Blog - Mesinger Jet Sales

Mesinger Pulse – “Why Now? Why Not Before?”

Before I launch into this articles topic, I wanted to take a moment and comment on this year’s NBAA BACE in Las Vegas. Aside from Vegas being a great city for this event, including weather, restaurants, static display venue and hotel accommodations, we must remember it is no better than the people. Mix in great industry participants with an amazing convention development strategy and execution made in great part through the leadership of NBAA and you have another very successful event. Congratulations to all who lead this event and participated at every level. Bravo!!

I had a chance to talk to many industry leaders during the event. In many cases, and often unsolicited, a common theme kept coming up, the ethics of our industry. Of course, every conversation included the “how’s business” question and often that ended up in the same place. Never worked so hard, earned less per deal. But the deals were happening and the majority of people I spoke to endorsed the North American activity and were excited to see a steady growth in transactions. The conversations however, kept coming back to ethics.

So, why now? Maybe it goes back to the other side of the conversation, never worked so hard and earned less per deal. Maybe there is a glass ceiling or tipping point that we as an industry are coming up to. Maybe there is an underlying feeling that it may be time to create an industry theme and work in sync to instill some barriers to entry as well as methods to identify and police violations to usual and customary best practices. The vast majority of our industry participants use best practices without mandates or written Codes of Ethics. It is just the way most people conduct their life as well as their business. After all, written Codes of Ethics are meaningless, unless actually followed and adhered to. You might say without adherence they are not worth the paper they are written on!

What are areas of concern that most people who were having these discussions focused on? Pretty much universally it was transparency. How does a lack of transparency affect a transaction? Financial parts of the transactions can be masked thereby creating opportunities that are not disclosed to benefit someone in the transaction. One can see this in back-to-back transactions and accepting or paying finders fees or referral fees that are not disclosed. These can be small remunerations or large out of balance payments.

The discussions during my visit to BACE leaned towards trying to develop sweeping industry best practices. By the way, this is not just about the brokerage or consulting side of the aircraft transaction. These discussions also included every other facet of the industry including maintenance, management, fueling and equipment sales that were experiencing violations of best practices.

As I said, maybe like never before are the players in our industry tired of feeling as if they have never worked harder for less. They feel as if the reason for the less is due to the feeling that buyers and sellers of all the areas of our industry are feeling they are getting less value from the service providers and so they want to pay less for the service. They may feel that due to hidden fees and remunerations they are not comfortable paying higher or more reasonable fees. They cannot put their finger on exactly why, but it may be a general feeling of distrust due to hearing stories of improprieties as well as possibly having actually experienced them.

Why not before? Simple. Often it takes that boiling point or tipping point to collectively reach an end of wit’s feeling. I found it so interesting that as an industry we may have hit that wall together. Best practices are a wonderful thing. In fact, one does not have to shout it and say, “look over here we adhere to best practices!” Reputations always proceed the act. Typically, people who do it right don’t do it by accident, they do it because it is their way of life. People that do not adhere to best practices or lack of transparency also do not act that way by accident. It almost seems as if they don’t know how to do it right and would mess up time after time as if it is their way of life.

This will be very interesting to see if this discussion dies on the vine or really gets traction. It would be a welcome change for everyone that wants to play on a level field.

Challenger 300, Serial Number 20007

We are proud to exclusively represent for immediate sale Bombardier Challenger 300, Serial Number 20007, Registration Number XA-UXW.  This is a good pedigree, well-equipped beautiful airplane that has always been very well maintained.  The owner has replaced it with a longer-range aircraft to accomplish an evolving mission profile which is what is driving this sale.  The engines on this Challenger 300 are enrolled on the Honeywell MSP Gold program and APU is enrolled on the Honeywell MSP program, the avionics have been upgraded to the version 6.0 software and the interior is configured with capacity for ten passengers with a forward four-place club arrangement, a three-place divan opposite two club seats and a belted lav seat .

Bombardier started developing the Challenger 300 in 1999 as a “clean-sheet design” and they delivered the first customer aircraft in 2003.  The Challenger 300 has been a very successful product for Bombardier and today there are over 450 Challenger 300s flying around the world.  We have helped clients buy and sell many Challenger 300s over the last several years and it continues to prove to be an aircraft type in high demand by private individuals and companies alike as well as both first-time and seasoned aircraft buyers.

