Marmor, a past president of the International Aircraft Dealers Association (IADA), has been involved in aircraft sales for almost 25 years.

“We are privileged to welcome Zipporah to the Opus team,” says Alexandre Lombard, CEO and owner, Opus Aero. “Her extensive experience and proven track record make her an invaluable asset as we embark on our next chapter of growth in North America.”

Marmor started her career at Bombardier in marketing before moving to aircraft sales. She then worked as vice president of sales for NewJet International – then Bombardier’s representative for Monaco, Italy, and Switzerland. She joined ACASS in 2012 rising to vice president of aircraft transactions.

“I am excited to work with Alexandre and the whole Opus team, to expand our footprint in North America,” said Marmor. “Developing our market in the USA and Canada, leveraging Opus’ outstanding reputation and experience, is a natural progression for me.”

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The collaboration promises to refine the accessibility of pre-purchase inspections and data, and enhance the efficiency of service procurement exclusively for IADA members. MRO Insider will showcase IADA Members and Dealers, integrating an IADA-branded interface within the Broker Portal.

“Through enhanced connectivity with IADA, MRO Insider is adding value for the operators and flight departments who work with our dealers and MROs,” said IADA executive director Wayne Starling. “The collaboration between IADA members and MRO Insider will reduce the time spent sourcing PPI slots while the service providers gain business volume for inspections.”

On top of being distinctly highlighted, IADA-affiliated service providers will also be given precedence in search outcomes. After the aircraft transaction, IADA dealers/brokers can gift the MRO Insider app to new aircraft owners. Dealers/brokers will also have their company banner displayed within that aircraft operator’s dashboard. Finally, the MRO Insider platform will distinguish IADA service providers and dealers/brokers with an exclusive IADA emblem.

Andy Nixon, president of MRO Insider, said: “Working with Wayne, Erika Ingle, and the rest of the IADA team on this project has been a terrific experience. Our brands strive to provide business aviation with the tools, industry experts, and efficient timeframes to complete necessary tasks involving the sale and after-sale support. 

“This partnership puts us in a unique position to demonstrate and prove our value proposition to new aircraft purchasers while giving the IADA dealer/broker network peace of mind their new customers are being taken care of after the aircraft delivery.” 

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Not silver but sustainable business aviation dominated the two-day event at the resort amid the tall saguaro cacti. Prickly topics under discussion included the health of the US economy, particularly the impact of high interest rates, the disillusion of some first-time buyers and business aviation under attack.

But there was more gain than pain when it came to the upbeat assessment of the US economy from Gus Faucher, chief economist, PNC Financial Services Group. Without minimising the impact of high interest rates, which could (but not necessarily will) pitch the US economy into recession, Faucher highlighted positive factors likely to lead to steady growth this year and into 2025.

“The US economy is in very good shape right now,” he said. “The economy is 8% larger than it was before the pandemic. Some 22m jobs were lost due to the pandemic but those have been regained and another 8-9m jobs added to where we were before the pandemic.” Strong labour markets underpin consumer spending power, which was driving broad-based economic growth across the US, he added.

Returning rates to 2%

But there are reasons for pessimism. The “inverted yield curve” – meaning short-term interest rates were higher than long-term interest rates – was often associated with recessions. Faucher estimated the likelihood of a US recession at about 35%. However, he felt confident that the Federal Reserve would be successful in returning rates to its goal of 2% from their current level of just over 5%.

“There is likely to be slower growth this year but still growth,” he summarised. “Spending will continue to support growth in 2024, with the Fed cutting rates later this year for technical reasons [partly to cool wage growth] starting in July and in 2025. That will support growth this year and into 2025.”

Interest rates are affecting the decision to buy aircraft but not in the obvious way of affecting decision-making, said Shawn Dinning, senior partner, Dallas Jet International. “I don’t see a situation where a prospective buyer or borrower is looking at rates and saying, ‘I can’t afford this deal’. We are not seeing a delay in decisions to buy. About 70% of our business lately has been cash.”

But interest rates are affecting the core business of his clients – principals and corporations. “We do a lot of multi-family-type real estate companies and two years ago they were printing money, now they went from a nice positive cash flow position to bleeding hundreds of thousands if not millions of dollars because of interest rates,” said Dinning. In some cases, owners need the liquidity on the airplane. “They have to prioritise, so the airplane gets the axe,” he added.

On a more positive note, he said: “Demand continues to surprise me in a good way and it’s keeping up with this increase in inventory in a pretty good way.”

‘More transactions in Q1’

Wayne Starling, executive director of International Aircraft Dealers Association (IADA) agreed. “There were more transactions in the first quarter of this year than there were in the first quarter of last year,” he said, based on his association’s latest report.

