Every few years business aircraft market events change, sometimes only slightly and others with greater velocity. When these events occur, our industry often gets new players.
In this case, I am speaking of a new crop of preowned business aircraft sales professionals hanging up shingles. I have often discussed how aircraft sales can look sexy, lucrative, and easy from the outside. Believe me—it is the hardest work any of us have done. It is a good living, but hardly lucrative and anything but sexy.
I believe the Covid-19 pandemic is causing some new faces to pop up. As I have written before, the barrier to entry is fairly low for those that want to cross over to brokerage. There are no licenses, state or federal tests, number of hours one must put in as an apprentice, or continuing education to maintain qualifications.
Please do not mistake my comments as suggesting that all new faces will be unqualified or bad actors. This is, after all, not really an aircraft business, it is a people business first. Like in any industry, there will be a few bad apples.
My concerns as new people cross a very low bar to enter our profession are that they come in trying to attract business by quoting very low commissions, giving poor valuation information, and unqualified cost expectations. New aircraft buyers tend to rely on someone who seems authoritative since it is a totally foreign area.
This combination of low cost and high value can attract clients for all the wrong reasons. I was on a webinar the other day and was a bit shocked hearing from some of the panelists who said they were already getting calls from recent first-time buyer clients that were talking about selling airplanes they had just recently purchased. This can only mean a few things—the cost to operate the airplanes they had just purchased was possibly underestimated and/or the complexity and burden of aircraft ownership were not properly explained.
The outcome for these people will be terrible when they realize that not only will the cost to operate be higher than expected, but the cost to get out will be significant. With such a short ownership life, the value of the asset might have gone down 10 percent to 20 percent, or even more. Given the poor information regarding operational costs or complexity, the person helping these first-time owners buy might have also been flawed in the equation of what to pay for the aircraft.
This exercise will cause many to declare that this industry is plagued with bad actors. But that is certainly not the case. Though there may be a few, the vast majority of players in our business are great people, working for the good of the clients they are serving and not just working for a sale and a quick commission.
Are you one of the people who are questioning a recent purchase? Before making a knee-jerk reaction, perhaps the smarter approach would be to find a seasoned, well-versed industry player and be sure there are not better methods to manage the asset, as well as better cost opportunities. Aircraft can be everything you hoped they would be. They are safe, efficient, and can bring real joy!
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.