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Selling pieces of history

A vintage warbird dealer enjoys lofty prices as demand surges

June 23, 2008|Martin Zimmerman | Times Staff Writer

In the world of warbird collecting, Glacier Girl was a rare prize.

The World War II-era P-38 fighter made an emergency landing on a Greenland ice cap in July 1942 while on a flight from Maine to England. The aircraft eventually was buried under a layer of ice and snow more than 200 feet thick.

In 1992, Glacier Girl was excavated and later restored to flying condition -- one of a handful of airworthy P-38s known to exist. When the Kentucky entrepreneur who led the recovery effort died in 2005, the famous plane's future was, well, up in the air.

Enter Provenance Fighter Sales Inc., a Murrieta-based company that buys and sells vintage warplanes.

"Everyone thought it would be for sale, but I was the only one who called the family and asked," said Simon Brown, vice president of Provenance.

After eight months of negotiating, Brown bought Glacier Girl for an undisclosed sum and then sold the P-38 to a Texas oilman for close to $7 million. It was an eye-popping price, even in a niche where seven-figure price tags are not unusual.

Collecting World War II aircraft has boomed in recent years as wealthy, nostalgic baby boomers seek to own a piece of their parents' wartime experience.

"The sons and daughters of the World War II generation have grown up," said Russ Strine, president and co-founder of the Mid-Atlantic Air Museum in Reading, Pa. "Dad's gotten older or died, and this is a way to go back and feel close to him -- and pay homage to him."

For investors and collectors, it's a market driven by scarcity. For example, Lockheed built 10,000 P-38s at its Burbank factory during the war. Most of those that survived the fighting were scrapped. Today, only four are airworthy, Brown said, and a handful of others are being restored to flying condition.

That supply-and-demand equation is behind the run-up in prices. Just a few years ago, a prime-condition F4U Corsair -- the gull-winged fighter made famous in the South Pacific by the Black Sheep Squadron -- could be had for less than $2 million, Brown said. That plane would go for close to $4 million today.

Overall, Brown said, the value of collectible-condition World War II aircraft has been appreciating by 20% a year.

The jump in prices has changed the face of the typical collector. Doctors and airline pilots who once bought modestly priced P-51 Mustangs as weekend hobbies have given way to millionaire business owners such as Microsoft Corp. co-founder Paul Allen looking to add to extensive personal collections.

Provenance, which has seven employees, has been well positioned to profit from the trend, selling 16 aircraft last year for $30 million. Profit information is confidential, Brown said, but "we did quite well."

Provenance -- a term referring to a collectible's history or chain of ownership -- is owned by Tony Raftis, an Australian computer entrepreneur who is into Ferraris and other fast machines.

The company was founded in 2005 after Brown, who was brokering World War II aircraft, sold a Corsair for Raftis at a tidy profit.

"He said, 'Can this be done on a regular basis?' " Brown recalled. "I said, 'It can,' and we went out and had a beer and thought up the idea for this company."

The organizational chart is straightforward, Brown said: "He finances it and I run it."

Brown, a 37-year-old native of England who grew up in Torrance, doesn't have a pilot's license. But he's been interested in airplanes ever since his father, an aeronautical engineer at Southern California aircraft maker Northrop, took him to an air show when he was a kid. Now he spends much of his time traveling to shows and other places where aviation buffs gather, looking for planes that are for sale or might be soon.

Provenance shies away from another facet of warbird collecting: combing the jungles of New Guinea and other Pacific battlegrounds for downed aircraft that can be recovered and restored. Governments in recent years have grown increasingly touchy about these expeditions, and some have made it illegal to remove the planes.

Another popular hunting ground is northern Russia, where German and Soviet aircraft are occasionally discovered in remote areas. And some can suddenly reappear in more populated areas. Last year, a nearly intact P-38 that crashed off the coast of Wales suddenly emerged from the surf when shifting sands exposed it to the light of day 65 years after it went down.

For Provenance, the prime targets are Mustangs, Corsairs, British Spitfires and P-40s, which were made famous by American volunteers known as the Flying Tigers who fought for the Chinese against the Japanese before the U.S. entered the war.

"I like to focus on those four particular airplanes because I know there are always going to be multiple buyers," Brown said. "I can sell those all day long."

The increased demand for warbirds has made it more difficult for museums to afford prime specimens for their collections. It's also given rise to concerns that a speculative bubble could be in the making.

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