New vs Used
Purchasing a new Twin Otter can often be more economical and provide a greater return on investment (ROI) than buying used. In determining whether or not buying new vs used is right for you, a range of variables and costs over the aircraft's lifecycle need to be assessed.
Variables to Consider
There are many variables to consider when looking at purchasing a new Twin Otter vs a used Twin Otter. These can be classified into purchase costs, operating cost, operating considerations and cash flow.
Purchase costs are of course lower for a used aircraft. Used prices can vary considerably as can the amount of refurbishment work that may be required to put a used aircraft into service in your operation, consequently selection of the right aircraft to match operational requirements is fundamental. Additionally, finance rates, deposits and finance term will vary between new and used aircraft with it generally being easier to get lower rates and longer terms on a new aircraft.
Operating Costs. Used Twin Otter maintenance costs will typically be higher than a new aircraft due to a number of factors, such as warranty, increasing inspection requirements as the aircraft ages and increased unscheduled costs of older aircraft. We can model your potential maintenance costs for you based on the hours and cycles of the used aircraft you are considering and your proposed annual utilization. You can also use our Operating Cost Calculator to receive an estimate of how much it will cost to run the Series 400 Twin Otter on your route.
Operating Considerations. Increased downtime for longer inspection requirements and the inevitable decline in despatch reliability from older aircraft can lead to lost revenue opportunities or additional cost. Additionally, in some charter markets, customers place limitations on the maximum age of an aircraft. This may further limit revenue opportunities.
Cash Flow. A used aircraft can provide a substantial upfront benefit to cash flow through a lower acquisition price. This can be partially offset through the warranty cost savings with a new aircraft, a potentially lower upfront finance deposit % and potential tax depreciation benefits depending on your country of ownership and operation and the associated tax regulations. As aircraft age, a new Twin Otter will tend to provide a better cash flow profile as final trade in values will be higher and later year maintenance costs lower for the new aircraft. A further important consideration over the long term is the useful economic life of both a new and used aircraft. A new Twin Otter will still be economical over 20 years; however, the youngest used Twin Otter 300 series is already 28 years old. While there are 48 year old Twin Otters still flying, a high utilization commercial operation may require an additional used aircraft purchase within a 20-year horizon.
We Can Help You Evaluate a New vs Used Decision
It's not always clear-cut whether a new or a used aircraft purchase is the right one. If you are looking for a more detailed estimate of a new vs used Twin Otter based on your variables, fill out the form below and we will provide you with a customized comparative new vs used cost analysis and report.