AIN Staff

From cars to boats to homes and everything in between, all of us have bought and sold countless things in our lives with little or no consideration for the fine points of the deal. What can go wrong?
While personal experience may be all we need most of the time, that DIY approach can be problematic when we try to navigate the uncharted waters of the business aircraft market without the guidance of a seasoned aircraft broker. Doing that is like a student pilot trying to land a jet. It’s a lot easier with a trained professional in the right seat.
Even if you had, say, seven or so years ago, successfully transacted the purchase or sale of your latest airplane, so much about buying and selling airplanes has changed and continues to change every day.
“One of the biggest differences is there are many, many more aircraft models that a buyer can choose from today,” explains Rene Cardona, a longtime member of Duncan Aviation’s Aircraft Sales and Acquisitions team. “The industry’s growth has meant a tremendous array of aircraft models that are suitable for a particular mission type.”
“For example, with the right avionics upgrades and fresh paint and interior, a 20-year-old jet is just as capable as a newer model for many missions,” he continues. “But that doesn’t mean that older airplane is the right choice for every buyer.”
“Today, many older models, as capable as they may be, have really started to decrease in resale value,” Todd Jackson, vice president of acquisitions for Elliot Jets (the aircraft sales division of Elliott Aviation), adds. “The depreciation on these models has accelerated quite a bit. And while prices have not yet returned to pre-COVID levels, they’re getting there.”
“The earlier value run-up we were seeing across the board was crazy, and now it’s coming back down,” he continues. “The volatility of aircraft value and pricing can catch a buyer or seller off-guard, which can cost them a lot of money.”
It’s too true. According to our experts, these past few years have been textbook “seller’s markets,” with little or no room for negotiations. But as you might expect, the pricing pendulum is swinging, so sellers aren’t as bullish today.
And it’s not just the physical aircraft market that is in flux; so are the people who are looking to buy or sell their airplanes. The post-pandemic “airplane rush” brought a lot of first-time buyers into the market, and their expectations are different from those of the more “traditional” business aircraft operators.
All this has transformed the seemingly simple act of buying or selling an airplane into a multidimensional transaction that requires a level of market savvy that only a professional business aviation broker could possibly possess.

An experienced broker pays attention and advocates for your best interests in an aircraft transaction, helping aircraft owners/operators make well-informed decisions that minimize risk, while maximizing the return on their investment.
—Rene Cardona,&nbsp;Aircraft Acquisitions Manager Duncan Aviation

<h2>Buying or selling, a broker’s got your back.</h2>
Why do you need a reputable aircraft broker? Well, consider the plight of our aforementioned student pilot trying to land a business jet in zero visibility. Had the aircraft they were piloting been equipped with Garmin’s revolutionary “Autoland” technology, a simple button push would have solved their landing dilemma.
It’s kind of the same with hiring an experienced aircraft broker. All the help you need with any part of the transaction is just a phone call away. Without making it their full-time job, the typical aircraft buyer or seller can’t know everything they need to know to culminate a successful transaction.
“Obviously, the big thing is professionals who are trading every day have a very good understanding of what to look for to value an airplane correctly,” Elliott Jets’ Jackson says. “That’s huge. Knowing the value drivers with any particular make and model can mean the difference between a great deal and a bad one.”
For example, let’s say you’ve found this unbeatable price on a an older midsize jet that looks and smells factory fresh. Looks can be deceiving, and an experienced broker knows where true value lies.
While the airplane may look great, the truth is that all too many high-time, older aircraft entering today’s market are increasingly dealing with obsolete equipment or supply chain issues that not only significantly decrease their current market value but also greatly increase downtime and costs when repairs are required.
More than ever, in today’s preowned market, buyers and sellers need to align themselves with an experienced team that can adapt quickly and provide facts-based intelligence about current market conditions.
And then there are the all too frequent instances where even the “best deals” are wrong because the airplanes aren’t right for the customers’ individual needs.
“A qualified broker will do a detailed analysis of what the buyer’s particular requirements are for the aircraft to determine the best options within their purchase and operating budgets,” Duncan Aviation’s Cardona explains, “not only for the purchase price but also the operating costs. I’ve seen it many times where someone has fallen in love with a particular type and ended up buying an airplane that turns out to be too big for their needs and budget.”
Of course, it’s not only the buyer who needs to keep a sharp eye on the market. “From the seller side, it again starts with a detailed analysis of the current market,” Cardona continues. “How well are those models selling, and at what prices? What kinds of equipment do they have? What is the ‘value’ of the configuration? What kind of engine program is it on?”
“We need to determine where their airplane falls in the market compared to its competition to determine what price we should ask and what we should accept,” Cardona adds. “Remember, it’s a depreciating asset. As it sits on the market, its price keeps going down.”
Another of the most noteworthy benefits of working with a broker is the ability for the buyer and seller to remain anonymous. If you try to handle the transaction yourself, your identity and your company’s identity are out there for everyone to see. And isn’t protecting your travel privacy one of the top reasons to operate an airplane in the first place?

