Blog - Mesinger Jet Sales

Mesinger Pulse: “2020 Was Only a Nine-month Year for Bizav”

Originally published as a blog for AINsight for Aviation International News on 2/5/21

It’s hard to believe it has been a year already. Before last February, we had barely ever heard of coronavirus, much less Covid-19. Then the business aviation industry stood still from March through May, unsure of the effects.

There is nothing good about the pandemic, with lives lost and businesses disrupted or closed completely. Just think about the hospitality and restaurant industries—devastated.

But let’s take a look at business aircraft sales starting in June 2020. No less devastation from the pandemic, but our industry started to percolate. I have talked to many industry players, from lenders to attorneys to sales professionals like myself. We all began to feel, see, and do business at a pace that some had never seen or experienced, or for many an activity level that they had not felt in years. Bottom line, transaction-wise, 2020 was one of the best years in memory for aircraft sales.

When I hear that I remind them that the year, which seems unrivaled, was actually only a nine-month year. Imagine cramming all that business into nine months? Imagine if it were like that for a full 12 months? Could 2021 be that year? Could we find ourselves enjoying 12 months of that accelerated activity?

I think we could. As I look at the first month of 2021 at our company, we are being awarded new acquisition jobs, and getting more than usual opportunities to provide proposals to both buyers and sellers. We’re adding new inventory and fielding more calls than a typical January. As I know many of you know, January is often a reflective month for prospects and clients as they look inward at their own companies and build strategies for the new year.

Here are some things to watch for as we hope for a successful 2021. Phone activity is always a good barometer. If the phone is ringing, then opportunities can be created.

Corporate activity will also be interesting to watch. As I reported earlier, most corporate buying had retreated last year, in part due to optics, but in larger part due to domestic and international travel restrictions.

I’m happy to report that some of our 2021 new opportunities are coming from the corporate side of the world. They are back out in the market looking for preowned aircraft. This is a great thing.

In addition, continue to monitor the strength of the first-time buyer phenomenon. This segment really grew legs in the second half of 2020 and filled the void left from the corporate retreat.

Next, we should keep our eyes on inventory levels. We will need inventory to complete a successful year. I believe opportunities will arise as we witness what might be a slight culling of fleet sizes by corporate operators. I can already see some downsizing of fleets as those with four airplanes contemplate cutting down to three or some variation of that.

Some new lessons and habits that are being created by the travel restrictions of companies might stick. That may seem bad for our industry but remember, those downsizing do not throw the aircraft away—they just shift ownership. Since I believe that most new aircraft activity and sales will continue in North America, and more specifically in the U.S., the overall fleet size operating here will not go down. The pea may just be under a different shell.

So could the nine-month year now be increased to 12? My answer is yes! Hold on, keep your eyes and ears open for the tell-tale signs I mentioned above. Let’s get ready for a shot in the arm, getting back to a more normal world, and continued success in our industry.

Gulfstream G280, S/N 2026, N285DX

This outstanding Gulfstream G280 S/N 2026 N285DX has been owned by one US company since new.  The owner is a long-time Gulfstream operator with multiple Gulfstream aircraft in their fleet. And, this G280 has been managed by the same great management company on their FAA Part 135 certificate since it was new.

Some of the highlights of G280 S/N 2026 include:

  • The engines and APU are enrolled on the Honeywell MSP Gold program
  • The Ten Passenger Hallmark interior with a forward cabin pocket door
  • A flight observer/attendant seat with the observer intercom panel
  • Gogo AVANCETM L5 4G High Speed Internet with Wi-Fi
  • Cabin High Definition Video System with Dual 19” Widescreen HD LCD Monitors
  • Collins Avionics Software V3.6, ADS-B Out, FANS 1/A+ CPDLC, WAAS/LPV & TCAS 7.1
  • Head Up Display (HUD II) 2020 System & Enhanced Vision System (EVS)
  • ICG ICS-220A Iridium Satcom System & Dual HF Comm System
  • Secondary Flight Data Recorder (FDR) System & Upgraded CVR RIPS

The Gulfstream G280 has been a successful product in the super-mid size aircraft category with many companies operating not just one, but fleets of G280s.  The G280 was designed under a completely new type-certificate from its predecessor the G200 and it has several interior and performance improvements.  Some of those improvements include increased interior cabin length, new engines, a new T-tail with larger horizontal and vertical stabilizers, wing anti-ice provided by engine bleed air, four additional cabin windows and access from the cabin to the baggage compartment.  Additionally, the G280 has a new larger wing design allowing the aircraft to climb directly to 43,000 feet and fly faster than its predecessor.  Per Gulfstream, the aircraft’s published maximum range is 3,600 nautical miles and it has a maximum mach speed of 0.85. The G280 is a very comfortable domestic and internationally capable aircraft.  I have personally flown across the country on a G280 with every seat full and a flight attendant and it was an extremely comfortable great experience.

You can see complete details of this G280 S/N 2026 here: https://jetsales.com/jets/2013-gulfstream-g280-sn-2026/.  Please call us today to learn more, +1-303-444-6766. 

