Articles - Mesinger Jet Sales

Mesinger Pulse: The Power of Thought Leadership

Originally published as a blog for AINsight for Aviation International News on 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.

NBAA News Hour – Thought Leadership Webinar: Keeping It Real

Moderated By: Jay Mesinger, Mesinger Jet Sales; Speakers include: Vivek Kaushal, Global Jet Capital; Rolland Vincent, Rolland Vincent Associates, LLC; Alasdair Whyte, Corporate Jet Investor

Join some of the industry’s brightest thought leaders who will ring in 2024 with their expectations for business aviation. Learn how 2024 will be shaped by previous years’ sales, the upcoming election season and OEM book-to-build ratios. Lively discussions with the panel will also include financing and the effects of interest rates, price movement and stability or lack thereof in the market. Attending this webinar should be one of your first New Year’s resolutions!

Sponsored by NBAA Leadership Council member, Mesinger Jet Sales.

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Mesinger Pulse: No Reason Not to Shout Hooray!

Originally published as a blog for AINsight for Aviation International News on 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!

Mesinger Pulse: I Can Almost See The New Year

Originally published as a blog for AINsight for Aviation International News on 12/1/23

There are so many signs that it’s that time of year. Fireplace chimneys smoking, commercials on television playing Christmas music, and department stores setting up the Santa area for kids to whisper in Santa’s ear what they hope to have under the tree on Christmas morning. From my vantage point, I can almost see the new year by the drop off of calls from people who are trying to capture a year-end transaction. Sure, I am still getting some, even as recently as last Friday looking for an opportunity. But most people are thinking about next year rather than this year.

This has been a very good year on many fronts. The transactions have been less frenzied and the balance in our market seems to be returning. Inventory levels are increasing, signaling the balance is here to stay (for a while). Days on the market are lengthening. This gives the buyers more choice and success in negotiating for better pricing rather than just having a yes or no answer from a seller. Don’t misunderstand, prices are not dropping off a cliff. They are gently floating down a bit. This gives sellers the ability to not feel they are in a fire sale and buyers a bit of confidence they are not in a bidding war. Both sides are winning.

As I look out over the horizon into next year, I see what mirrors the start of 2023. A bit of a slow start to the transactions in the first quarter. This momentary slowdown will afford those buyers who can wait opportunities that may be a bit better than the 4th quarter of 2023. Buyers will have time to scour the market and find the best opportunities. The seller may feel a bit panicked, but this feeling should not last since the market should pick up steam as the second quarter begins.

Remember, 2024 is an election year. This always takes a few buyers to the fence to await the outcome. I have always felt that those prospects that say they must wait until the election is over to decide if they would buy or not are always looking for a fence to sit on to delay the buying decision. After all, regardless of who wins, our country tends to move along and promote the need for business aviation. One must still get out ahead of their competition and in front of their clients.

I think we can expect continued strong book-to-build ratios from the manufacturers. As an industry, we have a terrific line-up of products being delivered. I would expect the supply chain problems to continue to ease. Already in many segments, I see this matriculation moving in our favor. I anticipate pre-buy slot opportunities being freed up with more regularity. Paint and upgrade slots should also be more readily available. All in all, doing business in the business aviation space is shifting in the direction of the consumer.

2024 will bring another productive year of trade shows and gathering venues. NBAA, CJI, and others are lining up with full slates of domestic and global events. Now that the pandemic is in the rearview mirror, crowds are less scary and attendance at all events is on the rise.

Doing business in aviation has always provided for those of us who make our living in this industry and 2024 should be no different. Thank you all for being such great readers of my articles and aviation supporters. Happy Holidays and Happy New Year to you all!

Mesinger Pulse: Pedigree is Foundation for Business Aircraft

Originally published as a blog for AINsight for Aviation International News on 11/3/23

When our daughters or sons bring home a new significant other, we look them up and down and then start a line of questioning: “So, tell us about yourself?” On and on with the hope of learning if your child has found the right partner. Is this newfound relationship going to be a solid partner? The pedigree or foundation is fundamental to anything one wants to become associated with. It could be a house, a building, or a business. Will it be a good fit? Will it add value to your portfolio? Is it resaleable? Can it enhance your asset base?

Now let’s talk about how the last few years might have taken the eye off the pedigree ball and what this might become as a differentiating factor going forward for our fleet of aircraft. When prospects hire us to acquire an aircraft, we set up very rigid criteria for the search. It always starts with pedigree. Who owns it? Has the owner provided for the best maintenance and operational excellence? How many owners has the plane had and do they all represent high quality people and operations? Next of course, we dig deeper into the maintenance and the history. Has there been any damage and to what severity? A further hard look at repairs and any non-standard reoccurring inspections because of the repairs. Where in the world was the plane operated? On and on with questions that help us differentiate the good ones from the mediocre ones, and even the must stay away from ones.

