AINsight: Raise Your Hand If…

 - October 2, 2020, 12:43 PM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.


No this isn’t an interactive Zoom article. I really won’t be able to count the raised hands as you read this, but if you keep a little scorecard of how many times you raise your hand as you read, I think it will give you a new perspective of what we are all going through during these strange Covid times. So here we go:

Raise your hand if you believe that your opportunity to talk to people about business aviation has increased over the last couple of months. This is not about strictly being in the preowned aircraft brokerage side of our industry. This means, simply, in the course of your daily conversations. You can be on the management side, the insurance side, the maintenance side, or even if you are an operator of a business aircraft and are talking to your associates.

Raise your hand if you believe that demand is increasing for people really wanting to buy an aircraft for the first time. After all, the first-time buyer is and always has been the growth opportunity for our industry. I have always said when an aircraft is sold to a first-time buyer, pilots get hired, insurance is sold, hangars get rented, maintenance gets performed, and a whole cycle of business aviation activity gets started.

Raise your hand if you believe that rising demand will affect the price of aircraft upwards. This is an interesting one. Except during the rise of the emerging markets when the BRIC countries, the Middle East, and Russia were coming into the market and the exploding demand caused premiums to be paid on new and like-new aircraft, previous recoveries merely slowed the residual loss rate of the economic event.

They did not create enough demand to send prices back up to the pre-event time period. And as we currently see the surge in activity from first-time buyers, we also see a retreat in acquisitions from corporate flight departments, thus maintaining a balance in supply and demand that will keep prices from rising.

Raise your hand if you believe that once we start to really gain traction in reopening the economy, as well as confidence returning to the consumer to revert back to commercial flying, the phenomenon of the first-time buyer coming into our market, with such rarely before seen vigor, will settle back to a more normal ratio.

Over the years when the economy was not struggling with pandemic like events, we at Mesinger Jet Sales probably had a percentage of our overall acquisition business of about 25 percent from first-time buyers. Today, during this pandemic event, we are dealing almost exclusively with first-time buyers. Truly an exciting time for our entire industry!

Raise your hand if you would like to have an indoor dinner party; get on an airplane and go to some exotic trip with your best traveling friends or family; go to your favorite restaurant for an evening of joy and laughter and great dining; and hug your children and grandchildren!

Now add up your score and analyze the answers. I look forward to your comments from this article—write to me at jay@jetsales.com. I will report to the readership everyone’s scores next month.