Avionics News March 2018 - 64

IS THERE PROFIT IN A PANEL UPGRADE?
Continued from page 63

"Having the mandates installed will allow a quicker
sale, and that brings more value," explained Phil Jordan,
senior director of sales for Banyan Air Services. "The
first thing we look at today is if the airplane is 2020
compliant. ADS-B Out, and if you have a larger cabin
airplane, meeting the current TCAS 7.1 and CPDLC
mandates - these updates are playing a critical part in the
sale equation today.
"Having all the mandate compliance completed puts
an aircraft at the top of the list. Older airplanes that have
some new avionics in their panel adds value, but not like
the mandate compliance equipment. It's a nice-to-have
versus a must-have type of thing. There's a big difference in the overall value between the two."
Jordan shared a story of a recent customer who had an
early model, high-time Challenger 300 that he wanted to
sell. To make it attractive to prospects, he had the entire
legacy Pro Line 21 CRT panel redone with Rockwell
Collins Pro Line 21 advanced LCD displays.
"By 2020, no one will be supporting the CRTs any
longer, so that upgrade was a good investment," he said.
"The owner also had all the mandates done including
ADS-B Out, version 2, and TCAS 7.1. He spent about
a half-million dollars on all the upgrades and ended up
selling it for $600,000 more than other 300s that had not
been upgraded. The new owner can now fly that Challenger for five or six years and not have to deal with
anything. That's added value for the buyer and seller."
Of course, not everyone who invests $500,000 in an avionics upgrade will get all their money back. Before you sign up
for any avionics work, it may we well worth your time to talk
to an accredited aircraft appraiser.
Why an appraiser? "They're a source for independent,
impartial and objective information on how your particular airplane stacks up in the current market," stated Pat
Duggins, certified aircraft appraiser and owner of Pat
Duggins Consulting Services. "The Aircraft Blue Book
and Vref give you prices for average airplanes of that
type. There are no average airplanes. From the condition of the interior to who overhauled the engine, every
airplane is unique and so is its value.
"If you're thinking of resale value, avionics upgrades
need to be treated like any business decision. Do the
benefits outweigh the expense? An avionics shop or
aircraft owner can benefit from the specific market information that an appraiser uses to form an opinion of an
aircraft's pre- and post-upgrade value. This information
can give you a good idea about how much one type of
avionics will add value versus another type.
64

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2018

"Avionics technology changes quickly, so you don't
know what next year will bring as far as ROI goes.
What's hot today are heads-up displays and synthetic
vision - and ADS-B, of course. We don't see anything on
the horizon that will replace these technologies, so their
value will stay high."
You can't put a price on safety. Or can you?
So far, we've concentrated on upgrading your avionics with resale in mind, but what if you like your current
airplane and don't want to sell it. Should that impact the
way you look at an avionics upgrade?
"Every airplane will need an ADS-B Out upgrade by
2020, so if you have to put your airplane under the knife
anyway, this is a great time to do other avionics upgrades," explained Fred Ahles, president of Premier Aircraft Sales Inc. "I recently talked to a fellow who owns
an older Cessna Turbo 210 with one Garmin GNS 430 in
it. That airplane is a 430 ahead of early 1980s avionics
technology, so he's looking to upgrade the panel soon.
"Since he needs the ADS-B unit, it's the perfect time
to also upgrade his radios with Garmin 750 and 650
touchscreens at the same time. It's around a $35,000
upgrade, but his accountant is saying it's a good investment. I think if he also adds the new Garmin TXi
displays, which will up the cost, I think it will be an even
better move for many reasons.
"He is comfortable and proficient with his current
steam gauges, but how reliable are the legacy instruments? The new glass displays give you incredible reliability and provide information and situational awareness that just isn't possible with the old units. They will
make you a smarter and safer pilot."
But Ahles raises a good point: While mixing and
matching new touchscreen displays with legacy analog
gauges or even first-generation EFIS displays is possible,
is it a wise move from a value-added perspective?
"Buyers aren't only looking for the aircraft to be compliant, they want it to be compliant and done professionally," Jordan said. "Mixing avionics can bring the value
of the panel down a notch or two.
"You see that a lot in older airplanes. People will try to
do one thing expensive in the panel and they cheap out
on other units. That actually hurts the value. It's much
better to do a correct and well-thought solution upfront.
For example, if it has all steam gauges except for two
Garmin 335 transponders with ADS-B Out, it will have
more value to buyers than if it had one Garmin G600 and
no ADS-B compliance."
Another point Jordan stressed is the need to keep the
panel's layout standard.
"Plan the panel so it works for other pilots - a good,



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