But Johnny Foster, president and CEO, OGARAJETS reported growing frustration and disappointment among first-time buyers. Before the pandemic, almost every year consistently, first-time buyers accounted for about 5% of the purchases of aircraft. But that figure rose to 38% of buyers between 2020 and 2022, he said.

They came into the market, often buying legacy aircraft with the promise of bonus depreciation and excessive demand for charter. “Now we are hearing and seeing these first-time buyers are disenfranchised with the model because their aircraft is not flying 600 or 1,000 hours a year [through charter]. It’s flying 100 hours a year,” he said. “And their pilots’ salaries have tripled over the past three years, and they are now being told they have to have three pilots instead of two pilots.”

These frustrations were compounded by their first main maintenance event, which “has caught many by surprise”. The legacy aircraft that cost only $2m or $3m to buy could be facing inspection costs of half a million dollars, said Foster.

‘Full-scale attack’

From disappointment to hostility. Business aviation is under “full-scale attack” and not just in Europe, warned Ed Bolen, president and CEO, National Business Aviation Association. “There is an effort to find ways to disparage our industry which is not consistent with data and our strategy. We see it in a lot of ways,” he said. Examples include the February 21st announcement by the Internal Revenue Service (IRS) that it intended to step up its aircraft owner audits.

Other examples cited were the five-fold increase in fuel tax over five years and the plan for longer depreciation periods. Combating these and other threats would rely on a coordinated industry response and lobbying policy-maker, he said. Not least via the NBAA’s Climbing.Fast campaign.

Speaking to CJI after his presentation, Bolen set out his goals for the end of the decade. “By 2030, we will be ready to answer the SAF Challenge of 3bn gallons produced in the US,” he said. “We would like to see operators continue to look for ways to operate even more sustainably.” That means looking at good quality offset programmes and book-and-claim options. “And we are working hard to introduce advanced air mobility and hybrid solutions and the effectiveness of our air traffic integration.”

Despite challenges facing business aviation – not least high interest rates, supply chain difficulties and the shortage of pilots, airframe and powerplant technicians – the industry can look forward to a bright future as wealth generation and transfer continue to fuel demand, according to speakers.

Stephen Friedrich, chief commercial officer, Embraer summed up the reasons for optimism: “Over the next 20 years, we are going to see a $73trn wealth transfer from Boomers to Generation X and Millennials – and that is only just beginning. This is in addition to [aircraft] purchases by corporate flight departments and private individuals.”

Back in the 19th century the silver boom soon turned to bust, with fire consuming the mining town of Quijotoa in 1889. Attendees at the NAFA conference heard strong reasons to believe in a much more sustainable (and profitable) future for business aviation.

Prickly saguero cacti surrounded the conference venue. Inside, delegates discussed thorny topics such as the impact of high interest rates.

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New and not-so-new technology is enabling a fresh approach to generating leads and closing deals. So, is tech threatening to supersede the old dealmaking skills? We took the temperature of jet sales with three leading industry players.

Active in the 3D virtual world of the metaverse is Jetcraft. In mid-2022, it bought space in three-dimensional social networking platform Decentraland. Within that space, the aircraft sales, transactions and trades specialist built a virtual lounge linking to its virtual hangar and an immersive introduction to Jetcraft for those new to the company or business aviation.

But does it help to sell jets? “Initial feedback is positive, with visitors appreciating this as a first stop to understanding Jetcraft and being able to virtually explore different aircraft models, before investing time in real life viewings,” says Peter Antonenko, president, Jetcraft. “Our expansion into the virtual world reflects the evolution of our customer base, having seen a 20% increase in Jetcraft buyers under 45 in the past five years.”

Generation Z

Younger aircraft owners are often established metaverse and virtual reality users, he tells us. “A growing number of entrepreneurs from tech and finance are entering the world of business aviation and using our tech insight to support their aircraft needs.” Jetcraft says it is keen to stay ahead of its customers, particularly those who belong to Generation Z. “They are increasingly implementing technology into their day-to-day lives and putting more value on their online identities,” says Antonenko. “As these individuals move through the workplace, platforms such as the metaverse will become fundamental to how they conduct business.”

But Jetcraft’s adventures in Decentraland will not replace the personal contact that is so key to closing a deal, he adds. “While our presence in the virtual world serves as a swift and convenient way for customers to interact with Jetcraft, we firmly believe that face-to-face interactions remain integral to business aviation.” Its Decentraland Lounge and virtual reality hangar are designed to complement the company’s existing service, not to replace the in-person connection that clients value, particularly after Covid.

Jetcraft’s virtual sales lounge is evidence of changing buying habits, agrees Wayne Starling, executive director, International Aircraft Dealers Association (IADA). “We are seeing some changes reflected as follows: the showroom that The Jet Business in London has, Jetcraft’s virtual lounge and other dealers integrating new ideas into their business models,” he tells us.