The biggest benefit is having someone with access to real-time market data and the experience to use to determine a particular airplane’s actual value. It’s not something that’s easy to figure out. And it’s the only way to protect yourself from paying too much when you buy or accepting too little when you sell.
—Todd Jackson,&nbsp;Vice President of Acquisitions Elliott Jets

<h2>A broker is not your “buddy.”</h2>
One of the biggest mistakes many DIY buyers and sellers make is working out a “buddy-to-buddy” deal.
“Improperly evaluating the value of an aircraft is a mistake all too many people make,” Elliott Jets’ Jackson says. “If they’re buying directly from a ‘buddy,’ no doubt someone is going to be a bigger loser than the other, and the losses can be significant.”
“Buyers may not think they need a broker because they know the seller, but that’s not often a good situation,” Duncan Aviation’s Cardona says. “In the time the airplane has been up for sale, the market value may have dropped a million dollars. Brokers are experts in the aircraft marketplace, handling the roadblocks and many nuances we encounter in aircraft transactions.”
“And it’s not only the fair valuation of the airplane that’s missed. It’s not uncommon for a buddy sale to be ‘as is,’ so a thorough pre-buy is often skipped over,” Elliott Jets’ Jackson adds. “That is a huge mistake. A detailed pre-buy should be at the top of every buyer’s do not miss list.”
“I’m not saying anyone would purposely hide a problem, but some aircraft types have historic maintenance issues that the seller may not know about, or its avionics may be obsolete and no longer supported,” Jackson adds. “Without a detailed pre-buy, the purchaser won’t discover these problems until it’s too late.”
Both Jackson and Cardona stressed that a reputable broker would not, under any circumstances, recommend the purchase of any aircraft without a detailed pre-buy inspection by someone who knows that make and model inside and out. “That’s one of our primary values,” they both say.

<h2>Which broker is the “right” broker for you?</h2>
If you type “aircraft broker” into your favorite search engine, you’ll see hundreds of thousands of possibilities. It seems that since COVID, everyone with access to the internet can help you buy or sell an airplane. Of course, nothing could be further from the truth.
Rule number one in choosing an aircraft broker is to limit your search to only those individuals or organizations that are members of the International Aircraft Dealers Association (IADA). It’s the easiest way to separate the true professionals from the wannabes.
“Choosing an experienced and ethical team, preferably an IADA member, with a demonstrated track record of valuing long-term relationships over individual transactions, is a good place to start,” Duncan Aviation’s Cardona explains. “Talk to peers who have recently purchased or sold aircraft and find out why they would or wouldn’t work with that organization again.”
Elliott Jets’ Jackson adds, “Whether I was buying or selling, I would zero in on those IADA members who specialize in the category and class of aircraft I am interested in. Then it’s just getting on the phone and talking. There’s no mystery to it; you want to find someone who you are comfortable with,” he said.
Another insider’s tip is to select a broker well-versed in the aircraft category you are considering. Yes, one of a broker’s primary functions is to help you choose the “right airplane for your needs,” but if you know a turboprop or light jet is your best solution, there is no sense in working with a broker who specializes in ultra-long-range aircraft.
It can also be extremely beneficial to work with a broker who is connected to a business aviation MRO organization. They get invaluable real-world experience with the ins and outs of all kinds of aircraft.
Both Elliott Jets’ and Duncan Aviation’s aircraft brokerage arms benefit from this type of “operations” information. Every time one of either company’s maintenance facilities works on an aircraft, they learn more about the particular issues that a model typically encounters throughout its service life. That tribal knowledge is shared with the respective MRO’s brokerage team.
“The insights are a huge benefit to our customers because we can draw on that history to help us lay out and execute a detailed strategy for our clients,” Elliott Jets’ Jackson says. “The broker will work with their client to educate them to make sure they understand the potential pitfalls for the type of airplane they are buying or selling.”
No matter the broker’s background or affiliation, Duncan Aviation’s Cardona stresses, “The broker’s value is in showing you all the details and specifics of owning and operating any particular make and model. They’re going to learn all about your particular needs and then match the airplane to that mission,” he says.
“If you are a seller, the broker’s responsibility is to establish how your aircraft compares to its competition and then price it fairly,” Cardona continues. “Then, they will create an advertising program, both in print and on the web, that will expose your airplane to qualified buyers in the best way possible.”
“The bottom line is you want to work with a broker who knows the importance of all the individual steps of the transaction,” Elliot Jets’ Jackson adds. “We’re not the experts, but we know how to put together a team with all the knowledge and experience ranging from taxes to financing to maintenance to whatever the customer needs.”
“Then it’s just quarterbacking the customer and the airplane through the entire process, whether buying or selling,” he says. “My job is not done when I turn the airplane over to the maintenance facility. That’s when the fun really starts.”

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