Richard Emery, COO, Mente Group shares his Business Aviation market observations
Business Aviation Insider Interviews provide a unique glimpse of the market from the perspective of leaders who buy, sell and operate aircraft or offer expert advice. This month, Richard Emery, Mente Group shares his thoughts…
Living every day within the real world of Business Aviation, professionals such as Richard Emery II, Chief Operating Officer of the Dallas, TX-based Mente Group, detect the slight shifts of conditions that foretell bigger events; bellwethers of future developments that shape the supply and demand for goods and services related to the use of General Aviation aircraft for business transportation.
As COO, Mente Group, a consulting organization offering technical and operational advice as well as brokerage services to corporations and high net worth individuals, Mr. Emery represents the third generation of his family to engage in Business Aviation. Emery joined Mente Group after many successful years in senior positions with several OEMs, most recently as President of Beechcraft Corporation’s European, Middle East and Asia division.
Unlike traditional brokerage companies, Mente Group approaches business aircraft transactions from a consulting perspective. Their analytical services include feasibility studies: should a company embrace Business Aviation and, if so, what form ranging from full ownership to charter—or combination of those delivery systems—would best satisfy the transportation needs of the client.
Fleet planning is also a core competency, as are operational and financial analysis. Technical support is provided to assist clients with aircraft appraisals, pre-purchase inspections and completions. Mente Group offers clients its proprietary “360 Program” whereby Mente Group experts are retained to address client questions and report on activities that facilitate continuous improvement of flight operations.
Such retainers are typically initiated by the client’s Aviation Director, explains Emery, adding “we always make every effort to include the Flight Department in our services to our corporate clients”. While brokerage and acquisition services continue to garner approximately two-thirds the Mente Group’s revenues, client contact typically starts with a consulting engagement. Discover more about Mente Group via www.mentegroup.com.
Emery is “cautiously optimistic” about the market for Business Aviation. “This year and next may be difficult, but we anticipate growth thereafter,” he elaborates. “As the airlines continue to structure their business models to serve major hubs, the transportation needs of business increasingly are not satisfied. The demand for Business Aviation is growing and will continue to grow.”
Noting the cyclical nature of new aircraft sales, Emery expressed his belief that the production schedules of OEMs [exasperated by the considerable lead time required to procure key components and the difficulty of starting and stopping manufacturing lines] have resulted in over-overcapacity with respect to today’s demand, particularly among midsize and large aircraft.
“Because of considerable demand in recent years for large-cabin, long-range aircraft, we now see many models available—perhaps too many different designs with possibly too little product differentiation,” he notes.
“Hopefully OEMs will rationalize the market, leading to increased buying in the not-to-distant future. I believe there is an issue with the large number of models being offered at this time, however.”
Emery also observes the changing nature of buying habits of entrepreneurs and corporations. “Whether we were dealing with individuals or companies, there appeared to be a bright line several years ago between those who purchased new aircraft and those who sought pre-owned aircraft. That line, if it exists now, is considerably blurred.
“Today’s client looks at the totality of Business Aviation as a means for providing efficient transportation. Buyers who historically looked only at new equipment now are also considering young pre-owned aircraft.
“There is a whole generation of potential purchasers of aircraft who are basically looking for transportation—efficient and obviously safe transportation of people. For that individual or company, the whole spectrum of business aircraft—new, pre-owned, fractional—holds their interest. Today’s buyer is taking a ‘big picture’ approach to transportation via business aircraft.”
“Today’s buyer demands cabin connectivity that enables passengers to be productive while traveling,” Emery adds. “Consider the impact of cabin connectivity on the charter market—without the ability to offer in-flight use of email and internet, the charter provider is at a distinct disadvantage. Flight departments also demand such capabilities.
“Today’s buyer seeks aircraft that link passengers with their ground-based clients and associates, or they retrofit their purchase with the needed equipment. At the Mente Group, we have the experts who listen to our clients, understand what they need and assist with implementing the level of connectivity they desire.”
Emery sees today’s market as driven by the need for transportation. “Business Aviation provides a travel capability that is not being met by the Scheduled Airlines. There is a whole generation of buyers who are simply seeking the most efficient and effective use of time to reach their customers and capitalize on opportunities,” Emery concludes. “That buyer looks at Business Aviation holistically and seeks the best travel solution.”