I was talking the other day with the Director of Maintenance for a client of ours. We had just completed a successful sale of a large-body aircraft for their group and we were dissecting the event. As all who are reading this know there are many identifiable parts and pieces to a transaction, including legal, operational considerations, and the aircraft. Even with the aircraft related pieces it all comes down to the people. As I always say, if it were easy, everyone would be doing it!
Is there something in the air? Is there something in the water? It seems transactions are tougher than ever, fraught with more roadblocks than ever and ultimately plagued by the people more than ever. Don’t get me wrong, I truly do not believe that the people get out of bed to just stir the pot and create problems. Is it lack of team leadership? Is it over reaching or people swimming out of their lanes? I am not sure. What I am sure about is that the deals are hard fought to get over the finish line, more than ever.
When there is an opportunity to sell and get engaged in a transaction, more than ever, people seem to hold their collective breath and holding one’s breath cannot last forever. Sooner than later you start to turn blue and the lack of air to the brain makes for hasty decisions. Here is my advice for all of the people involved:
First and foremost, don’t hold your breath. In fact, try to find a place in every day you are involved in a prospective transaction to step back. Recognize this is just an airplane deal. I have always said that at some point or points of every deal let go and see who else is holding on. There is no way anyone of us is strong enough to hold the entire deal together all by ourselves. As I alluded to a few paragraphs up, identify your specific role and duty in the transaction and then stay in your lane. Early in the transaction process as a buying or selling team pick the leader. Often that leader is the broker or consultant, but sometimes it is the aviation counsel. That does not mean that person makes all the decisions it just means that leader has all the information gathering responsibility and disseminates the relevant information back out to the rest of the team members.
Next, communicate the issues in real time. Don’t try to find ways to minimize or spin critical path data to the team, hoping to make bad news into good news or tainting an outcome. That only leads to items being overshadowed by fear rather than sorted out by facts. In fact, most areas of concern in a transaction can be sorted out without derailing the transaction. Conversely if everything becomes a fire drill both side’s principles soon get worn down and the enthusiasm that should accompany a transaction gets lost.
Another very important factor in a transaction is the usual and customary and practical side of the LOI and contracting phase. Often this gets lost in the emotion of the seller in feeling that someone is trying to steal their plane or buy it for wholesale. Even the buyer in today’s market can feel they are over paying in what they feel is a downward trending market. I always coach sellers to look at the certainty with equal eyes as you look at the price. What’s the difference if you think you are getting more than it is worth from a person who cannot really complete a deal and conversely if you are a buyer why not pay a little more if you find the perfect plane for you without having modifications on your dime?
Now remember ultimately no matter the actions of the people involved, if the aircraft sincerely has problems that make it not capable of meeting the delivery conditions contracted between the buyer and seller, then the deal will not work. This is typically the last reason a deal does not go through. It is less seldom about the airplane and more often about the individuals involved.
Be smart, be tolerant, be creative and be vigilant. Airplane deals are getting done. In fact, they are getting done more often than in many recent years especially in North America. So, as you approach the deals do it with eyes wide open. Don’t think a deal can get done if you try to hold it together all by yourself. Don’t think you can overcome a badly contracted deal once in the middle of it, and don’t think you can take on all of the verticals and horizontals by yourself which is often why people try to swim out of their individual lanes. Remember, if it were easy, everyone would be doing it.