Blog - Mesinger Jet Sales

Mesinger Pulse: From Where I Sit

Originally published as a blog for AINsight for Aviation International News on 5/6/22

Do any of us ever have a chance to make a bold statement that NO one can argue with? Well, here is mine. These are such interesting times. Go ahead, just try to argue with that. Every day I come to my office thinking today will be the day that change occurs. So far that has not happened. From where I sit, I still see demand at all-time highs, I still see supply trickle in and prices remain at all-time highs. Yes, in certain areas of the market a few more planes are coming to market, however, this is not causing pressure on pricing.

All the reasons that should be in place for a change are in place including geopolitical events, interest rate hikes and on and on, but none of these market-changing events are changing the market. I am still seeing sellers limit drastically the allowed inspection protocols. I am still seeing sellers say well that was easy, maybe I should ask even more and give even less. I am still seeing buyers being willing to accept these prices and terms.

What may my new mantra be? I will just come to work each day and it will be what it will be. How can we possibly see interest rates go up more than has happened for a hike in the past 22 years and the stock market goes up 900 points? How do we possibly model that?

BTW, I am not really going to come to work each day and think well today it will just be what it will be. I am going to continue to advise my clients, both sellers and buyers, to act prudently. Act deliberately and keep putting themselves in the other’s shoes. Balance is what we must strive for, or I believe we will be setting ourselves up for a harder fall. I am not suggesting that a buyer should not pay a reasonably higher price and I am not suggesting that sellers should not price their plane commensurate with the current selling prices of like planes. I am suggesting that everyone should be very careful to not drive the other side to sit on the fence. We should keep the playing field safe and inviting for all to join in.

I still feel that though the prices are higher than in the past, the terms of a sale should be reasonable and allow for the due diligence that we all have enjoyed in transactions since the beginning of our industry.

I would also hope that the process of inviting offers could go back to an enjoyable time. It always amazes me when we make an offer on day one and it is for the asking price then the seller says well that was just day one, I think I will leave it out there. What is that message, don’t rush to put your best foot forward because that may seem too easy or quick, or risk waiting and missing the plane? Somehow the buyer gets penalized for being a good listener.

Balance is critical for a continued sustainable process. Balance cannot occur if both sides are not participating. Keeping balance will keep our market going forever, lack of balance will throw us all off. So, from where I sit, I see an opportunity for both sides to work to create and sustain the industry we all have enjoyed.

Mesinger Pulse: Just Say No

Originally published as a blog for AINsight for Aviation International News on 4/1/22

Wednesday of this week, I had the privilege of hosting a Webinar whose title was, “Hard Landing, Soft Landing. If not now when?” We had a distinguished panel that included an all-star aviation banker, a top-notch aircraft appraiser, and my sons Josh and Adam. We discussed the current market, and its imbalance with respect to many industry segments including pilot shortages, hangar shortages, maintenance slot shortages and aircraft inventory shortages. Then we went into the quickly rising purchase prices of the aircraft. It was agreed that prices have been rising every bit of 10% a month for the last 4 months. Not to mention the preceding 12 months not having had any of the usual annual depreciation to the equipment which is typically around 10% per year.

The next topic shifted to the process that has been changing along the back of these escalating prices. Sellers not being willing to allow any pre-buy inspection, or very limited if allowed at all. We all agreed that our industry is dynamic and not static, so a shift always comes. But when the pendulum begins to swing in the other direction will it be a soft or hard landing? I have always felt that a hard landing would occur if we went into a global or even domestic recession, however, some on the panel believed that a domestic recession and some inflationary pressure may be baked in for some or many of the new entrants to the market and would not result in such a dramatic shift.  It would most likely come from a geopolitical event causing major implications to world order, and I am sure everyone’s eyes are open enough to see that is happening as we speak. As one panelist stated, one misguided missile strike into a neighboring country could change immediately the dynamic of what is already a catastrophic set of events. We are all hopeful for de-escalation and a negotiated settlement to the current crisis.

