- 23 Dec 2019
- Dave Higdon
- Helicopter Ownership
Michael Roberts shares insights with those looking to market and sell a helicopter. How can the asset be accurately represented, and how can the deal be structured to ensure the best outcome for the seller?
To sell a helicopter, you and your organization will need to fulfil many roles. From secretary, to marketing strategist, to import/export compliance expert, to babysitter – your goal is to facilitate the sale of your client’s rotorcraft from start to finish. But how can this be achieved?
Let’s take a closer look at the core elements needed for you to carry a deal to a successful closing.
Prepare All Data Ahead of Time
Your top priority before bringing any machine to market should be to compile all of the data a potential buyer may want to see. This might sound like common sense, but within your organization the vital information you need could be spread across several different departments.
Make a concerted effort to gather this data together in advance, before moving forward with marketing. Most sellers usually bring their helicopter to market with good intentions. They may plan to get the necessary documentation together within a week, but that can easily turn into a project that is still not complete when the helicopter is advertised.
We all have competing pressing matters vying for our time, and in the end best intentions can be forgotten. As a result, though, the seller’s helicopter won’t be a top consideration for any buyer because the buyer doesn’t have the information they need.
Realistically, compiling all the essential information can take time, and it is vital to making sure the client’s rotorcraft is ready for prospective buyers.
Create a ZIP File
Another seemingly common-sense step, but just as important, is to simplify how you respond to leads. Combining all of the helicopter’s logs into a single ZIP file allows you to reduce the files down to a manageable size that can be emailed and shared via Google Drive.
The person responsible for answering leads will now have a single, comprehensive document containing the machine’s logs (including photographs of hard-copy logs) which can be attached to an email in response to any potential buyer’s inquiry.
Holding all of the helicopter’s information in one place will make both your and the buyer’s job a lot easier, especially if you're selling to them internationally. Before they invest in coming to look at the helicopter in person, they can be presented with everything they need to know in a single file.
Take Great Photos of the Helicopter
You don’t have to be a professional photographer to understand what a potential buyer wants to see before moving forward with a purchase. The main points of interest for buyers include images depicting:
Ensure the photographs are clear and show accurately the aesthetics and the condition of the aircraft. Walk around the helicopter and take 20 to 25 pictures (these can be compressed and sent in a single email).
Buyers ultimately just want to get an idea of what the helicopter looks like currently, so fresh photos that were recently taken are essential.
As a marketing strategy, hiring a professional photographer is an option. Some people prefer touched up photos that appear more polished, but this is not essential to creating a quality helicopter advertisement.
Marketing Strategy and Advertising
The marketing strategy you choose will often depend on the individual owner or operator of the helicopter for sale. For example, I’ve had sellers request that I only sell their aircraft outside of their competitive region to prevent their competition from using their helicopter to secure local contracts.
In such a case, an international marketing campaign is preferable as my client needs to see the helicopter leave their region. Once you have a clear understanding of your seller’s needs, consider the following marketing options…
Directly Contact Potential Buyers: You may send the helicopter’s specs directly to people that you know could be potential customers; usually these are contacts within your own network. Alternatively, if asked, aircraft maintenance facilities may have customers who could be interested in the aircraft your client is selling.
Advertising on Relevant Websites/Publications: There is no need to list the helicopter on every site in the world. Do your research, selecting sites that offer high-quality leads. The same is true for print advertising.
Notifying Subscriber Services: Seek out research services such JETNET and AMSTAT, which keep track of the worldwide fleet of non-military jets and helicopters. When you inform these subscriber services that a helicopter is for sale, the information will be circulated among their dealer and broker network of subscribers.
Email Marketing Campaigns: Some organizations, including AvBuyer, hold a list of persons who are in the aviation industry. For a nominal fee, these companies will create a mass email campaign to distribute among the opted-in recipients on their list.
The Logistics of Setting up a Deal
By this stage in the process, your goal is now to move the buyer towards making an offer. Throughout this process, you’ll want to keep the following steps and options in mind.
Vetting Your Buyers: When a buyer approaches you, aim to be the most efficient and professional broker they receive information from. Find out what that buyer’s needs are and determine if they're serious enough about buying from your client.