Our client understands the competitive market and they are ready to be competitive sellers within it.  View detailed specifications, lots of photographs and a video on our website at http://jetsales.com/jets/2004-challenger-300-sn-20007/ and call us today to learn more.  We look forward to speaking with you.

        

Citation X S/N 243, Registration Number N373AB

We are proud to exclusively represent for immediate sale a one owner Cessna service center maintained Citation X S/N 243, Registration Number N373AB.  This is truly the best value Citation X available for sale in the world.  It has winglets, the full five tube Primus Elite cockpit retrofit with XM Graphical Weather, an extensively refurbished interior that looks and smells like new with almost every cabin surface touched by Cessna Wichita in 2017, SwiftBroadband internet with Wi-Fi, fresh inspections and more and it is priced under $6,000,000 USD.  Additionally, it has low total time with roughly 3,800 hours, the engines are enrolled on Rolls-Royce Corporate Care, the APU is enrolled on MSP Gold and the airframe is enrolled on the Textron ProParts and ProTech Labor programs.

Citation Xs first entered into service in 1996.  They are one of the fastest business jets in the world rivaled only by the Gulfstream G650.  Over the years the X set several speed records and in 1997 the Citation X design team was awarded the National Aeronautic Association’s Robert J. Collier Trophy.  The Citation X has long been a staple of many fractional ownership program fleets and corporate and personal flight department fleets proving their reliability.  Citation Xs are still in production today (now the Citation+) and there are now approximately 340 Citation X and X+ aircraft in service worldwide.  Cessna also has a vast service and support network supporting their fleet of Citations around the world.

Now with the options to add the Elliptical Winglet upgrade and the Honeywell Primus Elite 875 cockpit retrofit one of the world’s fastest best business jets is even better than before.  Learn more about both of these incredible enhancements using the links below.

Elliptical Winglets – http://d31hzlhk6di2h5.cloudfront.net/20170814/b9/cd/f4/a7/8c85699b3cc3e4c48c1e0908/Winglet_CitationX_Brochure.pdf

Honeywell Primus Elite 875 Cockpit Retrofit – http://d31hzlhk6di2h5.cloudfront.net/20170814/07/25/76/3e/43de321b1ea84dc943b618b9/2014-01_o_Primus_Elite_DU875_CitationX_SB.pdf

The Citation X is an incredible choice for domestic and international missions.  Call us today to learn more about this great aircraft at +1-303-444-6766 or view detailed specifications, lots of photographs and a video on our website at http://jetsales.com/jets/2005-citation-x-sn243/.  We look forward to speaking with you.

    

Mesinger Pulse – “Circling the Wagons”

 

There are multiple private and public industry events taking place this month and next. Many of the airframe manufacturers and fractional companies are gathering small select industry participants to discuss our current market as it pertains to their specific positioning as well as broader discussions about trends and projections. We are always honored to be invited to these group discussions and always leave with a greater sense of worth and understanding about our great industry. On the more public side of events, National Business Aviation Association (NBAA), recently hosted their Regional Forum in Morristown, NJ, and NBAA-BACE takes place in Las Vegas next month.

All of these events allow for a gathering of large and small operations to collaborate, consolidate and deliberate the markets and influencing events. No doubt the continuing topics will touch on market strengths, pre-owned pricing and availability of aircraft, new versus pre-owned sales statistics, as well as new product roll outs and introductions. Some of the discussions fall on historical knowledge, some rely on predicting trends and some just fall into the gut check area.

As I am writing this article a quick glance at the Dow Jones for today show the markets up 260 points due to a collective sigh of relief for the minimal apparent loss of life from Irma. I only bring this up to demonstrate the fragility of the financial markets domestically and internationally. Just last week the markets were struggling for days over the provocative statements being hurled around by the US and N. Korea. As I read the different blogs that appear daily regarding financial markets as well as specific trend prognostications about our industry I see a theme occurring regarding what is looking in some circles as a lessening of the residual loss rates of aircraft in some categories. Also, along with that sentiment is the discussion of the differentiation between the cost of the new offerings from manufacturers and the opportunities afforded in the like-new aircraft. The theme is twofold. First, is it sustainable and second, is it real? Funny how time changes things. Go back down memory lane with me to 2007, and remember that not only did the value of young aircraft not go down against the price of a new ones, in many cases they actually could have been the same price.

