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.