The soft landing, or as we discussed it yesterday and renamed it a resilient landing, will occur if the demand remains high and the economy remains good, but due to a slow and steady increase in supply, we will likely see and feel an easing on pricing and not have huge drops in value. The pendulum would shift back to a more balanced market. That set of events and outcomes would be sustainable and allow for a measured growth rather than a complete drop off of values and business activity for our industry.

But what can we do while we are all in this market frenzy to start to control our current destiny and preserve the fabulous industry? Perhaps we could collectively begin to “Just Say No.” No to process that we know is not smart, no to demands placed on buyers by bad actors that are driving bad decisions to be made in the buying process, and no to rapidly increasing outlandish pricing.

I know I am talking about a long shot approach. But I wonder if we could get to a critical mass of us that just say no, we can smartly, properly, and correctly make some groundswell changes right now to our industry. If enough of us began to say no to no pre-buys and no to the price being demanded, could we in fact move the needle? The alternative to a continued set of these circumstances, is we are going as an industry to drive buyers to sit on the fence and wait. That will drive our industry to a standstill, and nothing gets done and nothing sells.

I know many of you have enjoyed our industry like I have for decades. We all owe it to our industry to protect it from ourselves. It may just be the time to say no!

Mesinger Pulse: Is There a “Glass Ceiling” Up There?

Originally published as a blog for AINsight for Aviation International News on 3/4/22

I would like to discuss the “glass ceiling” regarding the price of aircraft and other areas of the business aviation industry. Let’s start with the ever-escalating price of preowned aircraft and the biggest question: will we start to see these bump into a glass ceiling and begin to be held at a plateau or even pushed back down? And when this occurs, will we have a gentle landing or an abrupt change?

Remember 2008, when preowned inventory went from about 7 percent of the available fleet for sale to 18 percent practically overnight. The difference in the gentle landing or not will largely be because of such a drastic change in inventory very quickly.

Currently, my sense is that demand will not subside. In fact, I am already watching demand outlive the pandemic.

My sincere hope is that we solve the escalating pricing with more supply gradually. This will result in stabilization of pricing without steep drop-offs in values and keep pricing levels from driving up one sale to the next. Then we can begin the traditional annual depreciation of 7 to 10 percent that we are all accustomed to for equipment in a more balanced market.

One can always say that other traditional causes for abrupt changes in values result from major geopolitical events or global meltdowns. I hate to remind you that we could be in that geopolitical period as I write this.

The next big pricing conversation should be around the phenomenon of personnel shortages and added costs to recruit and retain. This is for not just pilots but also all other flight department personnel such as maintenance technicians, schedulers, and dispatchers.

In fact, I hosted a webinar last week and had the CEO of one of the leading recruitment companies on, and the discussion circled around a central theme: when is enough, enough? When will salaries and benefits settle down?

The answer to that is of course driven by both the airlines’ constant recruiting and a large swath of the aging personnel retiring, leaving the available pool ever smaller. As an industry, we cannot just flip a switch and have replenished personnel standing by. It takes years to build this bench.

Jet fuel is another segment experiencing cost escalations. This one really rides on the back of many global supply and geopolitical concerns.

The industry seems not to be noticing this increase as closely as the price of aircraft or crew, but there will be a price that will come about, and then the same question may be asked: when is enough, enough?

What price per gallon will finally get the attention of the operators, leading flying to trend downwards? Fuel is often the most expensive variable cost for an operator and many of the first-time buyers entering the market may be in for sticker shock on this line item.

Another impacted area is the modernization and maintenance side of our industry. This area is most impacted by supply chain interruptions. This adds inflationary pressure, causing costs to rise and I assure you will lead to operators demanding that enough is indeed enough. Enough in delays, as well as costs associated with the events.

Are we as an industry trapped in this situation? To some degree yes, and yet hopefully the resiliency of our industry will allow us to manage the challenges and associated costs. Attempting to control what we can might help us steer this ship to a more sustainable reality.

