Timing Your Business Jet Sale

Written by Marius Breitenbach, Sales Director
[email protected]

When the time comes to sell your business jet, what are some critical factors you need to consider before placing the aircraft on the market to ensure you maintain control of the transaction process, achieve a successful outcome and minimize your deal costs?

Many owners make the decision to sell their aircraft based on the expectation of a future event, whether that is a new aircraft coming on the market, the end of a lease, or the sale or expansion of their company. It is often found that the event driving the decision has a specific date for closing, and this is also the desired date for the sale of the current aircraft.

As a seller of a corporate aircraft, the benefits of properly preparing a sound game plan for putting your jet on the market comes down to appropriate long-term planning. Such a strategy should be cornerstoned by a well thought-out business plan, which strategically takes into account market conditions and your company’s growth. Most importantly, knowing the true value of your aircraft in today’s marketplace is an essential first step toward a successful sale.

Today, the business aviation market is showing signs of life since the financial crisis. Industry activity points to a healthier outlook for 2016 than initially predicted, fueled in large part by corporations and the HNWIs who continue to set their sights on acquiring one of the ultimate symbols of convenience.

No matter the overall economic climate, selling a business jet can be a daunting task. A good broker will be responsible for providing the crucial relationship management to bring both sides together in a transaction. Further, when you bring the aircraft to market well ahead of a desired delivery date, you gain some additional elements of control of the transaction. An experienced advisor will present the most cost-effective ideas and approach in order to help your aircraft attract the right buyer, at the right time and at the right price.

Even with a desired date chosen, not all owners effectively plan ahead. A significant portion of sellers wait until the last minute, only to find themselves behind the wave in a changing market, thereby losing value and opportunity.

For example, if financial deadlines are driving your desire to sell—such as a tax deadline requiring the divestiture in a certain fiscal quarter or year—in many cases it is highly advisable to put it on the market sooner rather than later as the transaction process will take several months to complete. Likewise, if you no longer have a useful need for the aircraft and it is left grounded in a hangar or parked on a tarmac, it also should be put up for sale as soon as possible. A sale at this juncture is justified as the operational overhead and maintenance costs no longer make it financially viable, and outweigh any long-term future potential business use.

Finally, remember that you are selling an asset and whatever notable emotional connections engraved in the plane’s history with you— that business-altering contract signing, or the unforgettable holiday in the South Pacific— is not shared by the potential buyer or the market conditions.

As the seller, the benefits of being well prepared for an aircraft sale with a well thought-out approach that takes into consideration current market conditions and allows time to complete a transaction will always yield the result you’ll be happiest with.

Credit: AvBuyer and Jet Tolbert were a source of content.