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Nearly everyone who travels on business periodically passes through Dallas- the crossroads of America- at some time. In a prime example of the old real-estate axiom- one reason the region sees so much travel traffic is its location. As an illustration- Dallas/Fort Worth International (DFW) handles the combined throughput of two major commercial carriers’ hubs- American and Delta.

Dave Higdon   |   1st August 2002
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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Bombardier’s in-house resellers blend strengths to move trade-in and Flexjet-retiree fleets.

Nearly everyone who travels on business periodically passes through Dallas- the crossroads of America- at some time. In a prime example of the old real-estate axiom- one reason the region sees so much travel traffic is its location. As an illustration- Dallas/Fort Worth International (DFW) handles the combined throughput of two major commercial carriers’ hubs- American and Delta.

Another location-based example exists southeast of DFW at nearby Love Field (DAL)- headquarters and home-state hub of Southwest.

Rounding out the location-oriented contributions to the region’s high-volume throughput of business travelers is business aviation. Indeed- no less significant than the commercial carriers to the DFW Metroplex is the significant volume of business aviation traffic that passes through Love- Dallas Redbird- Fort Worth Meacham and Addison (ADS).

Much of that business traffic comes courtesy of Bombardier’s fractional operation- Flexjet- based a few miles north of Love at Addison Airport.

It was the convenience of the Dallas region that three years ago prompted Bombardier to establish its newest venture in the Metroplex: Bombardier Pre-Owned Business Aircraft.

With offices only a few minutes from both Love and Addison- Bombardier’s in-house business jet reseller gives its clients a leg up by specializing in Bombardier-built products accepted as a trade toward a new model Global Express- Challenger- Continenatal or Learjet- plus jets cycled out of the highly successful Bombardier Flexjet program.

Already a hub of business aviation operations- ADS sported no fewer than three major FBOs before Flexjets brought its fleet to Mercury Air Addison. Among the dozens of operators and businesses ringing the airport perimeter are a little of everything from flight schools to maintenance shops- 135 charter operators- 125 cargo carriers- and a smattering of everything in the way of maintenance.

Flexjet operations always seemed perfectly in-sync with the rhythm of the airport too- with crew able to come and go with relative ease while retaining the level of client experience fractional customers tend to demand.

Apparently- the blend of handling known products and geographic convenience works. As it approaches the three-year mark- Bombardier Pre-Owned Business Aircraft has moved more than 200 airplanes for its corporate customers. That success- according to the head of Bombardier Pre-Owned Business Aircraft- stems from understanding the need of its clientele – whether the client is a buyer seeking a value deal on a business jet- or is one of the reseller’s corporate cousins- working to stay competitive.

Knowing the product and customer
“Dallas is a connection point to about anywhere in the country or the world at-large-” explained Mike Zabkar- vice president and general manager of Bombardier Pre-Owned Business Aircraft. “Dallas has been a great place for us.”

The ease of moving planes between Dallas and Bombardier delivery centers in Tucson- Montreal and Wichita makes managing refurbishment projects easy- an issue since most of the company’s inventory undergoes some degree of work.

The availability of vendors and suppliers to perform refurbishing work and upgrades also aids in making an efficient operation. And the ease of connecting with prospects – whether they come in by common carrier or the business jet goes to them – closes the loop on the advantages Zabkar cited for his operation. The proximity to the Bombardier Flexjet base adds to the benefits.

With these regional advantages well known and understood by Bombardier’s executives- there’s little surprising about the decision to base this resale business in the Dallas Metroplex. Yet mere location falls short of contributing everything needed to make Bombardier Pre-Owned Business Aircraft successful.

To enjoy this level of success- an operation of this type needs people knowledgeable about customer needs- who know airplanes and what might satisfy those needs- who know how to manage the process of refurbishing the birds and who can bring together these diverse- complementary skills.

If any aspect alone could be singled out for special attention- it would be the quality of the planes available for sale by Zabkar and his diverse staff of nearly 30 people.

“The purpose of forming Bombardier Pre-Owned Business Aircraft was to combine wide- and narrow-body resale efforts into one efficient unit to manage all re-sales-” Zabkar explained. “We’re a combination of sales offices that used to be in Hartford (Challenger and Global Express) and Tucson (Learjet).”

After three years of operations- the staff of 29 includes six sales directors; eight chiefs of maintenance; a manager of maintenance; four on the contracts staff and another four in finance; a research staff of two; an administrative staff of three- and of course- Zabkar. “We’ve grown with the times-” Zabkar said.