Mesinger Pulse: For Every 1 Winner There Are At Least 10 Losers

Originally published as a blog for AINsight for Aviation International News on 2/4/22

In my title, exchange the word winner with buyer and loser with the prospective aircraft buyer who didn’t have their offer accepted. Frankly, I believe that is how the participants in today’s short supply feeding frenzy feel about themselves. Other new terms are popping up in our vernacular, such as Blind Auction and Sealed Bid Auction. The process of choosing the winner in this process is changing rapidly, and not in a very positive way. I had a client say to me recently that he has never worked so hard to try to give 4 different sellers $15 million unsuccessfully as this process of trying to buy a plane has been for him. So, the question then becomes how long can we keep losers motivated to stay in the game?

When one plane comes on the market in the morning and by lunch, there are 10 full-price offers, the idea of how I can be the winner in this process becomes murky. I see some of us now saying we are going to open this up on Monday and not respond to any offer until Friday and then sell to the highest bidder. This open bid period is not bad and we as a company work very hard to keep the idea of due diligence a healthy part of the transaction. Considering offers based on when they come in and dealing with them in that order has all but vanished from our process. The idea of a plane staying on the market 200 days or longer is gone. In fact, we used to brag about our company’s average days on the market for planes we represented. We felt it was amazing to have an average of 57 days from listing to an accepted LOI. Boy, weren’t those the days? Today it is about 5 days.

It was only a few months ago that brokers and sellers were still listing planes with asking prices. During that period, it was prudent as a buyer’s representative to suggest to our buyers to offer the asking price. Now that is over and the new listing strategy is to list the plane at “Make Offer”. This leaves room for the sellers to give the buyers some vague guidance on pricing then stand back. The net result is often an even higher sale price than what would have been contemplated with comparisons to the last sale in the market.

I am not suggesting any of this process is wrong. It is what would be expected with the current supply/demand dynamics. Why not try to capture for your selling client the greatest amount of money possible? I am also watching dealers pay retail for aircraft and then remarketing them to again reset retail. This is of course the traditional definition of buying for resale, but creates further competition for becoming a winner in this market.

What will end this current cycle in our market? One of several things: Like in 2007/8 when the global economy shuttered, the price of aircraft, off the 10-20% premium being paid at that time, was 50-70% drop in values overnight. A repeat of those conditions would be the most catastrophic reason for an immediate drop in value and an immediate shift in supply. A less radical and more hopeful reason for a shift, though not as dramatic, is that the corporate operator segment of our industry that has been dormant for the last 2 years comes back into play. Due to Covid and the lack of travel among this segment, there has been no real trading to speak of. When this important segment comes back, they will not deplete the inventory but instead, keep it more balanced by bringing a plane to the market for every aircraft purchased. This will potentially increase supply rather than kill demand and would be a healthy nudge of the pendulum.

Regardless of the reasoning for a market swing, it is incumbent on us as an industry to keep our buyers whose offers were not accepted interested and motivated to stay in the game and not retreat to the fence. That would bring a complete stop to our forward progress.

Mesinger Pulse: Who Would You Like to be With at the Altar?

Originally published as a blog for AINsight for Aviation International News on 1/7/22

Well now that I have you thinking let me explain my question. As you enter one of the most important phases of your life, who will be your partner? Will it be someone who you have just met? Or will it be someone who is trusted? I hope it is the latter. Remember, this is not a relationship that is to be taken lightly. This is a relationship that represents a significant financial investment and one that must be founded on safety, transparency, and trust. This is about who you chose to help you buy an aircraft!

I have spoken about the frenzy of first-time buyers who rushed to complete transactions before the end of 2021 to garner 100% Bonus Depreciation. This created an uncomfortable buying process that include horse races, not only to see who can pay the most for the plane, but also often who will accept the least amount of due diligence with respect to inspecting prior to closing.