And what about the discussion of supply and demand? It is said that there may be a percent of available aircraft by category that equals as much as 10-15%, but then the conversation goes on to say that once you parse the list of available aircraft down to the select few that are registered in the United States, have great pedigree, no damage history and the most popular configuration, you may only be left with a very few aircraft rather than 10-15% of the fleet in that segment. This may be true, however the distraction that can be made by the noise that we hear and see daily with eblasts like “Huge Price Reduction” or “Next to Sell” or “Owner Wants It to Be Sold Today” can be very seductive for what the untrained eye may make one feel about a deal as they approach a market segment. This distraction can cause you to miss the real deal by taking precious time away from the right opportunity.

If there is one take away from all this it is the reality of the tenuous nature of the market we are all in. Deals are taking longer to close. Still not totally sure there is any one reason for this phenomenon but it adds to the stress of each transaction. The saying “time kills deals” has never been as true as it is today. Given the volatility of our world and the added time of the transaction the collective sigh of relief that is heard when a deal closes is remarkable. Hurricanes, debt ceilings, dictators and unstable geopolitical environments are all contributing to a shaky recovery that could take two steps back rather than one step forward at every sunrise.

So why say circle the wagons? It seems like in old westerns the circling of the wagons provided a barrier from the enemy. I’m not always sure who the enemy is in our case, but providing a barrier never hurts. It also gives us a chance to talk amongst ourselves to discuss the ideas and share the thoughts that can help build a strong front for our future. I look forward to seeing you all next month in Las Vegas. It is always joyous to gather and enjoy each other’s company. This year is shaping up to be a record year for attendance and an amazing opportunity for understanding shared product introductions and new service offerings. If you have not already made plans to attend NBAA-BACE it is not too late. Go online to NBAA.org today and register. I have seen the list of educational and informational programing and it is exceptional.

Also, please make plans to attend the Corporate Angel Network event on Wednesday night. This event is perhaps the best networking event at the convention. Wednesday, October 11, 2017, 6:00 p.m. – 8:00 p.m., Wynn Hotel Las Vegas – Lafite Ballroom. See you there!

Mesinger Pulse – “Thunder Only Happens When It’s Raining”

Every once in a while, a song title or lyrics can be used to perfectly describe totally unrelated current events. Now, if you can break away from humming this Fleetwood Mac song, let’s move on to the topic. Is the market changing? Is it raining now and creating this discussion “thunder” or is change not really happening?

There are a few categories of planes, that upon closer inspection and culling of the available aircraft, are much less supply rich than they appear to be at first glance. So, take any list of the total aircraft and pare it down based on the criteria that either your client has for you or just general usual and customary criteria such as pedigree, equipment, total time, damage history, configuration and registration history. Now once you have created your internal checklist of items required to meet your clients mandate is there an aircraft that actually checks all of the boxes? Is there an aircraft that checks most of the boxes? Are the unchecked boxes criteria that can be checked with additional investment or are some unchecked boxes those that cannot ever be checked due to the specific criteria? For instance, you cannot buy your way out of damage history or history of corrosion and repairs. You will never be able to turn the hands of time back to make an otherwise great plane with just too much time fit your mandate. But what do you do with an aircraft that does check all the boxes? Is that a plane that perhaps you might be willing to pay slightly more for based on the aggregate of the offering?

My short answer to buyers is, yes, if you can get the mandate boxes checked with twenty-five or fifty cent dollars rather than having to buy the plane that has most boxes checked, but then spend one hundred cent dollars, do it. Why pay more for less when you can get what is no doubt a better buy with smart calculations made on a willingness to pay slightly more for the better plane? I do not think that residual loss, even quarter over quarter, is over. I am just saying that approaching markets with an attitude that there is so much inventory that every plane is a steal may be misleading. I always tell my clients that our goal is not to buy a cheap plane cheap, but rather to find and buy a great plane at the best price. This “Best Price” discussion means some consideration for benefits and value.

