A small fleet of World War II planes gathering dust in a Texas barn sold last August for US$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 Spanish-built 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 Albatross  DII dates from World War I. Collectors will pay a 25 per cent premium for planes entirely composed of original parts

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.