Several articles were written as the year drew to a close, which positioned themselves as being the guiding light for going forward into 2019. Would there continue to be strong demand? Would prices remain firm based on limited supply against the strong demand? Will North America continue to be the leader in transactional activity? All great questions that are often best answered with a crystal ball and non-industry related input rather than trend-based data.
What makes this industry so difficult to predict? Seems there would be plenty of markers to lay out a road map. Our industry is vital to so many corporations and individuals looking to maximize their time and productivity, however, it is susceptible to so many external factors. Global economic activity, oil prices, stock market fluctuations and interest rates. Internally the aviation industry, unlike real estate, faces a lack of transparency related to sale prices, which makes pricing challenging. We do not have a recordation body that accurately captures selling prices which could add stability to our values. Instead it is a relationship business and we are left to extrapolate value based on anecdotal data and personal real-world experience with our own transactions. In our company we work very hard to provide an accurate and sophisticated analysis of an aircraft’s value, including historical data, recent sales information and detailed side-by-side comparisons.
These questions are also why industry gatherings are so vital and I am looking so forward to the one taking place in London next week sponsored by Corporate Jet Investor. It is always great to have the opportunity to get the best and brightest minds together for a couple of days of sharing, collaborating and conceptualizing on the near-term and long-term future of the industry. This gathering in particular, being held in Europe, not only brings many of those from North America together but also the rest of the world. In the two days of panels and speakers each of us is provided rare access to each other, our expertise and each other’s visions.
This is one of many events that take place regionally, globally and locally. NBAA Regional Forums are another set of venues designed to inform and enlighten its participants. Programming at these events typically will include topics on lending, registering, importing, tax and myriad of other relevant topics. In many ways our industry is one of the most unsophisticated sophisticated industries. Not in the area of important gathering events. In this our industry shines.
These events always provide a healthy mix of social and educational scheduling. I know that attending these can be costly and hard to always prioritize into our annual budgets. I must say that reevaluating the expense should be a priority for everyone in 2019. Do not underestimate the real value add of gathering with the best and brightest of your industry peers. Face-to-face discussion and even disagreements about positions create healthy dialog that can leave each participant in the discussion better informed and often more open to the other side of the issue.
Getting access to the manufacturers and meeting them in person can create new friendships that when used correctly going forward will make you even more valuable to your clients as you work your individual transactions. Being able to say to your customer, if stuck in a deal with what may seem like an immovable position, that you may be able to find resolution by being able to simply pick up the phone and call your new friend for help. This is not just a phenomenon that can be helpful from the manufacturer but also with legal log jams or tax questions or broader lending opportunities. Good old fashion networking.
I am sure that once home from the Corporate Jet Investor conference this month and having listened to and socialized with this esteemed group I will be better prepared to answer how 2019 will be. Will demand remain strong? Will prices remain firm? No matter the intelligence gathered we must all always be vigilant to external factors that affect not just our industry but the entire global economy. This global connectedness has never been so reliant on each integral piece of the puzzle.
I always say that until I have wished you Happy New Year it is not too late to still do that. So, Happy New Year and I wish us all continued success and strong friendships and strong learning platforms. I look forward to seeing many of you at one gathering or the other someplace in the world or your neighborhood soon.