The next six to twelve months will be filled with stories, webinars and articles about the disappointment experienced by many of these buyers as they begin to fully understand what it is they purchased. Not just the price they paid, but also in capability of the mission fulfillment of the aircraft, and the mechanical condition. When I speak about who is with you at the altar, ask yourself how that person will be there for you when these questions start to arise?

As a result of the frenzy, I am not just seeing the dreaded back-to-back transactions taking place that muddies the waters between buyer and seller, but I am actually hearing about back-to-back to back-to-back to back-to-back transactions taking place. That’s right. Actual sellers can be three times removed from the buyer. Who will even be able to sort this web out when the problems start to occur? This is a surefire recipe for a very poor wedding reception.

I have had clients lament that they have never worked so hard to buy anything as they have in this past six months, and I may add unsuccessfully in some cases. High frustration, and to some an absolute disdain for our aviation industry was a result. Believe me, our multi-generational industry is not bad, some of the actors are. For the majority of us who earn our living in this industry and have for years we are suffering as well.

So, what is coming for us in 2022?

I do not see this high demand that has been created by the pandemic going away in 2022, I do not even see prices dropping. I am hopeful that a more orderly, business-like process will return to us all. I see a bit more supply being added to our markets through new aircraft deliveries, planes being traded back into the mix, and corporations for the first time in two to three years focusing on their fleet mix and desire to modernize. It will not take a large influx of supply to begin to balance out our market again.

Bottom line I am hopeful that 2022 will be a year of balance and more harmony. It will be a year that helps us all pick that perfect person to be at the altar with for a long successful relationship, because that decision matters greatly. Happy New Year all!

Mesinger Pulse: Wealth and New Attitudes Towards Air Travel

Originally published as a blog for AINsight for Aviation International News on 12/3/21

I have spoken many times during the pandemic about the effects that would land on the back of air travel. I speak about this both based on commercial travel and private travel. Who would have thought in their wildest modeling that the demand for travel would shift as dramatically as it has? If you think of a fulcrum and the center balance was equal parts commercial air travel versus private air travel the balance itself kept all providers capable of delivering a good product.

For the commercial traveler, flights generally left on time and arrived at their destinations safely. For the private traveler, providers could manage the load without panic and distress. During the pandemic, in many segments of our society, a new and grand wealth began to emerge. With this wealth, and the lure of 100% Bonus Depreciation, coupled with a complete lack of desire to travel commercially and populate public airports and packed aircraft there has been an unimaginable shift to private air travel.

This shift is stretching us in every corner of our industry, to our most difficult ends. Who could have modeled this growth and demand and what action would we have been able to take? Jet card providers are having to fulfill unprecedented lift demand at a time when every charter operator and fractional provider are being asked at once to be on a ramp in the next 12 hours to provide a customer lift. At the same time, the price of fuel and pilot salaries are increasing, and the third-party charter rates are exceeding the modeled pricing structure built into the jet card’s lift budgets.

How can you ask all customers to potentially back down from the trip they individually expect? Impossible. Imagine if you had purchased the minimum card share and are now being told it may take 90 days to fulfill the lift request. Not a pretty picture. I have prospects ask me all the time, if there are no more planes measurably being operated, why are there pilot shortages? One clear reason is the increased utilization of each plane being flown for charter requires the addition of a third or even fourth pilot to a plane. This is also occurring at the same time commercial travel is increasing. Airline pilot recruitment efforts have been lagging since the great recession, but the benefits of flying for an airline, such as set schedules and salaries are luring pilots away from general aviation.

Now let’s shift the focus to whole aircraft ownership. This area is also stretched to the max. There are no longer multiple aircraft of each type for sale. Even planes that had been on the market for 500 days have been culled out. So, we are dealing with one aircraft at a time entering the market as opposed to multiple options for a buyer at any given time. As a result, multiple full price offers are generated on day one of the listing. This leaves many sellers to say, well that was easy but now how do I break the tie? Simple, start a bidding war. Not only is price a new threshold but terms as well. Limited pre-buys are often allowed or expected from a seller leaving buyers to not perform the appropriate due diligence for an acquisition as complex as an aircraft.

