The current cost of a similar new property having the nearest equivalent utility as the property being appraised, as of a specific date.
Reproduction Cost New
The cost of reproducing a new replica of a property on the basis of current prices with the same or closely similar materials, as of a specific date.
Salvage Value
An opinion of the amount, expressed in terms of money that may be expected for the whole property or a component of the whole property that is retired from service for possible use elsewhere, as of a specific date.
Scrap Value
An opinion of the amount, expressed in terms of money that could be realised for the property if it were sold for its material content, not for a productive use, as of a specific date.
Source: Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets 4th Edition - 2020
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Alastair M. Fallon
Accredited Senior Appraiser
Machinery & Technical Specialties
Aircraft