Back to the original question. Is the market changing? Again, the short answer is, yes. Is it shifting dramatically? The even shorter answer is, no! Prices are still trending down in almost every category. In a few, the residual loss rate may be slowing, but prices are not going up. In fact, let’s not forget that these pieces of equipment are just that, they are not investments like real estate or stock shares. These pieces of equipment get older, they suffer with time and they are impacted by use. What may be changing is the perception of the market. The perception cannot continue to be that markets are supply rich. The perception needs to shift to be that markets are still around 10% of fleet supply, however as I mentioned above, they are not all good and qualified to meet your clients’ mandates.

The transactions that are taking place are still predominantly in North America which means that much of the available inventory that is not US based is harder to contract and costlier to purchase. This continues to shift the focus on the available aircraft based here in North America. Don’t get me wrong, there are not inherent problems with aircraft based out of the US, however there are regions of the world who’s regulatory recording bodies do not track liens or identify owners and just focus on operators. These nuances create a more problematic and even risky situation to know with certainty that there are no liens lurking in the shadows.

Another significant development that is taking place now with respect to process and timing of a sale is that the service centers are slammed. It now may take as long as 30 days to get a slot for a pre-buy. Once in a facility, since there seems to be a lot of over promising with respect to labor availability, the inspection is also taking longer. One thing we all know is time kills deals! This is also holding true with modification timelines. What took three weeks can now take five weeks. Therefore, good planning and setting the right client expectations, are critical.

So, is that a sonic boom or is that thunder and is it really raining?

Airbus Helicopters H145 (Formerly Known As The EC145 T2) For Sale – More Power. Less Noise. Great Style.

We are proud to represent for immediate sale a 2016 model VIP configured Airbus Helicopters H145 (formerly known as the EC145 T2).  This helicopter has a beautiful 8 passenger custom interior specifically utilizing lighter weight materials and extra soundproofing and it is also loaded with options to make it a perfect helicopter for personal or business use and yacht landings.

Some of the highlights include: Helionix with dual pilot IFR Garmin GTN 750 avionics, NVG (night vision) compatibility, emergency floats, lashing points, Bose headsets at every seat powered directly by the helicopter and several USB ports to power devices such as phones and iPads. The owner has also created a unique beneficial larger aft cargo bay through some customization of the carpet, freeing the seat tracks to allow the aft seats to move forward creating more storage. There is no other like-new, turn-key, U.S. based and registered VIP H145 helicopter available for sale; and with an asking price of $8,630,000 it is a great value.

The owner is a passionate aviator with other fixed wing and rotor aircraft.  This is being sold because of a changed mission profile.  We have bought and sold several aircraft for this client.  They spare no expense on maintenance, they understand and expect common and customary terms in pre-owned aircraft transactions and they are a pleasure to engage with.

The Airbus Helicopters H145 twin helicopter is the current production evolved version of the original EC145 and it offers more power, less noise and great style.  The differences between the H145 and its predecessor are significant.  The H145 has the new Helionix state-of-the-art glass panel avionics suite and Turbomeca Arriel 2E engines rated at 894 shaft horsepower each delivering 21% more takeoff power than the original EC145 engines.  It is faster, it can carry more weight, it can climb higher quicker and it posts dramatically better hover numbers than the original version.  The H145 also has a longer composite tail boom attached to a shrouded tail rotor or Fenestron increasing safety and decreasing noise.  And among other benefits, the H145 incorporates FADEC controls increasing efficiency and safety and decreasing pilot workload.

This is a great modern option for anyone looking for a personal or business use helicopter.  We are excited to represent this like-new option for sale.  Call us today to learn more, +1-303-444-6766 and find detailed specifications and lots of photographs on our website at http://jetsales.com/jets/2016-airbus-helicopters-h145-sn-20077/.

