AINsight: And Now for the Rest of the Story…

 - November 1, 2019, 10:50 AM

In a distinct voice and delivery, radio announcer Paul Harvey would share a story on the air and then at the end, after a brief commercial announcement, he would say, “And now for the rest of the story.” He then would neatly wrap the story up with a nice bow.

Since many of you are directly or very closely tied to the transaction side of the preowned aircraft business, allow me—as an aircraft broker—to tell the rest of the story.

Every day I come to work to answer and make calls and provide clear, concise information geared toward making a transaction on one of the airplanes we are representing for sale or one of the airplanes we are trying to acquire on behalf of a client.

It seems to be that more and more in the past six months or so, business is getting more difficult for aircraft sales professionals to gain traction. This phenomenon I am about to describe typically takes place when discussing a deal with a broker or consultant out of this country, but not exclusively.

The discussion, which is occurring more frequently, goes as follows: after many conversations with the other side’s broker or consultant, sharing specifications or technical data about the aircraft, and having many very candid and transparent discussions about price, the other side’s representative will finally say, “Oh by the way, we will need to be paid!” They go on to say that their side is not going to pay them a fee and they will need our side to pay them.

This seems so disingenuous since they obviously knew this from the inception of their hunt for an airplane or from the inception of their telling us about an airplane to buy. To allow the conversations to progress and include what is such candid pricing intelligence to only then throw in a compensation discussion leaves everyone on our side feeling that they have not been working in the same good faith as we have.

In fact, to go on to complete the rest of the story, when our side asks the broker or consultant if we can disclose this payment, they more often than not say it cannot be disclosed. This could border on commercial bribery if the person that will be paid is employed directly by the buyer or seller of the aircraft.

We as an industry must weed out these violations of high ethical behavior and transparency. As a group of mostly good actors, we must work collectively and treat this behavior for what it is.

We must demand that we know the rest of the story first, not last, so that we are not distracted by this methodology. It is not okay and it cannot be construed as the norm of our industry. Our respective clients must feel good about how our industry conducts itself.