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NBAA 2010 Wrap-Up

It has been a great show this year.  The general mood has been upbeat and I believe it has been successful for everyone who participated.  Last night at the 2010 Gala, NBAA helped raise more than $225,000 for the Corporate Angel Network (“CAN” – http://www.corpangelnetwork.org/).  Congratulations to NBAA and everyone who donated!  CAN is a great cause and this money will help the organization help children and adults with cancer get to treatment centers all over the country. 

On Tuesday, my father Jay Mesinger moderated an excellent panel discussion about business aviation in Asia and China.  The participants spoke to the opportunities and challenges that exist for business aviation in Asia and started to discuss steps to help advance the growth of our industry in the region.  It became evident, however, that the challenges are real, and not all of the solutions are in place.  This should be an area of continued attention and interest for our industry.  

On Wednesday, I participated in a panel discussion on Social Media in Business Aviation and it was a success.  The room was packed with people looking to learn how to incorporate social media into their corporate marketing and people who wanted to learn how to utilize the information disseminated through social media.  I think we were able to help many people feel less intimidated and more knowledgeable about utilizing social media for themselves and their organizations.     

During this week we were also able to connect several clients with vendors to facilitate future business and pre-purchase inspections. 

As you can see it has been a busy week, but a successful one.  Congratulations to everyone who has been here and to NBAA and our industry on a successful convention.  Here is to all of our continued success and business throughout the next year.

NBAA 2010 – Tax, Regulatory & Risk Management Conference – Update Day 2

I didn’t have a chance to write last night because I had to run right from the end of the tax conference to several evening events.  But, that doesn’t mean that I didn’t see some great presentations and learn some very important industry updates.  During the second day of the Tax, Regulatory & Risk Management Conference we saw presentations about: FAA Registration Issues, States Sales Tax, Importing and Exporting Aircraft and more.  The FAA Registration Issues and new requirement for all aircraft owners to re-register their aircraft during a scheduled window of time is critical to maintaining currency in your registration.  Letting your registration lapse can affect the perfection of liens, validity of your insurance and legal flight operations.  Please watch our blog for further and more detailed updates on this topic.

Additionally, David Grizzle, FAA Chief Counsel gave the keynote speech and did an excellent job.  In the beginning of his speech he quoted Wayne Gretzky when saying how he believes a good organization and/or process should work.  “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”  When you start a project, or in my case a negotiation, don’t just think about the moment, but think about the desired outcome.  David has clearly kept this in mind during his tenure to date with the FAA and as a result been successful in his career there.  I work to always think of the outcome (or where I want the puck to be) before I start something and I can tell you that it does make a positive difference!

Please don’t forget to attend Jay Mesinger’s presentation today: NBAA Business Aviation Update in Asia/China which will occur in Hall C Room 103 starting today, October 19th at 3:30PM.  I will also be presenting on the NBAA Social Media in Business Aviation panel discussion tomorrow, Wednesday, October 20th from 4 to 5PM in Hall B Room 312.  We hope to see you at our event!

NBAA 2010 A PRE-CONVENTION DAY IN ATLANTA

Hi to all from Atlanta, it is Monday, October 18th. Just getting the final touches complete for my conference tomorrow on Operating Business Aircraft in China/Asia. This will be a case study presented by Jeff Lee, Aviation Director of IBM. He will lay out a set of requirements as well as his perceived challenges to begin to operate aircraft in the region. Speaking to his challenges and requirements will be experts from the region as well as the United States. I think everyone attending will leave with a wealth of information to help you and your companies not feel like you are blazing a trail! The event is scheduled for Tuesday, October 19th at 3:30 pm and presentations end at 5 with discussions and Q & A’s till 6 pm. It is being held in Hall C, room 102.
Also today I will be attending an NBAA Press conference where they will announce the future plans for the associations involvement with trade shows in China. Should be very exciting news!
On a personal note, it is great to have my wife Sandra, sons Josh and Adam as well as our daughter Jessica attending the convention as well as the NBAA Tax Conference. Makes for really great family discussions around the dinner table! Also here this week is Adam’s wife Ayeisha.
Many great events as well as chances to see old friends and make new ones as our collective industry dusts itself off and gets back to business. More tomorrow!

