Industry Insights

Selling an aircraft does not have to be an overwhelming endeavor. Keeping in mind the proper pre-sale procedures and knowing what pitfalls to avoid can make the selling process simple and eliminate unnecessary hurdles. Here is our advice on the most common mistakes sellers make and how to avoid them.

Setting an Accurate Valuation – A common mistake made by sellers is not knowing the true market value of their aircraft, ending up with unrealistic price expectations. Sellers should not base pricing solely on upgrades, Bluebook / VREF values, cosmetic changes, and listings that seem similar to their own. Sellers should carefully consider real-time market trends and changes. It is critical to use specific data about the subject aircraft – its condition, maintenance and usage history – to set an accurate figure. Valuations are also critical prior to performing any upgrades or cosmetic changes to best understand what features will help aid in the sale of the aircraft.

Set a Realistic Timeline – One of the most common issues where sellers misstep is establishing a realistic timeline to closing. Many think the process from the signing of the Letter of Intent (LOI) to closing should take only a few weeks, when in reality it could be longer. To avoid extra stresses and pressure, work with a transaction specialist and plan ahead to ensure that a realistic timeline is set, especially if there is an upcoming event like the end of a lease or new aircraft delivery. Also, try not to deter a buyer by pushing too hard for a closing, and be open to a compromise so that both parties can feel good about the transaction.

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This is an exciting time for business aviation in Europe, as echoed this month at EBACE 2017. Europe has quality aircraft priced correctly and good market conditions that are attracting the western buyer—great news for the European seller. Last year, the best fiscal year in our company’s 55-year history, Europe accounted for approximately 20% of our annual transactions.

The recent election of a new president in France is beginning to chip away at some of the uncertainty surrounding the European business aviation sector’s longevity. In addition, the recent German, French and United Kingdom high stock markets results are also paving the way for transactions. These conditions, along with the euro increasing while the U.S. dollar continues to fall, has flushed Europe with motivated sellers. What this means is Europe has plenty of sellers with aircraft that are attractive to buyers in the region and in North America, and sellers that can benefit from the current currency situation....

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Private aviation, especially in today’s chaotic and often stressful travel environment, offers many benefits for both leisure and business travelers. But how do you decide when to invest in chartering, or whether you should purchase a private aircraft? Here are some parameters to keep in mind when weighing the options of chartering versus buying.

Advantages of Chartering an Aircraft

If you only fly private a few times a year, then chartering can be a more economic choice. With numerous charter options available today, you can choose exactly the type of plane that fits your travel needs for each specific trip. Keep in mind these three benefits to chartering an aircraft:

Flexibility—a charter affords you the ability to decide when, where and how to fly. In the end, chartering is ideal when flight usage is sporadic and needs are difficult to predict.

Variety—chartering offers the option to choose from various aircraft configurations for every flight. Charter companies,...

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The Asia-Pacific market continues to show signs of business aviation growth, and we are tracking promising activity throughout the region. Jetcraft’s 10 Year Market Forecast predicts Asia-Pacific will remain one of the most active of the emerging markets (and the third-largest business aviation market behind North America and Europe), accounting for 10% of unit deliveries from 2016-2025 (789 units). As we closed 2016, the best year in our company’s 55-year history, Asia-Pacific accounted for approximately 20% of our results, on par with Europe.

One of the key drivers for Asia-Pacific’s business aviation sales activity, from our perspective, is a greater acceptance of pre-owned aircraft among buyers as well as an increase in the number of first-time sellers in the market. It remains a region where buyers are inclined to purchase new aircraft, but there is a significant shift in attitude, where buyers are acquiring pre-owned aircraft in greater numbers and with growing confidenc...

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The business aviation industry today is showing continued signs of growth, and improved business conditions are creating a favorable environment for individuals and corporations who may have postponed such transactions during the economic downturn to again consider making the high-value investment of procuring an aircraft.

As with any purchase, paying cash is the easiest way to close a transaction. Another option may be for owners to complete an aircraft trade-in transaction which can free up capital so the owner can move more quickly toward acquiring a model more suitable for their changing needs. Some experts, however, advise that even if an individual or corporation has enough cash available or an asset they can trade in, it may make more financial sense in certain instances to either finance or lease the aircraft.

Many aircraft financing institutions focus on the ability of the client to repay the financing. It does not mean they do not care about the aircraft itself, but r...

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Written by Mick Doohan, Authorised Sales Representative, Australia/New Zealand
[email protected]

It is no secret that flying private has its advantages over commercial, but how can a company convince its stakeholders of acquiring and maintaining such a large corporate expense?

In most cases, it comes down to saving time and increasing productivity—two factors that always resonate with a company’s board of directors.

Difficulty in gaining buy-in for a corporate jet can stem from many areas: concern about appearing extravagant, stakeholders objecting to such company spending or potential negative public relations issues, as some corporations have experienced in the past. But the benefits of private aviation in most cases can outweigh such concerns and justify executives flying via the company’s private aircraft as ultimately being a highly beneficial business decision.

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Written by Chris Brenner, Jetcraft's former SVP-Sales, Americas

In today’s competitive market for selling aircraft, one of the easiest and fastest ways for owners to upgrade is to complete an aircraft trade-in transaction by working with a partner who has the capabilities to facilitate a trade-in and has an aircraft that the seller is interested in purchasing. Transaction specialists such as Jetcraft offer sellers a representative with the ability not only to market their aircraft to a wide audience of potential buyers, but also provide them with an immediate buyer (themselves) if another can’t be found quickly. Jetcraft can also offer a replacement aircraft from its current inventory or may be willing to bring another aircraft into inventory that better fits the buyer’s mission.

Once a seller shows interest in a trade-in process, the seller’s aircraft’s trade-in value will be established, as well as the price of the new aircraft. In such a case, an agreement can be cre...

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Last month we closed another successful presence at the NBAA 2016 convention and exhibition. Despite well documented market challenges and the then-looming US elections, the audience, transaction conversations and number of quality attendees were well above even our own reasonably high expectations.

Through the client and prospect conversations we had at our static venue, we saw that most in the industry remain upbeat and on-track with their aircraft acquisition plans. As we have stated often through this year, there are deals out there and business transactions continue at a solid pace. Jetcraft remains on track to close another record-breaking year, making 2016 and 2015 the two strongest years in our company’s history.

Financing and the US Election

Even though business is continuing at a solid pace, and the majority of our NBAA interactions were positive, a few conversations did raise a few concerns that some buyers and sellers in the industry might wish to keep their eye...

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Written by Chad Anderson, Jetcraft President
[email protected]

The continued unpredictability of the business aviation sector and the impact of certain world events throughout the past 12 months have directly impacted our long-term growth outlook for the business aviation sector. Accordingly, we adjusted our predictions of deliveries and revenues in our recently released 2016 Market Forecast from last year’s projections resulting in numbers that now point to 7,879 unit deliveries worth $248 billion, from 8,755 worth $271 billion in 2015.

To get a clearer view on what is contributing to these deliverables and revenues projections, we took a closer look at macro-economic issues that will impact the state of our industry over the next ten years. Specifically, our 2016 forecast compares how the private jet aviation sector’s business will fare against certain economic trends– a slowdown in wealth creation, the migration of ultra-high net worth individuals (UHNWIs) from emerging market economies and the fluctuation of oil prices – as well as how our industry’s growth compares with past business cycles.

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