Gulfstream G450, Serial Number 4107, N717DX

We are proud to be representing a great Gulfstream G450, Serial Number 4107, Registration Number N717DX for sale.  It has been owned by one large U.S. Company and based in Pittsburgh, PA under the same management since it was new.  It is operated both as a Part 91 aircraft and it is on a Part 135 certificate.  This G450 is equipped with options including Gogo Biz ATG 5000 Broadband Internet with Text & Talk, TCAS 7.1, an upgraded 88 parameter Flight Data Recorder and more.  The engines are also enrolled on the Rolls-Royce Corporate Care program and the airframe is enrolled on the Gulfstream PlaneParts program.  The seller understands the competitive market and is ready to get this sold.  This aircraft represents a great value in the G450 market.

Gulfstream G450s follow a long lineage of innovative large body long range aircraft with the first Gulfstream GIV having entered service in 1987.  In 1993 Gulfstream delivered the first GIV-SP and then in 2004 the first G450.  Since 1987 Gulfstream has delivered over 830 GIVs, GIV-SPs and G450s to operators around the world and today there are over 330 Gulfstream G450s in service.

Gulfstream G450s incorporate the Honeywell “PlaneView” cockpit featuring 4 14” Honeywell LCD EFIS screens including both a Head-Up Display (HUD) and an Enhanced Vision System (EVS) as standard equipment.  The PlaneView cockpit was developed as a joint collaboration between Honeywell and Gulfstream with the intention to completely redesign Gulfstream’s digital flight deck experience.  PlaneView was built on the successful foundation of the Honeywell SPZ-8000 avionics series implementing the Primus Epic platform providing great situational awareness and data management possible.

According to Conklin & deDecker G450 performance statistics:

  • the “seats full” NBAA IFR Reserve range is 4,070 nautical miles,
  • the balanced field length is 5,578 feet,
  • the Part 91 landing field length is 2,650 feet, and
  • the normal cruise speed is 476 KTAS.

Please call us today to learn more about this incredible Gulfstream G450 and you can find full specifications, photographs and a video about this aircraft on our website at http://jetsales.com/jets/2008-gulfstream-g450-sn-4107/.

Mesinger Pulse – “Right Pricing, Wrong Offering”

There used to be a sentiment among sellers that if there are no buyers, why lower your price? That used to be a fair question in 2009. Today there are buyers, albeit mostly in North America. So that old adage is not a sound reason to not truly identify Right Pricing. As you look at the number of days on the market, most planes are approaching 180 days or even longer. I have never received a blue ribbon from anyone for having a plane on the market for most days! I can also tell you that when a seller says to me, “I have patience”, they are really saying they will be OK with taking less sooner than later. In a declining market, the longer you are on the market the less someone will pay you. It is simple, aircraft are a declining value asset.

What is Right Pricing? It is the price that sells the plane, simple as that. But getting there is not simple. I once ran a series of New Yorker-like cartoon ads. One of my favorite, which I am going to re-run soon, was of two well-dressed business men walking out of a conference room and over their shoulder you can see into the conference room and those around the table were throwing money in the air in what looked like a celebration. The caption says, “Do you think we left any money on the table?” Please do not mistake right pricing for leaving money on the table. It is not a dart at the wall. It is created by employing good solid research, including not just the reporting books or the listing services, but actual constant calls to brokers and sellers and buyers coupled with very detailed comp comparisons. It is not a vague overarching comparison, like just comparing a category of plane against the other with simple components of comparisons such as one age against the other or one total time against the other. It is a deep dive into each of the comps, breaking the planes up into their constituent parts, then assessing value. This will begin to give one the real comparative analysis to see what is really selling at what price and why.

We in our firm are beginning to see that right priced planes sell in days, not weeks and certainly not months. It is all about price. So, the answer is not that there are no buyers so don’t lower your price. The answer is there are no buyers at the wrong price. By the way, rather than lower your price once on the market, come to the market right priced to begin with. Sometimes that is not an easy sell for you to make to your seller and I said before it is not simple. They might say things to you like, “Well if it is a real buyer they will ignore your asking price and make you an offer regardless of a high ask.” Not true. Today buyers call those planes that appear to be right priced first and they may never get to yours!