Aircraft Ownership Lifecycle Podcast

Hosted by Asset Insight

Here is a link to Jay Mesinger’s appearance on the episode: “A Look Back at 2020 and Ahead at 2021”

Jay Mesinger: A Look Back at 2020 and Ahead at 2021 (assetinsightpodcast.com)

Jay Mesinger, CEO of Mesinger Jet Sales, provides his thoughts on how things evolved during 2020, amid a pandemic, a national election, and their combined effect on our nation’s economy. We also asked Jay to give us his thought about how 2021 might shape up. Areas covered include:

  • Interest in an aircraft acquisition from first time buyers.
  • Market trends based on fourth quarter sales.
  • How did the US national election affect buyer views and actions during 2020.
  • How is 2021 shaping up, and what might be expected this year.
  • Possible tailwinds and headwinds that could help or hinder business aviation.
  • How might interest in private flying change once the COVID vaccine has been made available.
  • Lessons learned as a result of the pandemic.

Mesinger Pulse: “My 2020 Pandemic Playlist”

Originally published as a blog for AINsight for Aviation International News on 1/8/21

I was thinking the other day about what it would be like to make a soundtrack for the pandemic of 2020. Every one of us probably has that day that it started for them etched in their mind. For me, it was March 14th, 2020. My wife, and business partner, were flying home from Mexico. We actually cut our trip short to get home, not wanting to be stuck away from home. We did not know much that day but rumors, and the initial news was not good. Flying home we decided to let our employees know that at least for the rest of March, everyone should work from home. By the way, everyone is still working from home almost 10 months later. The first song that came to mind was American Pie, by Don McLean1. March 14th was the Day the Music Died for us.

Over the next several weeks the pandemic began to take shape. I remember calling my friends at the title companies as well as my friends that are aviation attorneys. They all reported that they were mostly working to unravel transactions and send back deposits. Our aviation market shut down. The question was for how long? All of us in the aircraft sales business as well as other segments were feeling close to each other and just collectively hoping for the best while reminding each other to hang on. The song that I put here is Frankie Valli, Let’s Hang on2.

Next came the pronouncements in April and May that I am sure you all received as well. “I am never going to fly on a commercial plane again!” This seemed like just idle conversation at the time. People talking about buying planes and in most cases, they were first-time buyers. I think we all sort of half listened to the callers. What was clear was they were all talking about change. The song I picked for this phenomenon was a Bob Dylan song, The Times They Are A-Changin’3.

Well, you will never guess what happened next. As the depth and fear of the pandemic continued and people began to understand that this was not going away so soon, and that the CDC safeguards were our best hope for a pre vaccine solution, the calls that seemed like idle conversation in April and May began to take hold with callers turning into real buyers. The escrow agents began to tell a different story, as did the aviation attorneys. No more time was spent unraveling transactions. Starting in June the conversation turned to people never having been as busy. As I have said many times, when first time buyers come into the world, so much business gets done. Pilots get hired, management companies get new clients, hangars get leased, maintenance and completion companies get filled up beyond capacity. Our industry gets back to work!

Many people asked if this increase in activity would make prices go up? The answer to that question is, no. Two factors are at play here. First and foremost, this frenzy caused by the new buyers, and accelerated by bonus depreciation, was in large part due to the reduced pricing being offered. Some planes that had been on the market for over a year began to sell, in large part because sellers saw this as an opportunity and finally priced their planes correctly. Secondly, the corporate clients have all but retreated from the market for now, thereby balancing demand.

My final song to wrap the year up is, Bobby Hebb’s, Sunny4. It seems there is light at the end of this very dark tunnel. We are all hoping for a healthy 2021. Happy New Year and onward and upward!

I have provided YouTube links to each of the songs so you all have the soundtrack to my year.

Links:

1. American Pie, by Don McLean

2. Frankie Valli, Let’s Hang on

3. Bob Dylan, The Times They Are A-Changin’

4. Bobby Hebb, Sunny

Gulfstream G550 S/N 5258 N780E

Gulfstream G550 S/N 5258 Registration Number N780E has been operated since new by one U.S. Fortune 50 company with a well-established, first-class, Part 91, IS-BAO Stage 3 flight department.  This aircraft supports the company’s global corporate travel needs where dispatch reliability and safety are mission critical. 

This G550 was designed for long-range travel with one or two executives, although this configuration would work equally well for a family or private individual.  To best support this company’s mission, they regularly conduct their long-range flights with a third pilot, a flight attendant and occasionally even a maintenance tech.  The forward cabin can be closed off from the middle and aft cabins providing extra crew space in addition to the crew rest area while providing the passenger(s) extensive space to work and relax.  This operator has found that this configuration, different from a divided aft cabin, provides the greatest flexibility and comfort to all passengers and crew as they circle the globe.  Additionally, the workstation in the middle cabin can be easily swapped out in a hangar with a single aft facing club seat (the operator has the extra seat and it will go with the aircraft).  And, when they do load up the aircraft with more passengers this interior configuration provides great space to divide into groups for separate meetings while in route to their destination (or for a family the kids could stay in the divided forward section while the adults have the entire rest of the cabin to spread out and relax).