‘Pulling the trigger’

During Covid some buyers transacted purchases without physically viewing the aircraft in person. That has all but stopped, says Starling. While younger buyers use virtual features in their decision-making and buying process, they want to see, touch the metal and smell the leather. “In most cases, they almost always want to see, touch and feel the aircraft before pulling the trigger. The older buyers are beginning to make use of some of the virtual capabilities but not at the pace of the younger buyers,” he says.

Despite experimenting with new sales models, IADA still believes that most dealers/brokers are still traditional when it comes to selling. As AI starts to play a role in all aspects of business, IADA expects it will influence how aircraft transactions are conducted. Change will happen, but it will take time, as most of the aircraft dealers and brokers are old school in the business jet transaction industry, says Starling.

Plus, buyers can have access to too much detail. “The aircraft owners have so much information available via the internet and publications that sometimes it creates more problems/confusion than help. A good aircraft broker must understand and use all the tools available and start preparing for the future.”

But Zoom (and other social networking platforms) are here to stay, according to IADA. Another fan is Jay Mesinger, founder and CEO, Mesinger Jet Sales. “Zoom and Teams are absolutely embedded in the sales process after Covid,” Mesinger tells us. “Sharing your screen is an important way to share information about a proposed business jet transaction.” But technology can never substitute for the traditional sales skills of understanding the buyer’s needs by listening (and then listening some more), says Mesinger. And not being afraid to ask for the sale sometimes gets overlooked.

‘Do less selling’

For Starling, at IADA, one of the fundamental recent changes in sales is not technology but supply. Gone are the days when all you needed to sell a jet was an available aircraft. “Times are changing and brokers must go back to using their selling skills. One thing I stress to brokers is to do less selling and more helping their clients buy what they need and want. We all like to buy versus being sold.” 

So, while new opportunities – like marketing in the metaverse and social media sales leads – are changing the way some buyers, particularly younger ones, acquire jets, fundamental principles still apply.

Back to some final sales advice from Blake in the 1990’s movie Glengarry Glen Ross: “Only one thing matters: Get them to sign on the line, which is dotted.” Was he right all along?

OMW Dashboard

Aircraft for sale

• 657 Light jets for sale/lease – two more than last week. This represents 6.93% of the total fleet. An absorption rate of 4.21 months. 
• 542 Medium jets for sale/lease – one fewer than last week. This represents 6.66% of the total fleet with an absorption rate of 5.07 months. 
• 452 Heavy jets for sale/lease – the same as last week. This represents 6.85% of the total fleet with an absorption rate of 5.13 months. 

Source: Amstat, March 1st 2024

Business jet flights – Week 8, ending February 25th, 2024

Global

Business jet activity was up 2% year-on-year (YOY). Scheduled airline sectors were 7% ahead of last year.

United States  
The 51,480 business jet sectors logged were 3% ahead of the previous week and 3% ahead of 2023.

Europe 
Business jet flights were 2% behind the previous week and level with last year.

Rest of World 
In the Middle East, business jet flights in the past four weeks fell 11% compared with last year. In Week 8 activity was 6% behind Week 8 in 2023.

Source: WINGX, February 29th, 2024.

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He goes through the same process when deciding when to inventory an aircraft.

“The year 2024 is going to be a slow year for transactions. Brokerage will carry on and this makes life harder for dealers looking for inventory,” he says.

Although Freestream brokers aircraft, Ittihadieh (pictured above) is personally focused on inventory deals. “I don’t want to waste my time with buyers who think they know more than you,” he says. “But there will always be opportunities for inventory, there always are. It always has a role to play. You just have to be confident about the aircraft and not look to hold for too long in a falling market.”

Ittihadieh is working on buying a large cabin aircraft for 10% less than last year (he does not want to disclose the model yet). But he is not seeing a big fall in values. “It is not the same market as after 2008. There are still aircraft that are in very strong demand,” says Ittihadieh. “I have three buyers for a G500 at the moment, there are good opportunities with Globals, G650s and you can’t find a Latitude. Values and demand are very dependent on aircraft type – there are some very strong markets.”

Other dealers seem to agree with Ittihadieh. The recent International Aircraft Dealers Association (IADA) member survey shows that its dealers expect to keep finding deals. (Freestream is not an IADA member.)

Just 42% of IADA dealers expect large jet inventory opportunities to be the same in the next six months, with 37% feeling there will be fewer deals. For light jets they are more optimistic, 52% of dealers expect to close a similar number of deals. This is slightly down on the same quarter in 2023. 

One big difference between now and after the Global Financial Crisis is that OEMs still have significant backlogs. Bombardier last week announced a backlog of $14.7bn. This essentially means the company has an orderbook averaging between 18 and 24 months. Gulfstream ($20.1bn) and Textron ($7.4bn) are in a similar situation.