So now let’s explore the other side of this, Wrong Offering. This occurs when a buyer comes to a market and believes they can just throw a dart at the wall. They ignore all the great research their aircraft professional provides. They just say if they are asking this offer that. Very frustrating when such hard work and market research has been accomplished. Usually after a few failed attempts at wrong offerings real buyers come around and make great buys. Remember the cartoon? Buyers as well as sellers are and should be sensitive to either over paying or selling too cheap. Today neither has to occur if good solid guidance is adhered to.

While I was writing this article, I had a broker call and say, “Hey is that Hawker still available?” I told him it was in a pre-buy and under contract. He said he figured so since it was so well priced. He then went on to say his buyer has gone silent since he has been calling him to advise that the airplane was priced right.. This also sounds familiar when one is working with a prospect that says they are a buyer, then a real buy comes along, and they either disappear or throw up a distraction.

Now back to the title of this important article, Right pricing, Wrong Offering. I assure you that if a plane is right priced to begin with or ultimately right priced, it will sell, and sell quickly. If a buyer proposes a wrong offer they will not be the buyer. It is so simple yet requires the utmost trust among your team. I promise for a buyer and seller to come together for a purchase there is no reason that either side will leave any money on the table. There is no cookie cutter formula, it is complex and based on the facts of the market. The leap of faith comes when the sales professional works to take the hand of the buyer or seller and guides them into the real world. The two key words today are trust and price. Or said even more directly, Trust the Price!

Mesinger Pulse – “Where Does An Aircraft Broker Add Value? Or Not!”

I promise this article is not meant to be self-serving but having been an aircraft broker for 43 years and interacting daily with other terrific professionals I do think it is a topic that is important and that I am capable of speaking about.

Aircraft sales professionals are hired by owners and sellers to successfully market and sell their aircraft. I compete in this arena daily. I, like many of you reading this, often lose a listing opportunity to others who might quote a lower price to perform the services, and/or overstate the value of the aircraft to be sold, or the combination of both. It reminds me a little of the Wizard of Oz. Behind the curtain the Wizard can claim anything. Of course, in practice promises do not always come true.

Everyone will promise hands on, out from behind their desk participation. Delivering on this is often a very different story. Let’s start at the beginning. Once your broker has signed up your listing do they actually travel to the aircraft with technical representation and start from scratch to build a current specification sheet? Do they really take the time to read all the logs and build what we call a site visit report? To us these elements are critical value adds and without them accurate representation will be next to impossible. I am finding more and more of my fellow brokers investing in full-time in-house technical personnel. We have had this component on staff with us full-time for over 20 years. There is no extra charge for this piece of our service but either working alone, or even better, with the sellers DOM magic occurs. Smart answers can be given to prospects and buyers. We hear too often from brokers that they have not actually ever seen the aircraft or the logs and records for planes they are representing. Many times, we will go see a plane on behalf of a buying client and are the first to really lay eyes on it, and more times than we would like, are disappointed with the findings.

Accurate pricing of the aircraft brings huge value to the seller because good solid pricing both in what to ask and what an accurate sale price will be means fewer days on the market. That is value! Having sellers try to impact the pricing discussion based on an amount owed on the plane or some misguided percentage of what was paid typically has no real bearing to the market today based on comps and recently sold intel. No question about the value added here by the broker and its research staff.

Aircraft showings are another place that real value can be added. Honestly, we like most of our counterparts, do not attend every showing of the aircraft. Very often a prospects pilot may just coincidentally be at an airport where an aircraft that is for sale is based and we get a call asking if they could stop by for a quick look. Sometimes a broker may go on a roadshow to look at perspective aircraft to build a list of aircraft to present to their buyer. In those pop-up cases, even we would ask the flight department to open the plane and show it. For all key showings, the broker should be on-site to sell the plane.

The pre-buy and closing functions are other obvious areas the broker should be hands on and on-site. The technical side of the brokerage firm should be at the aircraft movement to the pre-buy and input as well as key times during the inspection and rectification of discrepancies. Movement to the closing location and the actual closing are also very important times for the broker to be present to guide this final phase.

