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Top Tips for Jet Buyers and Sellers

Five things Board members should know about buying and selling aircraft in a recovery

Jay Mesinger   |   6th October 2015
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Jay Mesinger Jay Mesinger

Jay Mesinger is the CEO and Founder of Mesinger Jet Sales. With over 40 years’ experience in the...
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Since 2008 the market for business aircraft sales has been challenging, but Jay Mesinger suggests that things are changing and a recovery may be afoot. Here is his advice on how best to handle what he sees as an emerging ‘new normal’.

Now is the time to shift from business as usual based on the last seven years and start acting in response to something welcome and new—a recovery. Old habits are hard to break, but give it your best shot. Break those habits borne from recession; let’s learn some new techniques.

While both actions are fundamental to all transactions, buying and selling are distinctly different and have different perspectives. Sellers want to sell for more, and Buyers want to pay less. These two perspectives are not mutually exclusive, however. Both sides can come away with a feeling of accomplishment. Both sides can maximize their respective outcomes. Confident that we are entering a period of recovery, consider the following five useful tips for buyers and sellers.

Buying Jets

• Segment the Market: Never take a 30,000 foot perspective of a market. This viewpoint will lead you to have false expectations and possibly cause you to make decisions based only on selling price. Aircraft Price is a onetime thing. Cost, however, can be a lifetime thing. If you look quickly at a given market you might say, “Wow, there are 35 of those models for sale so we can steal one for sure”. The fallacy of that perspective in a recovery is that not segmenting the offerings correctly will leave you focused on the wrong areas of the selection process.

• Seek Professional Representation: Obtain smart representation  - a great aviation dealer or broker - when developing and responding to a Purchase and Sale Contract. Make the investment in hiring counsel for tax and contract support—that approach will never work against you. Complexity in this global environment begs for specialty representation.

• Engage Your Flight Department: Always consult your flight and maintenance professionals early in the purchasing process. So often aircraft buyers feel that too many cooks in the kitchen can spoil the meal. Wrong! Just be sure to have a Head Chef in the process. Then the outcome of the recipe will be positive.

• Conduct a Thorough Inspection: Never think that just because an aircraft has had a major inspection your own examination is unnecessary. Carefully review the work, know that the facility that performed the work is a factory authorized facility, and be sure that the corrective action (if any) was done to the manufacturer’s standards.

• Use an Experienced Maintenance Facility: Regarding pre-buy due diligence, always choose a shop that has considerable experience in the aircraft make and model you are considering. A good shop that is experienced with the aircraft model being inspected will not spoil a deal. They may cost slightly more than a run-of-the-mill facility, but they will have the capability to stand behind their work and deliver on their promises.

Selling Jets

• Segment the Market: Like the advice we offered above on buying jets, never take a 30,000 foot perspective of the market. This logic serves both the buyer and the seller. It is critical when you place an aircraft for sale that you understand how a buyer would view your offering. Run the segmentation exercise with your broker so you are not surprised by offers made. More importantly, like it or not, know when to say “yes” to an offer.

• Seek Professional Representation: Never approach a market without professional representation on your side. Paying a professional to provide this assistance typically will reward you with fewer days on the market and net you a higher price for your aircraft when sold.

• Present Accurate Specifications: Always be sure your sales professional has built specifications for your aircraft that are accurate and that properly represent your aircraft in its current condition. Be transparent about repairs or damage. Never omit these matters from early discussions with buyers. The worst time for buyers to find out about inaccuracies in specifications or damage repairs not disclosed is once the aircraft gets to a pre-buy inspection. Deals are lost, costs for sellers escalate and bad feelings will abound. Keep deals together with facts.

• Remove Vagueness in Agreements: Always strive for clarity and comprehension between yourself and the buyer. Leaving agreement details vague in hopes that this style will serve you in a transaction never works. Do not leave items up to interpretation by someone who appears to be a disinterested party to this transaction.

• Have On-Site Pre-Buy Representation: Never go to a pre-buy without on-sight representation present and engaged during the course of the inspection. Even if you do employ a maintenance director, insist that whomever you hire as your sales professional provides this oversight in their fee. Maintenance is one thing and is not meant to be minimized in this discussion, but selling is very different. Combining your maintenance staff with the broker’s transaction-savvy maintenance staff ensures usual and customary processes with successful outcomes.

There you have it: Use common sense. In the real world there are more than five tips for success. I could write a book for buyers and another for sellers, but space and time do not allow for that expansion on the topic. I assure you, however, that considering this article’s set of tips provides a reasonable certainty of completing a transaction successfully. Welcome to the recovery!


Read more about: Buying Jets | Aircraft Sales Trends | Used Aircraft Sales Trends | Jet Sales | Selling Jets

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