For the last two years we have seen a lot of “opportunistic buyers” instead of “value buyers” enter the market. To me, an opportunistic buyer is one that comes into the market focused solely on price. They are not as focused on airplane type and are not entering as much because they have a need for the asset, but because they believe they can make a great buy. These buyers call a lot of sellers and make offers with the feeling that if they can buy for their price (often well below market, even in our seriously depressed markets) then they will buy. If they can’t, they will look for something else and move on until they find something that they feel is a true “opportunity.” You can’t fault a buyer for this, but if they are buying to use the aircraft and not to flip it like an inventorying dealer might, then they are missing the true value and best investment. They are only making a short term gain and not a long term smart acquisition. My father often quotes a famous motivational speaker, “price is a one-time thing, but costs are a lifetime thing.”
A value buyer, however, enters a market out of a need for the asset for personal use or business use. They know their mission and what aircraft type will best fulfill it. They study the market and analyze the options. The value buyer will work to make the best buy they can and get the most for their money, but the driving factor is not the “opportunity,” it’s the aircraft. Consequently, it is the value buyer that ultimately buys the best aircraft and makes the best investment because they are focused on the asset and not the just the price. As a buyer’s agent, we help our buyers make the best value buys at the best possible price. As a seller’s agent, we work to define the value proposition of each listing so that the “value buyer” can quickly and clearly distinguish the benefits of the aircraft.
Today, value buyers are coming back. They are entering because they have confidence that we are at the bottom of the market and the free fall is over. They are only buying with a keen eye towards capital costs and go-forward operating costs, but because they are focused on the asset they are making the best investments. It is the value buyer that will lead us back to a normal market and it is the value buyer that will win in the long run. It is good to see them coming back!