Let’s now talk a minute about how value is not added. This occurs when a broker suggests they have an exclusive listing on an aircraft and in fact really do not. Believe it or not this happens more often than any of us would like. This person that tries to wiggle in the middle will usual be the cause that a deal does not happen. They bring confusion and distractions to real buyers and sellers trying to make a deal. Offering price guidance to a buyer that is not really vetted by the seller is another way deals do not happen. One of the most problematic areas of non-value is the broker who really does not have the credible relationship with the aircraft and tries to craft a back-to- back deal. This can bring so many negative distractions and problems that deals seldom get done under this structure.

Bottom line, take the time to find a credible reputable broker. Ask probing questions, check references and be willing to pay an industry acceptable fee to the broker. Problems typically occur when a buyer or seller believes they can pay cut rate fees for full fare services. It never works. Then when the deal starts having problems the broker is blamed and our standing in the community suffers. If something is too good to be true it usually is and you get what you pay for!

Mesinger Pulse – “If It Were Easy…”

I was talking the other day with the Director of Maintenance for a client of ours. We had just completed a successful sale of a large-body aircraft for their group and we were dissecting the event. As all who are reading this know there are many identifiable parts and pieces to a transaction, including legal, operational considerations, and the aircraft. Even with the aircraft related pieces it all comes down to the people. As I always say, if it were easy, everyone would be doing it!

Is there something in the air? Is there something in the water? It seems transactions are tougher than ever, fraught with more roadblocks than ever and ultimately plagued by the people more than ever. Don’t get me wrong, I truly do not believe that the people get out of bed to just stir the pot and create problems. Is it lack of team leadership? Is it over reaching or people swimming out of their lanes? I am not sure. What I am sure about is that the deals are hard fought to get over the finish line, more than ever.

When there is an opportunity to sell and get engaged in a transaction, more than ever, people seem to hold their collective breath and holding one’s breath cannot last forever. Sooner than later you start to turn blue and the lack of air to the brain makes for hasty decisions. Here is my advice for all of the people involved:

First and foremost, don’t hold your breath. In fact, try to find a place in every day you are involved in a prospective transaction to step back. Recognize this is just an airplane deal. I have always said that at some point or points of every deal let go and see who else is holding on. There is no way anyone of us is strong enough to hold the entire deal together all by ourselves. As I alluded to a few paragraphs up, identify your specific role and duty in the transaction and then stay in your lane. Early in the transaction process as a buying or selling team pick the leader. Often that leader is the broker or consultant, but sometimes it is the aviation counsel. That does not mean that person makes all the decisions it just means that leader has all the information gathering responsibility and disseminates the relevant information back out to the rest of the team members.

Next, communicate the issues in real time. Don’t try to find ways to minimize or spin critical path data to the team, hoping to make bad news into good news or tainting an outcome. That only leads to items being overshadowed by fear rather than sorted out by facts. In fact, most areas of concern in a transaction can be sorted out without derailing the transaction. Conversely if everything becomes a fire drill both side’s principles soon get worn down and the enthusiasm that should accompany a transaction gets lost.

Another very important factor in a transaction is the usual and customary and practical side of the LOI and contracting phase. Often this gets lost in the emotion of the seller in feeling that someone is trying to steal their plane or buy it for wholesale. Even the buyer in today’s market can feel they are over paying in what they feel is a downward trending market. I always coach sellers to look at the certainty with equal eyes as you look at the price. What’s the difference if you think you are getting more than it is worth from a person who cannot really complete a deal and conversely if you are a buyer why not pay a little more if you find the perfect plane for you without having modifications on your dime?

Now remember ultimately no matter the actions of the people involved, if the aircraft sincerely has problems that make it not capable of meeting the delivery conditions contracted between the buyer and seller, then the deal will not work. This is typically the last reason a deal does not go through. It is less seldom about the airplane and more often about the individuals involved.

Be smart, be tolerant, be creative and be vigilant. Airplane deals are getting done. In fact, they are getting done more often than in many recent years especially in North America. So, as you approach the deals do it with eyes wide open. Don’t think a deal can get done if you try to hold it together all by yourself. Don’t think you can overcome a badly contracted deal once in the middle of it, and don’t think you can take on all of the verticals and horizontals by yourself which is often why people try to swim out of their individual lanes. Remember, if it were easy, everyone would be doing it.

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