I know you all must be saying I am preaching to the choir by now. Why drive so deep into areas you must all know? Well, here comes the twist! Starting with the pandemic and the surge of first-time buyers who seemed all bent on capturing 100% bonus depreciation, our available inventory was worn totally thin. In fact, often there would only be one or none of a specific category of plane on the market. Feeding frenzies ensued. Bidding wars and price escalations were the norm. But here is one more thing that became the norm. A shift away from the basic hard questions that should have been asked and whose answers should have been a guide. Foundation, history, operational history, and repair history. Buyers were so desperate to get a plane bought even if it did not quite meet the mission or check all the boxes. The priority for many shifted to just buying a plane. I began to hear questions like, “Are third world countries so bad to buy from?” “Was that damage really that bad?” “Is an engine program really that important?” “So what if it was not a recognizable past owner?”

Many critical questions were overlooked and the idea of the plane being able to close and provide the buyer with the depreciation seemed all that mattered. So, what happens next to these planes? One day they will come back on the market and those planes that were purchased that could not check all the boxes concerning pedigree and history will start to stand out less positively than those whose boxes were checked with the right answers. Values may begin to separate, and the cream will rise to the top. Those buyers who ignored the right questions and the right answers may find that there was a cost to that path. Those that asked all the right questions and respected the answers even if it meant not buying at that moment, but waiting for the boxes to be checked, will be rewarded with the added value that comes with patience as well as all the right due diligence.

NBAA Thought Leadership Webinar: Ears to the Ground at 2023 NBAA-BACE.

Moderated By: Jay Mesinger, Mesinger Jet Sales; Speakers include: Ed Bolen, NBAA; Pete Bunce, General Aviation Manufacturers Association and Wayne Starling, International Aircraft Dealers Association

What were the loudest rumblings from last week’s 2023 NBAA Business Aviation Convention & Exhibition (NBAA-BACE)? This session will help you prioritize the many challenges that face our industry, and evaluate solutions proposed by the thought leaders who attended the event. We have the most distinguished group of panelists to address the rumblings, as well as shape the solutions for our industry.

Sponsored by NBAA Leadership Council member, Mesinger Jet Sales.

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Mesinger Pulse – Only 10 Days Away From Our Industry Celebration – NBAA-BACE

Originally published as a blog for AINsight for Aviation International News on 10/6/23

Aside from getting our best celebration wardrobes pressed and shined, how are you getting ready for this wonderful event? At our company, we are making a list and checking it twice. Picking up the phones and making the key calls to industry players and thought leaders to be sure we have time carved out to meet and reacquaint ourselves with friends and business associates.

There are so many opportunities to shape not just the rest of our year, but in fact, years to come. There are challenges to find solutions to, as well as business opportunities to shape and nurture. I know I personally have so many questions to ask those I meet up with and hope to be asked important questions by those that come up to me and my team at the event.

While reviewing my recent webinar topics and articles, I have looked at those topics that might be at the top of the minds of the attendees as well as readers. Using these topics, we are building the thought leader list of people we want to talk to in Vegas. It would be a shame to come home from this event without answers and solutions to the most troubling scenarios we are all talking about.

Pilot recruitment and retention are critical to clients who are either first-time buyers or transition clients who cannot be without these vital team members but are hampered by the time to get in the air based on long lead times for training slots. Of course, contract pilots can help on a short-term basis however, they are not long-term solutions. I hope to be eye to eye with the major training facilities as well as contract pilot providers to seek out solutions to speed up the Inservice timeline with respect to training.

Another relevant topic on everybody’s mind is the longer than usual time to schedule and begin prebuys at inspection facilities. How are the MRO’s and facilities working behind the scenes to shorten this? Can we get creative about tying up slots when we first put planes on the market rather than waiting to get a deal to begin to find a slot? This solution will take a concerted effort of all involved, the sellers, buyers, MRO’s, and technical personnel.

Here’s another one that catches the attention of us all, obsolescence of avionic vis-a-vis the entire category of the aging aircraft. This year we will be talking to as many providers as we can to best understand the reality of repair opportunities as well as the shelf supplies of these problematic systems, monitors, and cabin management switching to name a few.

These are just a few thoughts to get your own set of questions built and your own important list of meetings to set. There is no shortage of areas of concern to address. There are also real celebrations to be had at the event. Hugs, hellos, and catching up. Smiles and pats on the back. I am sure we will also use this time to remember people we have lost this past year. Even those remembrances can be joyous. Our company is going en masse and will spread out to say as many hellos as possible. We hope to come home enlightened and educated. Look forward to seeing you all there.

NBAA News Hour: Focusing on the Last Bit of 2023 – Headwinds, Tailwinds & Managing Our Success.

Moderated By: Jay Mesinger of Mesinger Jet Sales; Speakers include: Chad Anderson of Jetcraft; Jeff Lake of Duncan Aviation and Mike Menard of Bombardier

What can keep us on track for an amazing, balanced year, and what can derail us? Are there obstacles we as an industry can manage? Who would be our best thought leaders in this challenge? Join Jay Mesinger and an esteemed panel of guests to discuss the tailwinds and the headwinds of 2023.