NBAA 2010 – Tax, Regulatory & Risk Management Conference – Update Day 1

Today was the first day of the Tax, Regulatory & Risk Management Conference and the first day of events for the National Business Aviation Association’s 2010 Annual Convention in Atlanta, GA.  The mood is upbeat and I believe the convention is supposed to be well attended.  The actual NBAA Convention won’t open until Tuesday morning, but various events started today including the 2010 Tax, Regulatory & Risk Management Conference of which I attended with my brother Adam Mesinger and my sister Jessica Johnson, a tax attorney.

I have been to the tax conference before, but it is good to get updates on current regulations and issues.  We saw several great presentations about topics including: basic FAR 91 & 135 issues, Excise Taxes, Personal Use of Business Aircraft, Entertainment Disallowances, Insurance Issues, Aircraft Leases (Rules & Tax Consequences) and Avoiding and Surviving an IRS Audit.  There were several times during the presentations where I thought about current projects that we are working on and how the topic raised new questions or provided relevant thoughts that I will discuss with our clients.  I also saw several old industry friends and made some new great contacts. 

Later in the week my father Jay Mesinger will be moderating a discussion about business aviation in Asia/China (Tuesday, October 19th from 3:30 to 5PM in Hall C Room 102).  And, I will be participating in a panel discussion about Social Media in business aviation (Wednesday, October 20th from 4:00 to 5:00PM in Hall B Room 312).  If you’re in Atlanta this week I hope that you can join us for our respective presentations.  I am proud to be here with my family as part of a successful family business.  This should be a great week and I believe that NBAA 2010 is a successful one for our industry!

Emerging Market Relationships

This past week I was in Abu Dhabi, UAE. We have been working for several years to develop solid relationships in many of the emerging markets and we so greatly appreciate the help of friends around the world who have so generously made introductions. This activity and our continued investment in building the relationships is really starting to pay off. I must say, these new markets are extremely relationship oriented. There is no such thing as just swooping in to emerging markets and laying claim to new business. They take a solid investment of time and money. Many trips and continued involvement and follow up are paramount to the relationship development that it takes to really say, “We are doing business in these areas of the world”. Of course everyone can say as they advertise aircraft in publications which have global distribution that their advertising reaches the four corners of the world. The internet also gives each of our inventory offerings a global reach, but it is the real relationships in these markets that really allow for the bragging rights. So I thought I would brag a bit! 

We were just given an exclusive listing on a fabulous GIV-SP, S/N 1381. This is a great 1999 model Gulfstream that is being operated in Abu Dhabi, UAE. It is on a commercial certificate which is equivalent to U.S. 135 charter operations. This aircraft has low time with only 2,983 airframe hours and 359 hours since mid-life inspections on each engine. The records are impeccable and shop visits have primarily been performed at Jet Aviation Basel, Gulfstream Savannah and Gulfstream Las Vegas. The engines went to Rolls Royce for the mid-life inspections. It is JAR-OPs and EASA approved giving it great operating entrée to be based anywhere in the world for global operations. It is a truly executive VVIP interior with large quarters in the rear of the aircraft for executive work and sleeping. Now that I have returned from the Middle East, I am putting the entire marketing package together and will be ready next week to send it out to prospects for review.  In the meantime, please feel free to call or email me for more specifics.

Overwhelming Options

In today’s corporate aircraft market there is so much available inventory at relatively low prices that it can be overwhelming for a buyer.  I get calls regularly from potential buyers who ask about large body aircraft because the initial capital cost isn’t much (if any) greater than a mid-size.  It quickly becomes clear, however, that a small or mid-size aircraft will best fulfill their mission.  They also often aren’t ready for the operating and maintenance costs required by the large body (often older) aircraft.

