Business aviation as seen by a private jet salesman

Even the bad times can be good for the men and women in the frontline

This issue, EBAN begins a series of features looking at the issues
facing a particular group of business aviation professionals. ‘Perspectives’
will sound out decision makers on their working life, how they overcome
problems and their hopes for the future.

The aircraft salesman has to learn how to cope with the stress of
working with extremely demanding clients across multiple time zones that can be
as much as 17 hours apart in order to cope with a lifestyle that is less
glamorous than it appears to the outsider.

Buyers in Europe and the Middle East have access to a competitive
global marketplace and the salesman’s approach is governed by the knowledge
that some deals will be quick, others will be slow and many will fall through –
often at the last minute.

Gabriella Somerville, md ConnectJets Limited, says: “Selling
is similar to childbirth. Some deliveries are long, painful and drawn out,
others are over in the blink of an eye. The engagement period is normally about
nine months, but if finance is not required then the timeline can be
reduced.”

Somerville adds: “Intuition plays a huge part in sales. From
the moment of engagement, the broker should have a pretty clear idea of where
their client is in the process. Normally the shortest deals are transacted when
the timing is absolutely ripe, the groundwork has been done and the buyer is
positioned and ready to purchase. There are some clients who merely dance with
the idea of acquisition and engage multiple brokers which can be a waste of
valuable time. Then there are those who require a long-term approach but are
nonetheless serious buyers who go on to transact eight to 15 months down the
road.”

Companies which carry out private charter and source aircraft for
clients say the clients benefit from their operational experience. Edward
Queffelec, sales manager of Geneva-based Masterjet Aircraft Trading, says:
“I believe it is important for an aircraft salesman to be working together
with an aircraft operator to get the operational feedback with the benefit that
the technical department will assist on the most complex aspects. We at
Masterjet commercially operate Cessna, Learjet, Bombardier, Dassault and Airbus
aircraft which gives me a real-life analysis of the aircraft’s performances and
reliability, technical assistance to locate the potential flaws of an aircraft,
the charter potential of an aircraft type, or even to provide the buyer with a
management budget so he can really have all the information before launching
the project. Furthermore, having some charter customers on an aircraft type
gives us some potential customers when we have such aircraft for sale.”

The choice of aircraft is so fundamental that potential buyers
turn to a wide variety of contacts for advice ranging from pilots to charter
operators. Philippe Fragnière, for instance, points out that Exklusiv Aviation
is not a broker. “Among its other functions, it acts as an exclusive
charter sales agent working closely with a few selected charter
operators.”

However: “We work together with aviation professionals to
select the aircraft according to the wishes of our clients. We often work
directly with the aircraft manufacturer in case the client wishes to purchase a
brand new aircraft. We prefer otherwise to work with each manufacturers’ second
hand aircraft department to provide a pre-owned aircraft.”

Harduin Putrich of the JetAlliance Group confirms that the culture
and business mentality of a country greatly affects negotiations. “In
southern Eastern Europe one has to expect long negotiations, many meetings and
many evening events – the personal contact in these countries is indispensable
and lots of patience is required when you want to conclude a contract here. On
the other hand in eastern countries such as Poland or the Czech Republic the
entire process, although personalised, can be described as more formal.”

Andrew Hughes, Ocean Sky’s managing director aircraft management,
says high end sales require passion, commitment and time. “You are dealing
with very high net worth individuals with exacting standards, not to mention
the high value luxury products that they are looking to buy. That is a 24-7
world where you may be in Frankfurt when the client is in Hong Kong or you may
be in Washington and the client in Dubai so there simply are no off-duty hours.
If you’re on the end of a $50m deal then you don’t tell the client to leave an
answerphone message and if they want to see you in person, you go to wherever
it is.

“On the plus side there is great travel, you socialise and
network and visit the client’s business or the aircraft manufacturers and so,
yes, there is what would be seen as the ‘glamour’ part of the job as
well.”

Huxley Cowen of PC Aviation says aircraft sales are arguably the
least regulated and most difficult part of aviation as a whole. “To do it
properly requires a large amount of knowledge, an ability to negotiate with the
most hard-nosed of people, a mass of experience, the patience of Job and a good
sense of humour. Unfortunately, because there are no exams to pass or
qualifications to collect, it is open to any Tom, Dick or Mary with a good line
in patter, who may care to chance their arm. In addition, because the
commissions can be large, it tends to attract the less desirable ‘sales people’
who wrongly see it as an easy way to make large amounts of money.”

But Cowen reports that the global economic crisis has had positive
effects. “Fortunately due to the downturn in the aviation sales market
many of these ‘sales people’ are no longer interested as the sales are few and
you have to really work at them to get through to completion.”

Rob Seaman, founder and president of The Aviation Advantage Inc
(AvAd Inc), says the economic recession created new levels of desperation,
stress and tension. “Buyers sometimes made ridiculous offers to see how
desperate sellers were. Fortunately that is not nearly as common now as it was
a few months ago as the market has sorted itself, the deals are not as
plentiful and the buyers and sellers are less panicked. All that said, the
question we still get first from most sellers is “does the buyer have
their money?”

“Cash is king and many sellers simply will not tie up their
asset while a prospective buyer looks for their funds after finding the right
aircraft. The best advice remains: if you are serious about buying, do the bank
process first – it will give your offer more substance when the seller looks at
it.”

The job generates moments of boredom mixed with others of sheer
panic and stress. “For those who thrive on such, the rewards are there.
When the times are good and sales are happening it is a great way to work. When
times are tough, you better have good back-up – either money in the bank or
other income streams besides just buying and selling private jet aircraft.”

Stress is directly related to market conditions. Daniel Jennings,
ceo The Private Jet Company, says the market has returned to 2007/2008 levels
of interest regarding calls and real buyers, but prices and transactions are
still significantly below 2007 highs.”

He says: “I have a few thoughts as a fixed wing corporate jet
broker. The career as an aircraft broker has evolved to include market
forecaster, distress loan adviser, psychiatrist and financial adviser. What I
mean is, I hear from my clients and they are telling me the good, bad and ugly
of their business and looking for options of how to either get out of the
aircraft they are currently in with the least amount of pain or looking to take
advantage of the distressed market to make the best deal possible.

“Buyers until the fourth quarter of 2010 were in the most
part unrealistic with regards to pricing as, no matter where the aircraft was
priced, they would offer 35 per cent below and sellers outright rejected such
bids. At this time many of the higher value late model repo and distress
aircraft are gone and what comes to market is priced to sell, with less
negotiation room as markets begin to tighten.”

Jennings may well hold some sort of record for both the shortest
and longest sales period. “The longest process was a buyer I spoke to for
three years and finally completed a transaction and the shortest was a BBJ $60m
purchase that was started on a Friday and closed the following Thursday all
cash. We negotiated and worked with attorneys in three countries and two US
states through five times zones almost 24-7 for six days to meet the closing
schedule.”

The Private Jet Company offers private jet sales & acquisition and private aviation consulting services in major markets throughout the world. Founded in 2005 with headquarters in North Palm Beach, FL and regional offices in Paris, France and Mexico City, Mexico, TPJC has completed over $2 billion of private aviation transactions for individual and corporate jet owners. In addition to assisting clients buy and sell private aircraft, the company works with aircraft management companies to reduce the burden of private aircraft maintenance costs and create income through chartering jets. TPJC also partners with aviation attorneys and tax experts to help clients maximize depreciation, reduce tax burdens and assist in import and export Certificates of Airworthiness.