Articles - Mesinger Jet Sales

Mesinger Pulse: Get Out of Your Head and Into the Market

Originally published as a News story for Corporate Jet Investor on 5/3/24

As a former childhood magician, I’m often reminded of a story about Harry Houdini, the world’s most renowned magician and escape artist.

Houdini was once performing an escape stunt at a maximum-security prison, where he was tasked with escaping from one of the cells. He worked and worked to pick the lock, and his time to perform the escape was running out. His exhaustion was increasing and the sweat was pouring down his forehead. Finally, after hours of unsuccessfully trying to pick the lock and escape, he fell forward with fatigue against the door, and it just pushed open. You see, the door was not ever actually locked, except for in his mind. He had to get out of his head and see the door for what it always was: unlocked.

I’ve recently been to several aviation events and continued to host webinars, and I’m always interested in the perspectives of the participants. Many have been saying that their business activity is down this year, and others are predicting a downturn. It is not unnatural for election years to create brief periods of uncertainty and create a bit of fence-sitting from operators. After all, the one thing that financial markets do not like is uncertainty. Geopolitical events, inflation, and undoubtedly, presidential elections can drive this feeling. However, if you look at this year’s election slate, neither side really has a better or worse attitude towards aviation and the use of private jets to accomplish growth in business. So, without getting political, neither side should create havoc for our use of business aircraft.

Sure, depreciation may be treated a bit differently, tax treatments may be a bit different, but no one wants to do away with using the aircraft. Is business down or headed there? Sometimes business begins to resemble what you say or think it is. But that can work both ways. You can certainly work less hard and create an outcome based on that, or you can work twice as hard and build at times what others say is impossible. No doubt, this is an unusual time in our economic world. It is a period of unease on many levels. One way we as an industry can overcome this is to talk about the certainty of our industry. We know for sure that business aviation creates business opportunities. We know for certain we operate in a very safe and efficient environment. We know for certain that our markets are stable and less frenzied than what we experienced during the pandemic and through much of 2023.

You see, there is much to talk about to help those sitting on the fence step off and those who are predicting doom and gloom to redirect their uncertainty. Our market seems strong to me. Our company, like many of my friends who I speak to daily, reports 2024 could be one of their best years. So as always, one could sit back and rely on what might seem like an uncertain period, or you could act and be ready for the best year your company has ever experienced. Frankly, I like the latter myself! It can get so easy to shake your head up and down as you listen to others talk about markets and business being down. It is more difficult to work harder, smarter and longer. You have to get out of your head and into the reality of the market we are enjoying.

This is my first article to be published in the Corporate Jet Investor. I am so proud of this new home for the Mesinger Pulse. We will be published on the first Friday of each month going forward. Thanks for reading!

Mesinger Pulse: The Power of Thought Leadership

2/2/24

As I have always said, we are not in the aviation business, we are in the people business. People selling people business aircraft, people fixing people’s aircraft, and so on. I had the privilege this week of hosting an NBAA News Hour webinar that was targeted at actually seeing ourselves in 2024 rather than just guessing about the year from the perspective of 2023. Obviously, we are early in it; however, we have some great indicators already.

On the panel were several of the best thought leaders in the industry—all professionals I am proud to call my friends: Vivek Kaushal, CEO of Global Jet Capital; Rollie Vincent, president of Rolland Vincent Associates; and Alasdair Whyte, co-founder of Corporate Jet Investor. This group really hit the industry nail on the head.

Vivek was able to help us define the current, as well as the previous year’s, market for financing, as well as appetite for capital investments. The conversation started by reviewing 2023 and labeling it a relatively tough year. Some of the problems with the year revolved around the rising rate environment due to the fed cycle, which created a mini crisis in the banking sector.

He spoke of what he believes will be an easing of this cycle and the opening of better rate markets, which will strengthen the financing climate in 2024. Rollie added that we are getting regular GDP reports—including this last much more positive one—that will also lead to a better environment for business aviation in 2024. It is actually happening rather than being predicted.