So have sales - last year the resale shop handled about 55 aircraft- for 2002 the total tally should reach somewhere between 90 and 100. Indeed- the rotation cycle of Flexjet hardware grows- as should sales of former Flexjet aircraft.

“Last year about 25 percent of our production involved former Flexjet airplanes and that share should remain stable as we grow this year-” Zabkar said.

In addition- Bombardier Pre-Owned Business Aircraft enjoys some distinct benefits from its parentage.

Insider trading Has Its Benefits
Often- parentage brings with it distinct advantages to a child that come through professional affiliations and family friendships alike. Bombardier Pre-Owned Business Aircraft enjoys the ability to apply some of those same benefits to its mission of connecting operators in need with aircraft in need of moving.

For example- unlike many resellers- the staff at Bombardier Pre-Owned Business Aircraft knows years in advance what airplanes it must move- the timeframe of those planes’ availability and the condition they will be in – a benefit that comes from the shop’s affiliation with the manufacturers. When the sale of a new Learjet- Continental- Challenger- Global 5000 or Global Express includes a future trade-in- the incoming plane becomes part of the future inventory of Bombardier Pre-Owned Business Aircraft.

“With this information we can better manage the work needed to refurbish the products we offer and start trying to match those planes to customers even before we have an airplane in-house-” said Zabkar. “We’re in a great position to match the airplanes to the customers to the ultimate benefit of seller and buyer alike.”

Even better- with refurbishment and upgrades planned for all incoming Flexjet airplanes and many trade-in craft- the ability to schedule multiple projects so far in advance makes the entire process highly efficient.

By knowing the products coming in and the work they need so far ahead of time- Bombardier Pre-Owned Business Aircraft enjoys substantial leverage in helping buyers fulfill their needs ahead of a competing reseller.

The result is that many incoming jets are sold well ahead of their availability – which gives the company yet another advantage to exploit: The ability to work the refurbishment process in consultation with the new owner. Taken together- the combination of known stock- known condition- and known needs makes the company’s package highly competitive.

Pre-owned Bombardier buyers get one-owner jets
Bombardier Pre-Owned Business Jets not only enjoys the advantages of offering known stock- the company also reaps the benefits of knowing that those jets are typically one-owner jets – albeit jets with above-average time- where the FlexJet hardware is concerned. In reality- through- the 20 percent to 25 percent higher airtime on the FlexJet airplanes usually doesn’t work against the aircraft’s market potential.

For example- the former FlexJet airplane is completely refurbished- with new interior- carpet and paint – often to the customer’s own specifications when an airplane is pre-sold. “And that one-owner airplane has been maintained to the highest standard by people who really know Bombardier business aircraft-” noted Zabkar.

FlexJet airplanes all enjoy exceptional treatment at the hands of service technicians as the factory and factory-authorized service centers. “That maintenance history leaves virtually no questions about the airplane-” Zabkar said.

Additionally- FlexJet airplanes enjoy the advantage of coming out of their respective factories – whether in Wichita- Montreal or Toronto – with above-average equipment levels.

“Compared to other- more bare-bones airplanes- the equipment level typical of our airplanes is another benefit we can offer our customers-” explained Zabkar. For example- the typical Learjet 31A doesn’t have TCAS. “What with TCAS II (Change 7) coming- with TAWS- GPS and RVSM in the mix- all that gear adds up to make these airplanes good value.”

“And then- there’s the re-sale package we put on our own aircraft.”

That ‘package’ provides another level of value for the potential buyer: A full factory warranty- for example; pilot training; even the first 300-hour inspection.

“We also include the services of our Skyjet charter operation so that the new owner can get two to four hours of charter time at the first scheduled-maintenance cycle to help keep them mobile-” Zabkar explained.

Still- closing the loop on a prospective sale of a former Flexjet aircraft often requires a little extra show-and-tell- Zabkar admitted.

“When we have some resistance- it’s usually from the guy who can’t psychologically get his mind around buying a 5-000-hour airplane.

“More than once we’ve taken a reconditioned Flexjet airplane to show a customer – after they rejected the airplane on the basis of how it looks on paper-” he explained. “They see the number of hours and the price- and assume that it can’t be as good as it presents in person- so we’ll tell them we’re bringing another airplane to see.

