Mesinger Pulse: Market-maker vs. Marketplace

Originally published as a blog for AINsight for Aviation International News on 8/7/20

As we are all lamenting as we write and speak and have client conversations that we are in a very strange time. Some might even say they are flying blind with respect to values and activity today and in the future. Actually, I am not willing to go there. I absolutely do not believe we are flying blind. I firmly believe that values and activity can be pegged.

There is no doubt that we as a country and world at large do no fully comprehend where the right-hand bracket on COVID is yet, however I refuse to close my eyes and allow myself to just bump into unidentified circumstances while flying blind.

At our company we are working hard each day along with many of my fellow aircraft professionals to have our eyes wide open and shape the future rather than being shaped by this phenomenon. I do not mean even for a moment to suggest that this is not a terrible pandemic that we are all working to survive. I do mean that there is something very powerful that we can all be doing. It has never been more important to speak factually, do not perpetuate rumors, and be leaders.

For us this translates into not focusing on being Market Makers, but instead putting all of our energy into building a vibrant and robust Marketplace. The difference is huge. The Market Maker is often discussed when talking about stocks and other commodities that are purchased for resale and profit. I am much more excited to be a part of creating a marketplace. That is the environment that promotes, markets and builds solid markets for the aircraft we all have for sale. This marketplace fosters right pricing, right representation and right dialog around the offerings.

I believe the key to keeping values up and reducing large residual loss rates is embedded in the ability to compare and value different pieces of the aircraft. Setting the correct value adds for pedigree, operational history, location of the aircraft, as well as number of owners. Promoting the quality of the records and the maintenance performed on the aircraft.

We must not be dragged down into a discussion about how bad the virus is and therefore how low prices must go. We must certainly allow for that honest discussion but we must be stewards of our marketplace and keep the high value of safe efficient travel first and foremost. It might be that the mix of use may change during this pandemic, possibly less international travel and a higher component of domestic flying, but flying is flying and whatever keeps these planes in the air is positive and strengthens our marketplace. So while the idea of being a market maker may seem more difficult today, the idea of working together as an industry to build and support and strengthen our marketplace should be enough to have us all open our eyes and abandon the idea that any of us have to fly blindly through this period.