This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.
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.
Jay Mesinger is the CEO and founder of Mesinger Jet Sales, an international aircraft brokerage firm. With 47 years of successfully buying and selling aircraft, Mesinger Jet Sales has a global reputation for personalized, transparent service.