It's not a bad time to take stock of our year, as well as look ahead to what is in store for the preowned business aircraft market. At our company, we have enjoyed a good second quarter.
The first quarter was a bit slow rolling, as was also reported by many of our fellow sales professionals, but the second quarter picked up steam nicely. Airplanes went under LOIs and contracts, pre-buy inspections started up, and the act of buying and selling felt great again.
We are not acting in a frenzied way and patience is becoming the virtue we almost collectively forgot about. This year has brought much-needed inventory to the table, which gives us all more choice and more opportunity to find the right airplane to buy, and not just the only airplane to buy.
Along with more inventory, also comes another almost forgotten virtue: sellers having to play in a well-groomed sandbox. For the last two years, the market clearly felt and acted like a sellers’ market.
This gave no room to act responsibly as a buyer without the risk of losing the airplane that was often the only one available. We were dealing with unsustainable prices being paid, lack of due diligence being allowed, and frankly, even balanced contracts being more difficult to attain.
Welcome back to the normalization of our transactional business.
This all sounds too good to be true. So is there any downside to our world today, and for the rest of the two quarters to go? Of course there are. As I always say, if this business were easy, everyone would be doing it or at least doing it more successfully.
Let’s talk about the headwinds. To jog your memory, 2020 was one of the best years for our company transactionally, as it was for most. In fact, all that success came in just 2.5 quarters.
Remember the first many months of 2020 when the pandemic was first sweeping the world, ours, like most industries, just stood still. This did not last thankfully and by June 2020 it seemed like we were all rolling at top speed. Prices had not yet begun to rocket up, and buyers, mostly first-timers, were standing in line to pick the best and still pay reasonable prices.
Could 2023 be a repeat of that success for all involved? It could be, except for one huge difference—available slots for pre-buys.
Finally, by the end of 2022, we once again were getting back the right to do the due diligence that everyone knew we needed. Only one problem: the maintenance facilities, both OEM owned as well as independents, are so backlogged that they may be the deterring factor to repeating the success of 2020.
No matter how many sales we can make, if we cannot find shop space and available labor on a timely basis to perform a pre-buy, the world we know slides to an abrupt halt. We are now waiting up to two months or longer to find a slot anywhere, much less the shop or top-three shops you would like to go to.
This is a supply-chain, labor, shop space, and high-demand problem. Multifaceted in the reasoning, as well as the solution. I have been talking as often as I can to the shops and hoping collaboratively that we could work on solutions. If we cannot find them, preowned aircraft transactions may be destined for a mediocre year rather than a record-breaking year.
In either case, it will be a year of more balance and less frenzy. It will be a year that should make us all glad to be a part of this thriving industry.
Jay Mesinger is the CEO and founder of Mesinger Jet Sales, an international aircraft brokerage firm. With 49 years of successfully buying and selling aircraft, Mesinger Jet Sales has a global reputation for personalized, transparent service.
The opinions expressed in this column are those of the author and not necessarily endorsed by AIN Media Group.