We have always worked to help our acquisition clients evaluate detailed mission profile analysis to identify the aircraft that will best fulfill their mission requirements.  In the end we repeatedly find that when an owner has an aircraft that best fulfills their mission and they buy based on accurate operating cost expectations the ownership experience is the most successful.  Today, with a seemingly endless supply of aircraft under $10,000,000 it becomes more challenging than ever to stay focused.  If you do, and you buy with an eye towards both capital and operating costs, I assure you that your experience will be positive.  Don’t get distracted by bigger just because you can buy it.  Buy an aircraft because it best fulfills your mission and you have accurate expectations and then use it and enjoy it.

Part 6: It’s All Coming Together

This article is the sixth in a continuing series.                                                                                                                                                                                                         A Career Change: Learning the Aircraft Brokerage Business part 1, part 2, part 3, part 4, part 5

As I sit at my desk, every day, in a new city at a new job, I realize I really did change careers!  It is a complete 180 from Hollywood, but I have hardly looked in my rearview mirror since making the decision.  The hardest part of the whole move was leaving friends and my wife’s family, but the decision to learn an entirely new industry feels like the absolute right one.  They say the average person these days could go through 4 or 5 career changes in their lifetime.  I hope I only have two.  The idea of working with family can probably freak some people out, but the family business is at the heart of the American dream.  It is a special thing to be able to work with your family during the day, with all of the challenges that can arise and then leave work behind to spend time as a family at night.  Although if you ask my Dad he would quote an ad we had once that said, “Businesses have hours of operation, families do not”.  So to be truthful we tend to often drift back into airplane talk even at dinner.  I am amazed at my family’s ability do that day in and day out.  It is a feeling and reality that I had not understood as much before joining them at J. Mesinger. 

So enough about working with family, the real question on everybody’s mind is how and what am I doing to learn this industry.  For one, I am reading and studying all of our great industry publications.  There are many that we receive at the office that I can take home and read at night or the weekends.  They offer airplane comparisons, articles about technological upgrades and innovations, cost analysis and articles written by leaders of the industry about the business of corporate and private aviation.  I am also doing market research, calling all of the brokers representing all of the planes in a specific market.  This research allows me to compare different aircraft on the market and understand real value differences between them so we can help our clients value their aircraft or know which plane to go after  and what to pay if they are buying.  It also gives me an opportunity to get to know the other brokers in the industry and introduce myself to them.

I am also helping to work on big cost analysis projects that help our acquisition clients understand all of the expenses that will be incurred in a five year projection.  These are very detailed comparisons. This work is time consuming, but also completely rewarding as it results in an amazing product providing clients with information they can wrap their arms around and use to enter the acquisition and ownership experience with eyes wide open. 

I hope to soon write articles about the world of business aviation, and not just about my career change.  My advice, however, to anyone thinking of such a change or entering a new field altogether would be, you cannot be afraid to be open and accepting to new opportunities as they present themselves to you in life.  I am learning this business and doing new things every day.  I am being trained by family that wants me to know everything they know, which is not always the case for people in the work environment.  I am happy about my choice and looking forward to the continued growth and understanding of the airplane business.  If you have any questions for me or would like me to write about a specific topic or aspect of my learning process, just respond to my blog and I will try my best to address your suggestion.  Otherwise I will keep writing as the topics arise.

Accurate Expectations

We often receive calls from potential buyers about aircraft we are selling or to discuss our acquisition services.  Many of them believe that charter revenue can pay for their use of the aircraft.  Other times we hear from disenfranchised owners who want to sell because the actual cost to own and operate their aircraft far exceeds what they initially expected before they bought.  Unfortunately, you can’t earn enough through charter to pay for all of your own use, but only offset the total cost of ownership.  And, aircraft are expensive to own, operate and maintain.  

When we work with buyers (half of our total business) we work hard to establish accurate expectations before we really start. In conjunction with our clients, their financial advisors, tax consultants and aviation attorneys we build detailed budgets.  We work to understand what kind of future maintenance, refurbishment and upgrades specific aircraft will require over the course of our client’s ownership.  We complete thorough due diligence on the aircraft we are pursuing before our clients ever send an aircraft to a pre-purchase inspection.  We are committed to making sure that our clients start a project eyes wide-open. 