“Usually- they want the airplane and let us know by saying- ‘Now this is what I had in mind.’ That’s when we tell them it’s actually the same plane they thought they didn’t want- to their surprise.”

Given the 200-plus airplanes already moved by Bombardier Pre-Owned Business Aircraft- there seems no room to doubt the success of the combination of methods- products- knowledge and location. However- another element of that success involves knowing where to draw lines defining the limits of the company’s efforts.

Knowing your limitations
“Typically-” Zabkar noted- “we do not take trades on trades. But we do have one of our people exclusively dealing in competitors’ airplanes.”

What that means to the potential customer of Bombardier Pre-Owned Business Aircraft with a Citation- Hawker- Gulfstream- Falcon or Beechjet- is that they can still find a suitable airplane with a good-value package through Zabkar’s shop.

“We’ve generally been able to move [other manufacturers’] airplanes or make things work out for the customer so that the trade they want to make is not an issue-” Zabkar explained. “This is an area where we can tap the network of NARA members and other resellers.”

Bombardier Pre-Owned Business Aircraft routinely taps members of the National Aircraft Resale Association for their expertise in engine- avionics- interior and paint. With a bit of coordination among the other company- the seller- and a buyer- the aircraft in question often goes directly to the new operator without making a stop at Bombardier Pre-Owned Business Aircraft or the other reseller involved.

“We serve only as a go-between- making a connection between folks in a very active network-” noted Zabkar. “And that works to the advantage of everybody involved.”

What really works out is the benefit to Bombardier Pre-Owned Business Aircraft by enabling another transaction that connects one of its inventory with a buyer in need of a Bombardier business jet.

Location sensitive?
Together- the combination of known products and knowing customers help make Zabkar’s operation the success it’s become- underlined by the sale of more than 200 airplanes in three years- 20 to 30 airplanes in the pipeline at any given moment and a reach that spans the world.

“Right now- we’re working with a lead-time that helps to maintain connections to markets in Europe and South America – locales in which Bombardier Pre-Owned Business Aircraft maintains offices and staff.”

Zabkar maintains a “global view” of the business jet market- rather than focusing on the U.S. and only working international as an aside or when an overseas-based customer shows up. “As a result- our Paris sales office is extremely important-” he stressed. “Europe has been extremely good for us.”

“We also have a guy- Ray Santa- in our Dallas office devoted to handling Mexico (the number three market behind U.S. and Europe)- as well as Central and South America.”

“We try to keep from importing (jets) to the U.S. when resale overseas might incur an export issue and added expense.”

Bombardier Pre-Owned Business Aircraft also keeps a maintenance chief for Europe based in Berlin.

The maintenance oversight helps both in selling and servicing- by giving customers help they need to embrace new regulatory demands on the Continent. For example- the company’s European staff set up a customer’s Learjet 60 for JAR ops. “And-” Zabkar added- “we’ve had some Learjets coming off Flexjets Europe and we’ve got some 45s coming out of Flexjets to go over that we’ll help prep for RVSM.”

In for the long-haul
As things stand today- with Bombardier’s new-aircraft trade-on commitments and Flexjet rotations ongoing- Zabkar’s shop already has an inventory to work stretching well into the future. Still- the question many ask concerns market conditions over the next two to three years.

“Things may get better for some models while for others- they may get worse-” Zabkar conceded. But overall he believes that stability seems to be the status for the future of business jet sales.

“I don’t see us getting back to the price frenzy of ’98/99- what with the end of the market boom and the dot-com implosion.”

“We’re pretty much back to the stable core of airplane buyers and companies that want the purchase to make sense.”

Still- buying interest has started to pick up and he sees at least 12 to 18 months of stable business ahead.

“Some of the fractional clientele have now got into the airplane-owning business after learning that they could use more than a share and get more value by owning the whole plane-” said Zabkar. “So- prices are stable at where they’re going to be for a while as demand remains steady.”

Regardless- Zabkar and his staff intend to remain competitive in their efforts to match quality pre-owned business jets with customers best suited for the airplane. “Synergy between all of our departments throughout Bombardier allows us to provide our clients with full transportation solutions-” Zabkar stressed.

Between the planes he offers- the advantages of the Skyjet on-line charter booking organization and the standard resale package- Bombardier Pre-Owned Business Aircraft is able to help operators find airplanes they can keep busy- contributing assets. And no matter what your location- that’s a package of benefits many savvy buyers would like to embrace.

MI: www.bombardierpreownedaircraft.com

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