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.

The post The ABC of jet sales appeared first on Corporate Jet Investor.

Jetsetter Business Jets has a head office in Tel Aviv and a US office in Fort Lauderdale. Jones Aviation Group is based in Dallas with Oshman Aviation in Fort Worth.

“IADA is proud to continue to grow our membership ranks which are filled with the most highly regarded business aviation companies in our industry,” said Wayne Starling, executive director, IADA. “Our organisation looks forward to continuing to work with Gal Peleg, Cameron Jones and Scott Oshman as our mission to expand transparency and ethical transactions grows within the industry.”

 IADA’s says its dealers handle half of all used business aircraft sales despite accounting for only 17% of brokers. Its members average over 1,300 transactions and $11.8bn in volume each year.

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The NextGen Committee held its first meeting in Las Vegas in October.

“IADA is delighted to unveil the establishment of our young professionals committee, IADA NextGen,” said Wayne Starling, executive director, IADA. “We look forward to supporting their initiatives and eagerly await the promising influence of their voices within our association.”

Jessica Belcher of Exclusive Aircraft Sales is chair of the NextGen Committee. Other members comprise: Richard McEachin, Aviation Legal Group; Patrick Bradley, Global Wings; Kyle Wagman, Leading Edge Aviation Solutions; and Sam Gilchrist of Gilchrist Aviation Law.

The five core pillars of IADA NextGen are: networking; future leaders; mentorship; paying it forward; and industry progress.

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Winters (pictured left) leads Western Aircraft’s new and pre-owned aircraft sales and aircraft management/charter divisions. Western Aircraft is an authorised Piper dealer and the world’s largest authorised Pilatus dealer. The company also operates an aircraft management division with an FAR 135 commuter air carrier certificate and multiple aircraft, trading as WestAir Charter. 

Odegard (pictured right), senior vice president, Aircraft Sales, Wheels Up, is backed by more than 30 years of experience in various sales and marketing positions. He served 18 years with NetJets, working in both territory sales and management roles. He co-founded QS Partners, NetJets’ sales and acquisitions company.

Winters replaces Zipporah Marmor, vice president of Aircraft Transactions, ACASS, who becomes IADA chair emeritus. Read our feature on Marmor’s busy working day, published in Corporate Jet Investor Quarterly, here.

Wayne Starling, executive director, IADA on behalf of the board of directors thanked Marmor for her contributions. “IADA is delighted that Phil Winters and John Odegard have stepped up to these important leadership positions within the association,” he added. “We all have interesting times ahead with an expanding post-pandemic marketplace offset by major unrest in Europe and the Middle East, along with a presidential election in the United States.” 

Other IADA officers for next year include board secretary Toby Smith, who continues in that role, and is vice president of JBA Aviation. The new treasurer is Nick Schneider, president and CEO of Global Wings. Jack Gilchrist, founding shareholder, director of Gilchrist Aviation Law serves as legal counsel.

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Atlas Air Service offers aviation facilities with its head office in Ganderkesee and aviation operations in Bremen, Augsburg and Stuttgart, Germany. It also operates across the Swiss border in Altenrhein, Switzerland, on Lake Constance. In addition to being an IADA-accredited dealer, the company is also an IADA-verified products and services member.

“The IADA Board of Directors is very pleased with this excellent expansion of our member companies’ private aviation capabilities in the European Union and Switzerland,” said Wayne Starling,  executive director  IADA. “Atlas Air Service’s excellent team, led by CEO Nicolas von Mende, is graciously welcomed into our international organisation of the best preowned aircraft dealers in the world.”

“As a pan-European dealer of used aircraft, we are looking forward to continuing to work with our new IADA-accredited colleagues around the world,” said  Nicolas von Mende, CEO, Atlas Air Service.

“As Europe’s largest provider of maintenance, charter and sales for used business aircraft, we offer our customers a wide range of opportunities,” he added.

Atlas Air Service offers preowned aircraft maintenance and modifications, business jet charter, aircraft management and flight training. It has more than 275 employees. 

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“IADA members, who lead the business aircraft resale marketplace, indicated a continuing normalization of the balance between buyers and sellers, with a nearly even split between which group is driving the market,” said Wayne Starling, executive director, IADA. “Their view of the market is cautiously optimistic, particularly given the vagaries of the global economy,” he added.

The perspectives and projections from IADA members for the IADA Market Report are supported by the monthly transaction activity reports submitted by IADA-accredited dealers through AircraftExchange, the online market listing portal. Results from the second quarter 2023 perception survey point toward a continuation of a modest slowdown in overall deals and somewhat softer pricing.

Overall deal flow in the second quarter of 2023 continued to be moderate. In addition to sales data from AircraftExchange listings, IADA’s market report includes data from all IADA-accredited dealer activities and transactions, reported in total.

In the first half of 2023, IADA dealers closed 542 deals, compared with 598 in the first half of 2022, which was an exceptional period in the resale industry. Aircraft resale prices for the next six months are projected to decrease slightly, across turboprops, light jets, midsize jets and large jets.

IADA members expect slight increases in aircraft supply for sale, also across all categories, with a stable willingness among dealers to inventory aircraft for sale. Demand is expected to be stable.

Based on IADA’s second quarter 2023 member survey and sales data provided by the network, respondents expect an ongoing shift toward a more balanced market throughout 2023. By recent historical measures, new aircraft manufacturer backlogs remain strong, but talent shortages and supply chain issues are constraining the ramp-up of production rates.