Rollie then went on to answer an audience question about the current values of airplanes being well above trend. He commented that, while aircraft prices and values for pedigreed aircraft are holding quite firm, there is a clear shift back to more normalized rates of annual depreciation, which has helped to take some of the froth out of the market. Getting PPI slots has become less challenging, but scheduling and orchestrating maintenance, repairs, and overhauls can still be difficult, reflecting the realities that MRO shops are facing worldwide in attracting and retaining qualified A&P talent. Aircraft values are holding up fairly well despite the fact that inventories are on the rise, up significantly to 7 percent more of the fleet overall, from record lows in 2022.

We spoke a bit about consolidation within our industry, and Alasdair commented on the fact that capital is more readily available and, with interest rates both easing a bit and predicted to continue that easing this year, we could see more consolidation taking place. This will be a positive phenomenon for our industry.

Alasdair went on to discuss companies like Vista Jet that have been in the news of late. His take was again a positive one, comparing Vista to an airline that has built its business model with a large amount of debt as standard in the airline industry. He wanted to remind us they also have a large amount of cash. He felt very good about the future of the company.

With respect to charter and jet card use softening a bit, everyone believed this was not a bad thing for our industry but in fact a good example of right-sizing. The cost coming down a bit for these services was also reflective of the need for a bit more of a competitive position for the providers.

As we as an industry move through the year, it is so positive that we have such great opportunities to enlighten ourselves, with tools like AINalerts and other AIN publications; NBAA regional forums and BACE events; CJI events; and other group gathering opportunities. I encourage each of you to take out your individual calendars to include at least one, if not more, of these gatherings. These will help you tap into the thought leadership of our industry.

Mesinger Pulse: No Reason Not to Shout Hooray!

1/5/24

First and foremost, I want to wish you and your families a Happy Healthy New Year! We can now officially stop guessing about potential headwinds for 2024 and begin the actual business of the new year. Headwinds are always there, year after year, and always a bit unpredictable. The economy, the election year woes, the geopolitical events, and on and on. Everybody writes about those. I thought it would be more productive to talk about why we should be positive about the year past, the one ahead, and shout hooray and how we can collectively keep that sentiment up.

I can speak to a successful 2023 that most of you reading this can agree to as well. Sure, for many, the number of transactions may have been down a bit from previous years but dissecting that statement may seem contrary to the facts of 2023. After all, inventory was up, so there were more choices for buyers. Prices began to soften a bit from pandemic highs, so there was more incentive to not sit on the fence. So, the supply side of our industry had a positive spin to it.

Of course, we all continued to feel and suffer from the supply side of deliverables. Longer lead times for goods and inspection slots were real and may still plague us into this next year. We began to learn how to not feel as impacted by the difficulty of finding inspection slots as we had in 2022 and some of 2023. At our company, we did not get any better at taking NO for an answer. We just got more focused on thinking outside the box about locations available to inspect. All the major and independent maintenance facilities added square footage to inspect and worked diligently to increase labor resources and even move those resources around to their different facilities to keep opportunities opening more frequently.

From our perspective although transactions never seem to get easier,  they do bring about better outcomes when the frenzy of the transaction tempers down a bit. I had the privilege to speak at several industry events and took the time at each one to talk with more participants than usual. Everyone I spoke with said hooray as they recounted the year just past. They all felt a need to list many of the successes they enjoyed and how they took from each one a bit more wisdom to bring to the next one.

After all, wisdom and passion are what we have to pull forward to the next transaction or customer interaction. These two hallmarks of success shape each one of us. Believe me, your customers and coworkers recognize these traits and will strive to align themselves with you while they work to find ways to achieve success together.

It seems that regardless of the headwind it is the tailwind that more accurately impacts what goes on for each of us. So now, let’s go back to the title of this article. Regardless of whether you are really shouting hooray or just carrying a smile and swagger in your step, the sentiment shows and is infectious. People come to know you for that attitude. 2024 is each of ours year. It is ours to grab and hold on to. It is our best line of defense for a headwind. It reminds me of going for a walk on a windy day. Walk in one direction and you encounter headwinds but turn the corner and you get the boost from a tailwind. It comes down to direction. Constantly walking through headwinds can be exhausting. After a while, turn around and enjoy the boost.

I look forward to seeing and talking to many of you and changing directions often to capture the wind! Hooray!

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