Sponsored by NBAA Leadership Council member, Mesinger Jet Sales.

Proud member of NBAA’s Leadership Council

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Mesinger Pulse – What Bothers You Most?

Originally published as a blog for AINsight for Aviation International News on 9/1/23

Like most of you, I spend my day on the phone speaking with prospects, buyers, sellers, lenders, and aviation attorneys. Everyone I speak with has a pet peeve to mention or a troublesome event that happened recently. I will say though, that in these conversations, the overall attitude towards the industry and more specifically the market is far better in 2023 than in the proceeding couple of years. Everyone agrees that it is a far less frenzied space and more inviting for all to join in.

So, with all the joy, what is bothering people? Clearly, the idea of finding a timely pre-buy location to keep a transaction moving forward tops the list for many. It is so difficult to put a buyer and seller together, joined in a contract, and then wait up to a month or more to begin an inspection. The delay brings up another concern. During this protracted time, is it okay for the seller to continue to fly their plane? Typically, the idea of a seller not flying once under contract was not a burden to the seller as the time between finishing a contract and going to pre-buy may have only been a week.

Another problem we experience and hear about from others is the vulnerability of transactions getting completed in a timeline that the hard-fought contract was stipulating. Not only is the start time of the pre-buy a constant source of irritation to all sides, but once begun, the completion of the pre-buy always seems to take longer and bring about problematic issues for all sides. Supply chain issues, labor issues, and regulatory issues cause delays that keep all sides guessing. Uncertainty is always difficult.

Pilot training slots are another hot topic of conversation. Longer than usual delays in slot openings makes time into service stretch to the limits of patience. As we approach the fourth quarter of this year, it is incumbent upon all of us to gather up our list of what bothers us and work to mitigate the issues.

We have been successful with our clients in securing slots for pre-buys out into the future along the timeline of our listing and acquisition agreements. This not only gives us a positive message to distinguish our listings and acquisition projects from the pack, but also the ability to get about the project with fewer delays. From a regulatory and tax standpoint, it seems that every area of both has more due diligence and paperwork to accomplish the desired well-planned outcome.

So, as I listen to what bothers you in each conversation, it strikes me that in almost every problem, there is a solution if one acts proactively rather than reactively. This means that each of us, regardless of the segment that we cover, should take some time to dust off our process checklists and update them according to today’s environment. Our clients may feel overwhelmed by the added steps, but I assure you they will lose that feeling as soon as a successful sale or acquisition is completed.

Mesinger Pulse – It Seems To All Be Happening At Once

Originally published as a blog for AINsight for Aviation International News on 8/4/23

Sometimes change can be overwhelming. Sky falling events. History can remind us of a few of those events, including the 2001 dot-com bubble burst, the 2008 Global Recession, and the 2015 unspoken recession due to the oil price collapse and other global economic factors. This one will go down as the 2023 industry balance shift. Of all the preceding events and others I did not list, this one could be the most desirable and sought after phenomenon. This 2023 balance shift should bring harmony, reality, normalization, and growth to us all.

Starting in March of 2020, we all got caught off guard by the pandemic. Ultimately, our business grew with the unprecedented surge of first-time buyers entering the fray. Huge numbers of entrants brought demand that stretched us as an industry in all segments. Hangar space was frenzied, pilot training slots had lead times never seen before, and maintenance pre-buy and modernization slots were all but gone. And let’s not forget the actual inventory of aircraft to select from and try to buy. Prices skyrocketed. Supply chain issues caused us all to wring our hands and shake our collective heads. What a mess. Charter demand went through the roof, and the idea of providers delivering a good service offering was next to impossible. So, with this rebalancing of 2023, there will be some bystanders who will not survive, consolidation of some providers, and adjustments from operators and customers. But we are a resilient, strong industry that was built to withstand many adversities even when they occur all at once.

However, there are such positive events taking place that our industry will not only survive but thrive. Let’s name a few. More owners are proactively looking at fleet shifts and transitions, which is allowing new inventory to come to market. More inventory allows for more choices for buyers. More choice will allow for easing in prices, and the easing will allow for more prospects to feel safer about entering the world of aircraft ownership. Do not get me wrong; I am not considering this price easing to disrupt the value calculation of aircraft, simply ease the frenzy. This easing will also allow sellers to be more cognizant of the expectation of the buyer, and therefore play a nicer sandbox game. Also, the natural phenomenon of greater inventory numbers is longer days on the market. This should not scare sellers, just create a more natural process. This more natural process levels the playing field and puts the balance back in our steps.

So welcome to a time of change that is finally created by all the right events. No catastrophic occurrences that stop dead in the tracks the industry and players that have for so many years come to welcome and enjoy the act of buying, selling, operating, and reselling the equipment that flies us safely and efficiently around the world. Enjoy!

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