Providing a unique glimpse of the jet market from the perspective of those who buy, sell and operate business jets or offer expert advice, this month AvBuyer features the insights of Guardian Jets’ Mike and Don Dwyer…
Founded by Mike Dwyer and Mike Mikolay in the midst of an earlier dip in the market for business aircraft, since 2002 Guardian Jet (www.guardianjet.com) has applied its intimate knowledge of asset management to become a major player in the field of Business Aviation. Dwyer was previously Regional Sales Manager at several OEMs, and Mikolay an ATP type-rated pilot engaged in aircraft sales at Piedmont Aviation.
In 2010 a second Dwyer, brother Don, brought his significant sales experience (over 17 years with Hawker Beechcraft) to Guardian Jet. Today, the company staff numbers 22, including several full-time employees located in strategic US regions and most recently in the UK. The majority of Guardian staff is situated in Guilford, Connecticut, engaged in advising companies and entrepreneurs on financial issues involving fleet acquisition and replacement.
While Guardian Jet continues to be an active player in business aircraft transactions, numbering over 40 annually in recent years, the core of its value proposition is centered on how best to manage ownership of business aircraft as an asset for the corporate or the individual owner. In fact, Guardian Jet featured consulting service from its founding nearly 15 years ago as a means for differentiating itself from competing brokers.
Offering a branded educational experience it calls “Guardian U”, the company provides classes in what Aviation Department personnel need to know about finance and asset management, so that they can communicate effectively with their corporate direct-reports and better fulfill their role as managers of a company business unit. Also offered by Guardian U are courses in basic Business Aviation for corporate (non-aviation) personnel, so that they can better appreciate what business aircraft are able to provide for shareholders.
A sizable portion of Guardian U’s clients are personnel with Fortune 100 corporations. With that emphasis on consulting, it is understandable that the Guardian Jet Team includes seven with graduate business degrees, five Market Analysts, two CPAs and one IT professional, in addition to four holders of Airline Transport Pilot certificates.
“Our clients want to have aircraft that provide efficient transportation and represent smart use of capital,” notes Mike Dwyer. “Thus we follow pricing and evaluations very closely.
“We look at aircraft as one would look at an investment portfolio: what are the asset classes, what are value trends within the asset classes, and eventually what is the value of a specific asset (i.e., the aircraft within a company’s fleet). Rather than being reactionary, we advise our clients to lead the market.
“Thus we need market data. We pride ourselves at being in-depth researchers, probing and asking a lot of questions about the marketplace and matching those market realities to the expectations of our clients. We are always searching for real-time intelligence," Mike continues.
“We look at those factors that affect the liquidity of the asset—in our case the aircraft. Is the aircraft currently in production, how many were delivered, how many currently are for sale? Then we look within the asset class for the aircraft’s individual attributes. Is the specific aircraft desirable as is, or does it require new avionics, interior enhancements or exterior paint? In other words, is the asset—the aircraft—sufficiently attractive to be marketed promptly at a fair price—or is it a project that will require time and effort to sell?
“Yes, we track typical indicators such as percentage of fleet for sale, velocity of transactions, evaluation movement. Among the 123 models of business aircraft that we watch, we follow closely what the market is doing. But we look for more.
“Most importantly,” Mike adds, “we work diligently to understand our client. What is the motivation for owning a business aircraft, and what is the client’s philosophy regarding Business Aviation. Some companies want to fly the wings off their aircraft, maximizing the value of such mobility. Others seem fully content with holding an aircraft for a long time regardless of its evaluation dynamics and asset value.
"Different customers have different ways of looking at the aircraft they own or might own in the future."
“We also look carefully at other forms of Business Aviation such as charter and fractional ownership. Our mandate is to address the most effective means of satisfying the clients need for transportation using business aircraft, and managing those travel needs in a way that maximizes the value of the company’s aviation assets.”
“Some clients have an ‘enlightened approach’ to business aircraft and Business Aviation,” added Don Dwyer. “For example, in 2009 when Business Aviation was receiving a lot of bad press following the Ackerman hearings in Congress, we restructured the entire fleet of a Fortune 25 company because its management realized that there were excellent aircraft for sale at distressed prices.
“That company looked at its fleet strictly as a business asset and realized that there were great buys available. Thus our understanding of the client is paramount to our value as a consultancy.”
Big Picture Perspective
Reflecting on Guardian Jet’s approach to macro-economics, Don adds, “We watch what is happening in the overall economy—especially Fortune 500 companies. What are their profits and how are those profits trending? Where might the next merger occur? Fortune 500 fleets are downsizing—what does that mean and how do we capitalize on that trend?”
“There are opportunities everywhere,” notes Mike. “We adapt to market conditions and look for strategies that benefit our clients. The directions of the market and the overall economy have profound influences on fleet planning and the management of aviation assets.
"Thus it’s essential that Aviation Managers have a basic understanding of financial issues and, therefore, look at their company’s aircraft as assets to be managed effectively."
“Guardian Jet started ‘Guardian U’ specifically to give Aviation Managers an ‘asset management’ mindset. We show them how to look at the total costs of an aircraft over the life of the asset. That leads naturally to fleet planning. Asset management is, in fact, continuing fleet planning.
“Similarly, we offer ‘Guardian U’ to non-aviation managers within the corporation, so that they have a fuller understanding of why Business Aviation is essential. Such an approach better aligns the Flight Department with the goals, objectives and procedures of the corporation.”
“‘Guardian U’ is a key element of our value proposition, and it is very popular with our clients,” concludes Don. “The new reality is that Business Aviation is transportation that uniquely satisfies a need and is inherently beneficial to shareholders. That’s a good thing.
“Our clients have a spectrum of capable, efficient aircraft from which to select. There is significant value to be had and managed for the company that looks at fleet planning as asset management. We help our client benefit from that enlightened and educated perspective.”