Business aviation, like other leading industries, continues to face challenges with geopolitical tensions, supply chain disruptions and the possibility of a US economic recession. Still, IADA brokers and dealers continue to see customer interest in owning or operating business aircraft.

IADA members have also reported that aircraft prices and valuations have come off their 2022 peaks, but they still see reasonably strong pricing for preferred makes and models with the right pedigree. Members are also seeing good activity in the long-range heavy jet sector, but have experienced longer times to close with a slight reduction in the number of transactions. There are concerns within the community over the collapse of a few of the charter/fractional providers, but the overall market outlook for preowned business aircraft continues to be broadly favorable for the foreseeable future. Read the report here.  

 IADA-accredited dealer members’ comments from monthly transaction reports

James Norris, Omni Aircraft Sales, Tulsa, Okla

“Overall buying interest is still present; however, buyers are now more concerned about the overall value they are getting from the purchase of an aircraft. Aircraft that are equipped well, have lower time, and great pedigrees are still getting a lot of love.”

Josh Mesinger, Mesinger Jet Sales, Boulder, Colorado

“More inventory coming to market daily, better more balanced buyer/seller due diligence and transaction terms and prices are going down, but at a healthy balanced market rate. We do not see a bubble bursting or any drastic price fall coming barring unforeseen major economic issues.”

Walt Wakefield, Jeteffect, Long Beach, California

“It’s hard to find pilots, parts, training slots and maintenance slots making transactions more difficult and taking longer.”

Mark Bloomer, Jet Transactions, Newport Beach, California

“Inventories are normalising, which promotes a delayed buyer response.”

Johnny Foster,  OGARAJETS, Atlanta, Georgia

“For the buyer, more supply creates more opportunities and a greatly enhanced buyer experience. Value shoppers will find their deals in quarter three and we predict quarter four will be back to a feverish pace.” 

Zipporah Marmor, IADA-Accredited Dealer ACASS, Montreal, Canada

“While the number of closings in the first half of 2023 has certainly been low, the level of activity has not. As such, I am optimistic that we will have a strong second half of the year.”  

Frank Janik,  Leading Edge Aviation Solutions, Parsippany, New Jersey

Here we are back to an even market where sellers nor buyers have the edge. The industry is less and less concerned about the correction that never came (so far). Prices have decreased but at a gradual rate and not even across all sectors (larger older cabins have declined more). Inventory has steadily increased, but we have seen very few if any distressed sellers or repossessions. Guidance to clients is that we are back in a normal market with prices on average trending down 7 %to 9% annually.”

Rohit Kapur, JetHQ, Kansas City, Missouri and Dubai, UAE

“Demand remains stable, though supply side will ease out, bringing out some corrections to the price.”

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Founded in 2001 by CEO Neil Howard, the dealership has South African facilities in Lanseria, near Johannesburg and in Cape Town. It also has a base in Maun in Botswana, Lomé in Togo and an international office in Zurich, Switzerland.

“Absolute Aviation is very excited about becoming part of IADA’s expanding international network of aircraft resale dealers,” said Howard. “Our core values are to create lasting experiences, always do the right thing, be thorough and diligent and therefore the values that IADA stands for resonate strongly with us.”

In addition to aircraft resales, Absolute Aviation also handles new aircraft sales, offers flight services, distributes aircraft parts and engines and operates service centres. It is also an authorised dealer for Beechcraft, Cessna and Leonardo aircraft and a sales representative for pre-owned Textron Aviation aircraft.

“IADA is delighted to add Neil Howard and the strong group of professionals at Absolute Aviation to our global network of accredited aircraft dealers that operates throughout the world,” said Wayne Starling, executive director, IADA. “This development further advances IADA’s global reach and effectiveness.”

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IADA members closed 239 transactions in Q1, down from 288 in the same period of 2022. Members ended the quarter with 197 aircraft under contract, compared with 259 in Q1 2022, with 52 of these transactions reporting lowered prices while only six did last year.

The report said this is due to replenishment of inventory levels and a “return to more rational pricing and valuations” amid continuing levels of customer interest.

The majority of IADA members predicted that all aircraft types will see a slight decrease in pricing over the next six months, with 64% of respondents predicting a slight decrease in mid-size and large jet pricing. Just over half (52%) predicted this for turboprop prices, while 63% expected to see light jets experience a dip in price.

As for supply, the majority of respondents expect a slight increase in availability of all aircraft types, with 69% expecting a slight rise in light jets, 67% in mid-size jets, 62% in turboprops and 60% in large jets.

Zipporah Marmor, chair, IADA said: “There is evidence that demand and supply forces are rebalancing with less frenetic activity, more realistic pricing and a slow but steady buildup of available inventory.”

She added: “Although specific low-time aircraft with attractive pedigrees continue to attract top-dollar, the overall market has begun to downshift from a peak characterised by accelerating prices and strong residual values.”

Although the market is beginning to rebalance, Wayne Starling, executive director, IADA said OEMs are still under pressure due to a build up of backlog and slowly recovering supply chains. He said: “Our organisation foresees a continuation of relatively tight market conditions through 2023, driven by customers who cannot or will not wait two or more years to receive their next aircraft.”

In 2022, IADA members reported the strongest year ever for private jet sales in the history of the association, closing 1,399 deals compared with 1,370 in 2021, although more deals fell through in Q4 than any other quarter in the year.

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