So, after reading this far into the article you could be wondering, is this the end as we know it of our wonderful industry. Absolutely not!! Here is what I predict will lighten the load and start the shift back to a manageable business climate. The wealth created will not go away and the aversion to flying commercially will most likely not subside. What will change will be who is in the market transacting aircraft. We have largely been working without the benefit of corporate clients since March of 2020. This critical segment of the industry has been virtually grounded by the pandemic. This means that the huge unappareled growth of first-time buyers has depleted our available inventory. I predict that in 2022 this important transacting segment will be back. Once they are, inventory levels will start to regenerate. Next, once current owners have confidence restored that added inventory levels will allow them to replace a relinquished plane, they will start getting back to the idea it is safe to sell and not hold back until replaced. This too will add more inventory. Once there are more planes sold the charter pool will grow, and the need now for planes to fly 600 hours a year will likely go back to a more normal 350 hours a year. The charter market and jet card providers will not be stretched as thin any longer. I think we will start to enjoy as an industry the new lasting demand rather than be daunted by it.

Mesinger Pulse: Aircraft Buying is a Marathon, Not a Sprint

Originally published as a blog for AINsight for Aviation International News on 11/5/21

It is a funny thing, trust and confidence. Neither happens by accident and if it does it’s usually not sustainable. I sometimes hear from a prospective buyer, “bring me an airplane, and if I buy it I will pay you.” A seller may say, “I don’t want to lock my plane up, whomever brings me a buyer I will pay.” Now remember, those who can afford private jets very typically are very astute people. Yet when I hear the above comments about a lack of commitment to an industry professional it makes me wonder.

It is so much smarter to have someone in a transaction who is on your side working for you and not being driven to work for themselves instead. After all, if you are not committed to the partner, they will not be committed to you. That lack of commitment can be very costly. Back-to-back transactions can be filled with extra hands and little or no transparency. Full disclosure is imperative in a complicated transaction. In fact, given the number of first-time buyers entering the market, the idea of extra communication is vital to the buyer.

In our firm, we go above and beyond to make sure we are involving the buyer at every level. Surprises are so problematic. As prospects scramble to get to a year end finish line, I see great minds begin to work with a bit of mushiness. Worse still I see some aviation professionals even support the weaker due diligence. I think deadlines can be drivers for failure rather than success. If the only measure of success is making a transaction have an in-service target for bonus depreciation, then the next year could prove really bad as maintenance and paperwork issues that should have been flushed out well in advance of the sale come to light.

This could turn a new generation of buyers into thinking this is how our industry works. Nothing could be farther from the truth. Imagine buying a plane, taking it post-closing to a 135 operator to add to their certificate only to find out the FDR or the fire blocking is not correct and there are no 8130 parts tags for traceability. The cost could be prohibitive. These are the types of missed due diligence we are hearing about as buyers focus with their sales professionals only on an in-service date.

We are actually not taking on new clients who want that guarantee of bonus depreciation as a mandate. Instead, I am coaching the new clients to be willing to wait until the first of the year when the buying frenzy will no doubt slow some and the pricing may be more logical. I am not saying that much of the prices for pre-owned aircraft will not stay higher than they have been, but the horse races may be over. After all, once the corporate buying and selling begins again there will no doubt be a few more of each type of aircraft available for sale. Even a slight shift in supply and the lure of a date certain closing to capture a tax play goes away the world of buying just may get to be a bit easier and smarter.

As I mentioned, at our firm we are working hard to not just capture tax plays but buy and sell great aircraft. My sense is that the amount extra someone is willing to pay for an opportunity to capture that tax consideration will not remain as a value add on the worth of the aircraft. We need to all be very good stewards of our industry and maintain the high due diligence standards as well as guide our clients to make smart, strategic acquisitions. We all have to earn our clients’ ears!

