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aircraft dealer

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2017 End of Year Market Commentary

Autumn is traditionally the best time to sell an airplane.  Buyer's are looking to make year-end decisions, often for tax reasons, and 2017 has has been no exception.  In many ways, Q4 2017 has surpassed previous years by a wide margin.  Is it because of an overall strong economy, the prospect of lower taxes, pilot medical reform, the need to upgrade capital equipment, rising aircraft prices, or all of the above?  The bigger question is whether or not this momentum will continue in to 2018?

So, what types of airplanes are driving this activity?  This commentary will reference the piston and single-engine turbo prop markets only.  Buyers want consistency, pedigree, and recency. 

They want consistent and frequent operation.  Airplanes that have sat for extended periods, even if low time, are not attractive.  A misconception among sellers is that buyers want low time engines but that's only half of the story.  What they really want are engines that have been frequently used.  A low time engine with minimal use over an extended period is considered a gamble by most buyers.

They want pedigree, meaning thorough, capable, and first-rate maintenance.  They want more than minimal maintenance.  If you're one of those owners who brag about your $1,000 annual then you're going to be in for a surprise when buyers don't appreciate your frugality.

And, buyers want recency.  In other words, they want an updated panel (it doesn't have to be state-of-the-art though), they want a 30 year old airplane to have an upgraded interior, and they want to feel like they're buying a plane that doesn't look like it's a blast from the past.

Consistency.  Pedigree.  Recency.  How does your plane measure up?

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Why hire an aircraft broker?

There’s always debate on this subject, especially on the various owners forums.  Some people say absolutely yes, some say absolutely no, and the rest are somewhere in between.  Even though aircraft brokerage is my business I’m not one of those who will tell you that is the right decision for everyone.  And -- just to get the white elephant out of the room -- yes, there are a few dirtbags in this business.  There are also a lot of very fine, hard working people who want to do the right thing and who pour their souls into helping their clients.  

Buying and selling seems to trigger a lot of emotions.  Throw an airplane into the mix and sometimes those emotions run high.  A lot of brokers are unfairly blamed for things over which they had absolutely no control or knowledge.  This is akin to the real estate agent who gets blamed for the broken water heater after the sale.  How were they supposed to know  Point being -- in today’s bombshell throwing social media world -- you can find less than favorable comments on just about anyone.  If you can’t, they probably haven’t been in the business long.  Dig deeper to find out how a prospective broker handles situations, take the time to actually speak with those who have worked with them, and think critically.  

But back to the question of whether or not a broker is right for you and/or your airplane. Let’s take a look at the 6 most important considerations.  The assumption here is that the broker has a long-standing reputation for great customer service and is not in the business to quickly flip an airplane.

  1. Time.  Even the easiest planes can take a lot of time to sell.  Make sure you have the time.  Figure 40+ hours to stage the plane, take good pictures and video, copy the records, develop the marketing materials, post the ads, call known prospects, answer calls, prepare offers and contracts, renegotiate after an inspection, coordinate delivery, etc.  Here’s a recent example: Within a period of 8 days I took over 30 calls and emails on a Beech A36.  Many of those callers were asking the same questions over and over again.  I don’t mind, it’s my business.  But even at just 15 minutes per call I spent over 7 1/2 hours of my time -- and that doesn’t include the other work I did on that plane.  If your time is valuable or in short supply then maybe you should consider hiring a broker.

  2. A second opinion.  Most reputable brokers keep meticulous records on previous sales and market history.  They use this data along with current trends and forecasts to give you a very clear idea of a likely sales price and time-on-the-market.  You can use them as a sounding board and they can help you see things objectively.  They can also advise you about upgrades you’ve been considering.  I’ll get calls from customers who want to spend money on an upgrade they think will help them sell their plane.  More often than not I encourage them to save their money since their return on investment is almost always well below 100%.

  3. Notes & Databases.  Reputable brokers keep copious notes and databases.  We know who’s in the market, which buyer’s are always looking for that “smokin’ deal”, what the scam-artist tactics are, which maintenance shops are good (and which ones to stay away from).  When you sell a lot of airplanes you collect a lot insider market knowledge that can be very valuable.