Entering Into a Contract: If the buyer makes an acceptable offer and you’ve settled on an agreement, you can begin to write up the basic conditions of the deal. You may choose to go directly into a contract if both parties are on the same page. Use a contract template and customize it to align with the specifics of your deal.
Setting Up an Escrow: Over 90% of all the deals I’ve ever done have been through an escrow company. Setting up an escrow prevents a lot of headaches because the escrow company's job is to be neutral. They will follow the specifics of your contract and simultaneously release the money and the documents needed to transfer the title of the helicopter.
Direct Exchange of Funds: It is also possible to facilitate a deal where payment is exchanged directly from one operator to another. In a case like this, it is reasonable for the broker to bill for commission afterwards.
Parameters of the Inspection: The majority of deals require an inspection. Do not move forward with an inspection until the potential buyer has made a commitment in writing, or paid a deposit.
Clear steps and expectations should be set up ahead of time to determine how and when an inspection will be carried out. Thoroughly discuss the scope of the inspection (the last thing you need is for an unknown party to come in and disassemble your perfectly maintained helicopter over the weekend).
Details of the Contract
From my experience brokering both helicopter and fixed-wing aircraft, I have encountered damage during inspections, late payments, registration disagreements and components of the aircraft going missing.
The problems I've had to solve while closing aircraft deals will give you an idea of why a professional and detailed contract is so important.
Damage During Inspections: On one occasion, when a repair station was completing an inspection for one of my clients, they dropped the aircraft on the ground causing serious structural damage.
Since I was working for the seller I needed to manage the situation in a way that would allow me to do the job I had promised to the seller. However, a section of the contract stipulated that if the aircraft was damaged during an inspection the buyer had the right to walk away with their deposit.
On behalf of the seller, I was able to convince the insurance company to promise in writing that the aircraft would be repaired to its original, airworthy condition. This was enough to seal the deal with the buyer. The aircraft was fully repaired, and in the end, the buyers flew it for years afterward without incident.
If I had been the buyer's broker, perhaps I would have advised them to walk away from the deal. Remember: there are always two sides to any situation, and then there's the contract. As long as the parameters of the contract are respected, all parties should be protected.
Late Escrow Payments: I’ve had people pay into escrow several weeks later than they originally agreed, putting everybody involved on hold. Yet, in these cases the seller still doesn’t want to lose the deal and may agree to give the buyer a few more days. The key to managing late payment situations is communication.
At the beginning of any deal, part of vetting a buyer includes observing their habits. If the lead starts out with a pattern of lateness and excuses, then the buyer may not be ready to commit but could be struggling to communicate that. Try to address this issue as soon as possible to reduce the chance of late escrow payments.
Problems can also arise that aren't necessarily in the paperwork requiring both flexibility and creativity.
Missing Parts: Emotions can run high when dealing with million-dollar transactions. Your clients may become hung-up on all sorts of mental distractions that are not essential to the deal.
For example, many hundreds of emails once passed between a client and me regarding ground handling wheels that were originally photographed on the helicopter of interest. These ground handling wheels had gone missing. No one involved knew whether those wheels belonged to that aircraft, if they were only borrowed for the photo, or if they belonged to another aircraft altogether.
It became the biggest headache and I lost much productivity going over the same issues again and again with my client. In a circumstance like this, it’s important to know that it may be worth simply gifting the item that went missing. Even if it is not your responsibility to cover the cost of doing so, your time and productivity can be more important elsewhere.
Changes to the Timeline: Very rarely does everything fall exactly on the dates agreed in the contract. As with a late escrow payment, some flexibility should be allowed.
However, your goal is to close the deal. If milestones aren’t being fulfilled anywhere near the dates in writing, you will need to check in with the buyer and ask why.
Having all sides comply loosely with the agreed-upon dates will allow the deal to be closed within a reasonable timeline.
Preparing a helicopter for resale requires you and your company to be both flexible and multifaceted in your skillset. Whether you are de-escalating an argument between two parties, or reviewing a 24-page aircraft sales contract on the fly, your goal should always be to close the deal in an amicable, timely way. Prepare your data ahead of time, understand what’s in each contract, and know when to walk away from a disagreement.
More information from jetvend.com