Ittihadieh, however, says there is some room for negotiation with manufacturers. “OEMs have strong backlogs but there are still opportunities to get aircraft faster,” he says. “We have managed to get slots less than 12 months out for certain customers.”

One other big difference between now and the hard market post-2008 is that the US is still dominating. Ittihadieh thinks this will continue in 2024 and is not bullish about most other markets.

“Internationally it is going to be a tough market. Business aviation in China is disintegrating. Russia is a foregone conclusion for the next generation. The Middle East is encouraging and there is activity in southeast Asia but we need America to keep ticking along to drive the whole market.”

The former trader believes that the dollar is going to strengthen and that US interest rates will fall soon as the country needs to stimulate real estate.  “We are going to see rates fall a lot faster than they went up,” he says. “Politicians do not want to see defaults in election years.”

Ittihadieh confirms that he is not predicting a crash in 2024, but he is certain there will be a slowdown. As always, he is not worried about his predictions being wrong.

He adds: “I am the Donald Trump of the aviation industry. I call it like it is.”

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Wayne Starling, executive director, IADA said: “We live in tumultuous times. Despite that, the aviation field continues to show extraordinary strength. Global demand is very high. Much like Q4 2021, that demand is married to constrained inventory levels. From a qualitative point of view, our members sense a softening of those constraints and look forward to greater inventory levels as the year progresses.”

During Q1 2022, IADA members signed 223 acquisition agreements, had been retained to sell 155 aircraft, had 259 aircraft under contract and saw only 45 deals fall apart.

Gordon Cameron, vice president, Outbound Sales Team, XO Global and IADA-accredited dealer said: “Price elasticity is coming to the forefront; the rising cost of capital will put pressure on the opportunity cost of acquisition, feel the pricing levels will remain but, days on the market will start to creep up as demand slowly softens over the next 12 months.”

Cody Vanderslice, manager, Pre-Owned Market Analysis, Textron and IADA OEM member, said the Wichita-based manufacturer is continuing to see strong demand for aircraft.

“It does seem the speed at which we get a listing under LOI [Letter of Intent] is decreasing. It also seems there are more off-market aircraft being communicated. This indicates we may be seeing the first signs of the market softening a touch. Pricing remains very strong and availability remains very limited, but it’s possible the first week of March was the peak for pricing and low availability. We will know in a month,” said Vanderslice.

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“When our board reviewed the activities of our members, it reinforced that the organization’s dealers operate effectively throughout the world, successfully conducting aircraft sales transactions on many continents,” said IADA Chairman Brian Proctor. “Our new name – International Aircraft Dealers Association – certainly reflects this reality and speaks to the global significance that makes our group the world’s most trusted aircraft dealers.”

New Initiatives Coming

As the International Aircraft Dealers Association rolls out its new identity, the organisation will introduce a number of initiatives in the coming months, including a new website, a highly sophisticated international search portal for aircraft offered by IADA dealers, and processes to standardise and streamline aircraft transactions, including third-party accreditation of aircraft dealers in the U.S. and abroad.

IADA members and clients will celebrate the new international focus of the organisation at National Business Aviation Association’s Business Aviation Convention & Exhibit (NBAA-BACE) in Orlando, October 16-18. The organisation plans a large presence of aircraft at the static display on Orlando Executive Airport.

International Aircraft Dealers Association brokers historically account for approximately 60 percent of the global multibillion dollar used aircraft transactions market, while only comprising three percent of total dealers. IADA-certified dealers have provided valuable counsel to a large portion of the world’s aircraft sales transactions, some representing buyers and some representing sellers.

Buoyant Markets Around the World

“International Aircraft Dealers Association brokers are experiencing vibrant markets around the world for used business aircraft. With this increased volume of transactions, it is more important than ever to pick qualified and well-experienced dealers to assist buyers and sellers of aircraft,” said Proctor.

IADA members follow a strict International Aircraft Dealers Association Code of Ethics, and the dealer members must pass a rigorous certification process to assure the highest standards when buying and selling previously owned aircraft. Ultimately, they are recognized as IADA Certified Aircraft Dealers. International Aircraft Dealers Association Products and Services Members represent a variety of aviation services that operate with the highest professional standards in the industry.

International Aircraft Dealers Association is a professional trade association formed more than 25 years ago. It is comprised of selected aircraft sales and brokerage businesses that are IADA Certified, and aircraft product/services companies that adhere to the highest professional standards. Promoting the growth and public understanding of the aircraft resale industry, IADA members abide by an elite 14-point Code of Ethics that provides standards of business conduct regarding aircraft transactions.

International Aircraft Dealers Association Chairman Brian Proctor is President and CEO of Mente Group.

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