  4. Returned communications.  I’ll bet I get a comment a week from someone who told me they couldn’t get so-and-so to return their call.  Sometimes they’re referring to brokers (which is inexcusable) but often it’s from individual owners.  If you’re busy, often out of cell coverage, work nights, or have other reasons why you can’t respond in a timely manner, then maybe you should considering having someone help you.  

  5. Objectivity.  I always cringe when someone tells me their plane is “the best one out there”, “a perfect 10”, or that there’s “absolutely nothing wrong with it.”  Hey, we’re all human and we sometimes miss things.  It’s rare that I don’t discover something about a plane that the owner didn’t know.  Buyer’s want to hear the truth and they are skeptical about so-called perfection.  A good broker will take the time to go see your airplane personally.  If you’re one of those people -- and this happens -- who want to hide or conceal something about your plane then a good broker is not for you.  They will find out and should disclose that info to prospective buyers.

  6. Experience.  An experienced broker will know how to handle contracts, extensions, revisions, foreign purchases and different countries bureaucratic requirements, ferrying, closing, inspections, etc., etc. and they will be able to advise you every step of the way.  We know where the potholes and roadblock lie and can often see them a long way off.

A good broker can be well-worth his/her money, sometimes multifold.  You absolutely must perform due diligence before committing to a brokerage agreement though.  If you’re the kind of person who handles your own investments, sells your own homes, and likes to do everything yourself while never taking counsel from anyone else then you’re not the kind of person who would be a good fit for a brokerage relationship.  A broker is there to help you expand your team, to give you some of your time back, and to broaden your perspective on things you may not have previously ever thought of.  And a good broker should always act in your best interests and be willing to tell you “no” when all you you really want to hear is “yes.”

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What are the first two words in “Good Customer Service?”

Of course, the answer to the question in the headline is “Good Customer.”  Easy enough right?

Wrong.

Why?  Because far too many people demand good customer service without actually being a good customer.  They are rude, arrogant, condescending, and boorish.  They are entitlement minded.  They’ve conned themselves into believing that they actually deserve good customer service without having to give anything in return.  They’ve become that person you’re embarrassed to go out to eat with.

How did we forget basic civility in this country in such a short period of time?  Why is it we think we are special, that we know more than previous generations, and that our expectations are justified?

Don’t agree with me?  Take a look around the next time you’re at a restaurant and watch how patrons treat the wait staff.  Think about how you’ve treated a vendor whom you’ve never met in person.  (Anonymity can easily foster this type of behavior – social media diatribes are a case in point).  Watch how the gate agent is treated the next time you’re at the airport.   I’m not talking everyone here, but it probably won’t take you too long to find someone who fits this description.  Heck, I find myself guilty of such actions from time to time.  We all do.  But enough is enough.

My intent here is not to get into what’s happened to our societal norms, values, and behavior.  What I want to do is to help each of us see where we fit into this equation and what we’re each doing to foster this unhealthy environment.  And it starts with expectations.  Who told you things were going to be perfect all day long?  Did someone, somewhere, whisper in your ear that you have a right to demand perfection from others yet expect grace when it comes your own shortcomings?  I’ll bet your mom didn’t teach that you shouldn’t ever have to wait.  Nor did your dad tell you things wouldn’t go wrong.  If they were good parents they probably told you things like “get over it”, “suck it up”, or “treat others the way you want to be treated.” 

Just to set the record straight, I’m certainly not writing this article based on experiences with my customers.  I’ve got a very deep respect with those who do business with me and vastly appreciate their perspective and experience.  And, almost without exception, I’ve found them to reciprocate on every level.  I like to think that folks in my industry are a notch above others, but I may be slightly biased.  My comments are however based on casual observations from daily life.  Traveling.  Going to the movie.  Eating out.  Waiting in lines at the airport. 

May I encourage you then, the next time you’re faced with a less-than-perfect customer experience, to put on your best face, lift up those who are serving you, and get out of the paradigm that you’re owed something and are not getting it.  In other words, get over yourself, roll with the punches, and appreciate the efforts of others.  Do that, and I’ll bet you’ll notice an improvement in the customer service you receive.  

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