This operator has an incredibly capable and sophisticated in-house maintenance team and their own 145 repair station license.  They perform a lot of the smaller maintenance in-house and larger inspections have been done at Gulfstream. 

You can review detailed specifications, lots of photographs and a virtual tour of this Gulfstream G550 here: https://jetsales.com/jets/2010-gulfstream-g550-sn-5258/.  Please call today to learn more and we look forward to discussing this great aircraft with you, +1-303-444-6766, sales@jetsales.com

Mesinger Pulse: “A Stickler For Details”

Originally published as a blog for AINsight for Aviation International News on 12/4/20

Everyone reading this article today has some touchpoint to aviation. And we all know the sophistication and complexity of this field, as well as the expensive factors involved. The cost to buy, the cost to operate, the cost to charter, the overall cost to utilize these amazing pieces of equipment. There is one more cost that could be the biggest. The cost of missing critical steps in the buying, inspecting or operating processes. The details.

I have had a few brokers on the other side of a transaction from us lately say, “Wow, I wish we had found a buyer that was not as focused on the details as you all have been.” I can only scratch my head at that comment and wonder what that must look like for everyone involved. Yes, it is true, we always have the most expansive pre-buy we can choose. Yes, we drive down into smart delivery conditions. None of these factors create transactions that are awkward or overly one-sided. They just create a demand for certainty. After all, that is what our clients pay us for.

I might add this demand for certainty should be a part of both sides of the transaction. The only difference is when the details become important. As sellers, we create accurate specifications that are signed off by the seller, before the marketing begins. As buyers, we have the specifications verified during the pre-buy. As a seller, we pay close attention to the requests made by the buyer when outlining the pre-buy workscope. For us as buyers, it is never just taking a facilities standard pre-buy as sufficient. We are always looking at proximity to near-term future maintenance and being sure we are checking the optional boxes for inspecting those areas that could be near-term expensive findings. Getting this done during the pre-buy continues to give us and our clients certainty they are buying the right plane. There is nothing worse than a buyer missing the details as to what to inspect then having to come back to the table post completed contract and asking the seller to allow for an expansion of the inspection. Again, details and when it is critical for each side to focus on them.

Paying very close attention to the operational protocol of the proposed aircraft will give the buying side more to consider when looking at the best plane to buy. Not realizing that for a 135 operation there needs to be an FDR at all or a modified one capturing the correct number of parameters is one key factor a buyer must consider the details of to avoid costly surprises. Knowing if the plane will be flown Internationally or over water will also drive certain equipment criteria for those specialized operations. Not understanding those details could create post-closing expenses that should be considered in the original criteria for selection of the target aircraft.

All of this is so logical for many to consider, but believe it or not, completely ignored by some. These omissions could drive a terrible and costly outcome. After all, the Devil is in the details, so are the Diamonds!

Mesinger Pulse: “Counting the Days”

Originally published as a blog for AINsight for Aviation International News on 11/6/20

It seems like all we have done lately is count! Now it is time to take out a calendar and count the days. We are still getting calls every day from prospects asking if it is possible to get a plane bought and put into service by the end of the year. Given the complexity of the entire process that task is getting more and more difficult by the day.

The first thing that must happen, and happen in just days, is to find the plane to buy. Believe me if you are contemplating this exercise, know you are not at the head of the line. Many of the best choices are already in play and the remaining planes may not either be the best pedigree, the best equipped, the most solid choices overall. That is not to say that you couldn’t wake up in the morning and find that perfect plane coming to market. It is just this end of the year rush that may have taken many choices off the table.

Let’s say you can find that perfect choice. Next you or your representative or flight department personnel will want to go see it, and review at least initially the logs and records. That may take as long as a week to set a visit and accomplish the cursory review. Many of the people calling us are first time buyers. Therefore, on a parallel course there will need to be a search for either pilots, or better yet, a management company. These searches do not just fall off a tree. This is a carefully executed search that has many critical facets. The management company will among many other operational pieces, have to locate hangar space in the appropriate city and find contract pilots ready to take the important flights to qualify for the bonus depreciation by year end.

Once you have the plane identified then the all-important contract phase begins. This could take up to 10 days to accomplish. Given the rush to get planes purchased and in service, the maintenance facilities are slammed with pre-buys. Getting a slot and having the confidence to pay the inspection cost up front usually does not occur until you have the certainty of a contract signed by buyer and seller.

These are all precious days. Another tricky part can occur if during the inspection items are discovered that parts or engineering requirements start to hold up RTS of the aircraft. COVID-19 has presented several supply chain complications.

Can it all be done if one starts the process on November 6th? Some would say yes if you for instance found a plane new at one of the factories. Getting that into service would be a much easier path. No pre-buy, easier contracting process and fewer into service risks. I have seen buyers wave a pre-buy at year end. That is risky and a path we would not recommend.

The list of critical path players needed to accomplish a transaction will include an aviation attorney, tax strategist, management company, maintenance company, and a broker.

I do not want to take any wind out of anyone’s sails but just approach these year-end-starting-today transactions that have a must close mandate with eyes wide open.

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