Mesinger Pulse: Step Climbing to New Heights

Originally published as a blog for AINsight for Aviation International News on 10/1/21

So many of us in our industry are looking up to view the new heights of aircraft pricing in our industry. Rather than looking straight to the sky it may be smarter to start at the horizon and look up in incremental stages, much like a step-climb in altitude for aircraft. A step-climb in aviation is a series of altitude gains that improve fuel economy by moving into thinner air as an aircraft becomes lighter and becomes capable of faster, more economical flight.

We must be very aware that like an aircraft taking to the sky, achieving stable higher prices must be done in steps. Can you really just set aircraft prices higher and higher, or must there be some real lift based on the air beneath our wings? Just because the one plane that was for sale and sold for a new record high is that reason enough to expect even higher on the next available aircraft? I remember the good old days of valuing aircraft. There was the utilization of the near past term sales comps, current for sale comps and then the evaluation of the equipment and year model from one plane to the next. Is it ok to just say that was how we did it one month ago but everything has changed now? Forget the last sale, forget the comp of others on the market, just expect to sell for more than the last one did. In fact, expect to sell for 10 to 20 % more.

As an example, as a buying broker we call to get info on a plane that has just come on the market today. We are advised by the broker who is listing the plane that we better act fast because he has people already circling and expects 5 offers by the end of the day. It does not matter if the plane is due for its biggest aircraft inspection in 3 months, the seller will not allow it to be done as a part of the pre-buy inspection. So not only are prices going up without a strong foundation in market metrics but sellers are often demanding that inspections be limited in scope.

Then comes the best part. Once the buyer has an LOI and everyone involved with the aircraft gets a better understanding of the offering the entire transaction often falls apart. Sometimes these first day offerings by the new broker have not come with verification of the specifications, review of the logs and records or even a viewing of the aircraft. This can lead to surprises once both buyer and selling broker arrive for a showing. I am not suggesting that anyone is misrepresenting the plane. I am just suggesting that we are losing the step climb. That due diligence that includes the listing broker visiting the plane in person, reading the records, building a new accurate specification sheet, and having current photos. All the tools that make for a reliable listing.

My fear is that if we as an industry do not adopt the theory of flight into our inventory segment, we will run out of lift by having too much angle in our climb thereby not solidly gaining altitude but stalling out. We all need to be very careful how we try to inject steep angle into our climb. If we do this correctly, we will see each other at the top of new solid heights.

Mesinger Pulse: Did We Get Caught Flat Footed?

Originally published as a blog for AINsight for Aviation International News on 9/3/21

Let me explain. We as a collective industry have been working to get our messaging right to understand the unprecedented activity currently in pre-owned aircraft markets. As I have talked about in many articles and webinars, it was really hard to quantify if prices of aircraft were going up or were they just flattening out. Was inventory really shrinking before our eyes to record lows or was it just right sizing based on a new demand ratio?

We are experiencing a supply versus demand ratio like we have possibly never seen. During the emerging market phenomenon that lasted from 2003 through 2008, supply of our inventory was also stressed, however the biggest difference between then and now was that in the emerging markets buyers only wanted new or like-new aircraft. The smaller, older planes did not fall into that stress.

The mantra we have been using at our company the past 6 months is when you come in as a buyer you must be patient. Of course, we might find a plane in 2 days, but it might take 90 days. Patience is a virtue. I am always assured by my clients that they can wait. Then on about week 2 of the hunt there seems to be a crack in the veneer of the patience.

What is different today is we will not see multiple planes on websites or in catalog magazines. They will trickle out one at a time and sell in days. In most cases for the asking price.  How should we feel about that? I guess it is time to be OK with this frenzied pace. What is critical is that you do not get swept up in the pace and be allowed to miss what we all know is critical due diligence. There is no way that anyone should buy a plane without a comprehensive pre-buy. There is no way to accept weak or missing records. There is no way one should not have a very proper purchase agreement. As my good friend Zig Ziglar would say, “price is a one-time thing, cost is a lifetime thing.”  