Buyers need to understand the total cost, tax ramifications and process of owning, operating and maintaining prior to buying.  And, if someone goes into the process with accurate expectations and good information then owning and operating a corporate aircraft will be a positive experience.  So, I am writing this blog post as a warning to ask good questions and build a team of experts to help you establish accurate expectations before you buy.  Then, step in, complete your acquisition and enjoy your aircraft and the experience.

Part 5: Aviation Community Outreach

This article is the fifth in a continuing series.
A Career Change: Learning the Aircraft Brokerage Business part 1, part 2, part 3, part 4

Part of my job, which is very interesting, is finding aviation blogs and other discussions happening online, that we here at J. Mesinger can become involved in.  We want to either participate on the blog site or at least post responses to articles that we have insight on.  By doing this we are exposing ourselves to new markets and potential clients, and hopefully driving people to our website.  Below is a response I wrote to an article by Aviation Business Consultants, that I came across through my LinkedIn account and NBAA group membership:

The Future of Magazines and What it Means for Aviation Marketing

What is an aviation company to do these days?  At J. Mesinger Corporate Jet Sales, we are strong believers in print advertising,   but in today’s internet age we have to always evaluate the effectiveness of those marketing efforts and combine them with online opportunities to reach the largest audience possible.  Like the article by ABCI mentioned, we have to see where print circulation is still worth our effort and where it is not.  And when we find it is not, we are moving our ad dollars elsewhere.  Our company’s blog at www.jetsales.com/blog is paying off for us with new subscribers and hits to our website.  We still, however, see great value in print, both domestically and internationally.  Lately we have been fortunate to be a part of many international publications, such as Global Flying in China and Top Flight in Russia and the premiere edition of Jet Gala out of Singapore.  These are all beautiful publications that expand our recognition to the farthest points of the globe, and also give us the opportunity to market our client’s aircrafts all around the world.  All of the content in these magazines are either online now, or the publications are investing in building up their online content going forward, but for us to leave print all together at this point would be to miss out on many opportunities of exposure to our market.  One good example of the niche magazines still have a hold on is when a pilot sees an industry magazine at an FBO and puts it on a plane for an owner or passenger to read.  It would be a shame to miss out on that kind of exposure, because we make it a priority to use ads in magazines for corporate branding and inventory listings, and we receive great response from those efforts.  In addition, my father, Jay is often asked to write articles for the industry magazines worldwide.  I believe that with the iPad and other ebook readers, however, industry magazines have the opportunity now to offer their content in far more dynamic and interactive ways, and I am excited to see how things evolve with the times!

The Value Zone

The prices in most of our aircraft markets have settled at a bottom where buyers could recognize value and have confidence that the free fall of prices had ended.  The result has been that aircraft have been selling again since the beginning of this year.  There are a few make/model markets, however, that have been slower to find a footing.

Several months ago I told a few clients for whom we had very limited activity on their aircraft that there were either no buyers at any price or all of the aircraft in their respective category were still significantly overpriced.  None of the other sellers in the same make/model segments were experiencing any activity either and none of the aircraft were selling.  It is a hard conversation to have when there are no real data points to look to when trying to reprice a market.  At the same time, I have seen the same consistent phenomenon throughout this downturn.  And over just the last few weeks, as many of the sellers in those respective markets have reduced their prices (including our clients), many of these aircraft have gone under contract (and we have significantly increased activity on our listings).

There are still many hardships in our industry, limited aircraft financing being one of the biggest, however, when prices are right, there are some buyers.  The consistent phenomenon is that once buyers recognize the right value, they step in.  Until the prices in a specific make/model category reach that value zone, the buyers stay away from the respective market. This isn’t about just selling at low prices.   This is about finding the right value zone where amongst the global fleet of aircraft of all makes and models, certain make/model markets should be priced to demonstrate appropriate value against the competitive markets.

As I said at the beginning of this post, most make/model markets are already in the right zone and aircraft have been selling again.  It is only a few holdout make/model markets that are finally finding their footing.  And, finding it is making all of the difference!

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