The value of vintage fighter planes soars as in­vestors dis­cover a new pas­sion

The value of vintage fighter planes is soar­ing as in­vestors dis­cover a new pas­sion, writes Ru­pert Walker

Hong Kong Tatler - - Life -

A small fleet of World War II planes gath­er­ing dust in a Texas barn sold last Au­gust forus$15 mil­lion. A col­lec­tor paid US$6 mil­lion for the jewel, a Mark IX Spit­fire that fought in the Bat­tle of Bri­tain, which ended with the de­feat of the Luft­waffe and stirred Win­ston Churchill to re­mark: “Never in the field of hu­man con­flict has so much been owed by so many to so few.” The rest was spent on nine Bu­chons, the Span­ish­built ver­sion of Ger­many’s top fighter, the Messer­schmitt 109, which per­formed in the dog­fights of the 1969 film Bat­tle of Bri­tain.

Con­text is im­por­tant. In­vest­ment re­turns from vintage air­craft are de­ter­mined by rar­ity, de­sir­abil­ity, air­wor­thi­ness and—per­haps most of all—prove­nance. “Value is de­ter­mined by history,” says Si­mon Brown of Plat­inum Fighter Sales, who han­dled the Texas sale for Wil­son “Con­nie” Ed­wards, an oil ty­coon and for­mer stunt pi­lot who took the planes in lieu of cash for his work on the movie.

Ac­cord­ing to Gene Demarco, pro­duc­tion man­ager at the Vintage Avi­a­tor in New Zealand, the mar­ket has three main seg­ments: WWII air­craft, which make up about 65 per cent; WWI clas­sics, such as the Sop­with Camel (25 per cent); and in­ter- and post-war train­ers and com­mer­cial planes (10 per cent). The top end of the mar­ket is WWII fight­ers, or “war­birds.” They ex­ude glam­our and com­mand high prices, es­pe­cially if they saw com­bat, says Brown. In ad­di­tion to Spitfires and Messer­schmitts, they in­clude US clas­sics such as the P-51 Mus­tang, the Beechcraft Model D17 Stag­ger­wing and the Cur­tiss P-40

Warhawk. Such planes sell for US$2.5 mil­lion to US$5 mil­lion, and at­tract bil­lion­aires such as Mi­crosoft’s Paul Allen, one of the world’s big­gest col­lec­tors.

“The mar­ket for fight­ers is also dif­fer­en­ti­at­ing. In the past, any Spit­fire had a sim­i­lar value, but now its history and its au­then­tic­ity mat­ter more, with a 25 per cent pre­mium paid if the plane is en­tirely com­posed of orig­i­nal parts,” says Brown. Scarcity is also boost­ing prices. “Ev­ery­thing has now been found; there will be no more WWI or II fighter planes dis­cov­ered rust­ing in barns. “We know where all sur­viv­ing vintage planes are.”

Yet jewels do ap­pear. The dis­cov­ery three years ago of an RAF Kit­ty­hawk P-40 lost in Egypt in 1942 was de­scribed as the “avi­a­tion equiv­a­lent of Tu­tankhamun’s tomb.” Bri­tain’s Royal Air Force Mu­seum is seek­ing its re­turn. A year af­ter the P-40 find, a Ger­man Dornier Do-17 bomber shot down dur­ing the Bat­tle of Bri­tain was pulled from the English Chan­nel. Col­lec­tors would be keen to pay pre­mium prices if ei­ther was ever of­fered for sale.

De­mand is also strong for repli­cas built with orig­i­nal ma­te­ri­als and tech­niques. Demarco, who main­tains Lord of the Rings di­rec­tor Peter Jack­son’s WWI planes in New Zealand, de­scribes the ex­act repli­cas his com­pany crafts as “like fine fur­ni­ture or mu­si­cal in­stru­ments with wings.”

The al­ter­na­tive to work­ing repli­cas are mu­seum pieces re­stored from rem­nants of planes, such as those that fought above the trenches of the Western Front and re­call the ex­ploits of the Red Baron. “The de­mand for WWI planes has been boosted by the cen­te­nary of the con­flict,” says Demarco, who has seen in­ter­est from out­side the tra­di­tional Euro­pean and North Amer­i­can mar­kets.

De­mand has emerged in the past few years in Hong Kong, Ja­pan, Sin­ga­pore and the Mid­dle East. And Chi­nese and Aus­tralian clas­sic car col­lec­tors have in­quired about planes such as the Sop­with Snipe, which was pow­ered by a Bent­ley en­gine. Brown has en­joyed a surge of in­ter­est from Main­land China—with in­quiries from 50 dif­fer­ent sources—for WWII air­craft, in par­tic­u­lar P-40 Warhawks, which had been a men­ac­ing pres­ence in Asia. He re­cently hired some­one to cre­ate a Chi­nese-lan­guage web­site.

The mar­ket is shift­ing in other ways, too, as in­vestors join col­lec­tors. Brown re­cently sold a Messer­schmitt 109, the only sur­viv­ing Ger­man air­craft from the Bat­tle of Bri­tain, to an Aus­tralian in­vest­ment bank for US$3.5 mil­lion. The bank in­tends to hold it for at least seven years, and iden­ti­fies it as an al­ter­na­tive to the clas­sic cars that com­prise the bulk of its “pas­sion” in­vest­ments.

“Vintage air­craft are un­der­val­ued com­pared with clas­sic cars,” says Brown. The price of “ex­cep­tional” clas­sic cars has climbed 163 per cent since 2009, ac­cord­ing to the His­toric Au­to­mo­bile Group In­ter­na­tional, a Uk-based in­vest­ment re­search or­gan­i­sa­tion. How­ever, it’s dif­fi­cult to in­cor­po­rate vintage air­craft into an in­dex to mea­sure re­turns as there are not enough sales. For ex­am­ple, six P-51 Mus­tangs are for sale at present, but only two or three are likely to sell this year, says Ford von Weise, head of air­craft fi­nance at Citi Pri­vate Bank. Ul­ti­mately, “peo­ple buy clas­sic air­craft be­cause they are pas­sion­ate about them, not as an al­ter­na­tive in­vest­ment. Yet, like fine art, they tend to ap­pre­ci­ate in value,” he says.

The big­gest ex­pense is in­sur­ance. The size of the pre­mium charged for fly­able air­craft de­pends on the ex­pe­ri­ence of the pi­lot. Premi­ums for full cov­er­age av­er­age about 3 per cent of the value of the plane, ac­cord­ing to Brown. En­gine re­fur­bish­ment costs of be­tween US$150,000 and US$200,000 might ap­pear high, but a newly tuned en­gine will last for 600 hours of fly­ing time.

Von Weise warns, and Demarco agrees, that it’s es­sen­tial to hire an ex­pert con­sul­tant be­fore feed­ing your aerial pas­sion with a ma­jor pur­chase.

Must-have The Amer­i­can TF-51 Mus­tang ex­udes glam­our and com­mands high prices at auc­tion

Fly­ing high The Al­ba­tross DII dates from World War I. Col­lec­tors will pay a 25 per cent pre­mium for planes en­tirely com­posed of orig­i­nal parts

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