Remember this is not the wild west even though it may seem like it. This is just a pandemic reality of the largest number of first-time buyers coming into our marketspace ever. How does one best protect themselves when entering this market? Use common sense. If it seems too perfect it just may be. If you are feeling pushed you just may be being pushed. Transactions are expensive so make sure you don’t have to do them too often. Make sure you are well represented and that whomever you have chosen to represent you is capable of building all the purchase tools you need to make good choices including mission profile modeling, budgeting work, pre-buy inspection protocols. Each and every part of a complex 360-degree process must be well thought out. Do not be afraid to get in this ownership process but do be afraid to get in without smart help at every turn.

Mesinger Pulse: The Year is Flying By

Originally published as a blog for AINsight for Aviation International News on 8/6/21

Hard to believe it is August 2021. Maybe the title of the article should have been, “Can You Be Flying by December 31st?” The answer is maybe, maybe not. Last year about this time people started to get very serious about wanting to buy a plane. They also wanted it in service by December 31st to take advantage of Bonus Depreciation. The world was in the middle of wave one of the pandemic; World travel was virtually shut down; Domestic travel although also restricted was all the rage; People were buying second and third homes in the US, and the next hurdle was getting to them. First-time buyers who had been threatening to buy planes were storming in to act on the threats.

As a country, we were beginning to experience what continues today, which are major supply chain issues. Long delays were occurring in our industry on the maintenance side of things. Engines and APUs were having constant delays and setbacks in delivery due to parts not being manufactured and shipped on a pace we as a world had been used to. Other production and replacement parts were also seriously impacted. These delays alone were causing me to advise every single new client that hired us to purchase a plane, and have it in service by a guaranteed December 31, 2020 date, to not even start the process if that mandated a contingency to walk away at the end of December on a transaction that could not complete. I knew I would not have any luck writing that into a contract with a seller. In 100% of the cases, my buyers all said, no problem, we understand and it would just be nice, but not a necessity. That was smart buying! BTW these supply chain delays are still happening.

Last year at this time there was not the low supply of aircraft that developed by the end of the year. In fact, today we are at a very low point of inventory to choose from. If there is anything that might impact the final sales numbers of 2021 it will not be demand, it will be the ability to fulfill the demand. Let’s take a look at the factors that are creating this phenomenon.

First, our world is still basically shut down. Yes, it is opening up slowly but cross border work must be checked almost daily. This keeps us in the US from being able to readily import aircraft and therefore our inventory universe reliant on US aircraft. Next, the corporate side of our industry is just, and I mean just, starting to wake up. Soon I am confident this portion of our industry will start to transact and that will provide additional supply of inventory to choose from. Next, and one of the most impactful reasons that our inventory supply has gone down, is the fact that we had a record number of first-time buyers in the 4th quarter of 2020 and still today. This group of buyers only depleted our available inventory rather than contributing to the supply with a relinquished airplane. Let me explain. It is like going to a party and not taking any hors d’oeuvre or wine. You just eat the food and drink the party host’s wine. First-time buyers did not have anything to contribute back to our supply. All of these things have contributed to the short supply of aircraft.

These contributing factors will ebb and flow. They always do. Those of you who have been in our industry for years know it is not static, it is very dynamic. Demand and supply move like a pendulum. The real question is should you get into our industry now or wait? My sense is if an aircraft fits your needs now, don’t wait. That of course means you should not overpay; you should not lower your expectations for quality. It just may mean that the key word should be patience. It also means that although it could take 60 to 90 days to find the perfect plane, you should be ready on day 2! Have your legal, management and consultant team in place on day one.

Success is not an option. Just understand the factors that create success. If you want a chance at a December 31st in-service transaction, then get started as soon as you finish reading this article.

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