How An Aircraft Broker Can Help You Get the Most From Today’s Preowned Market

The COVID pandemic has caused many travelers to want to avoid crowded airports and airliners. As a result, the number of people flying privately via jet cards, fractional shares, or whole aircraft ownership has significantly increased.

This rush of new owners has turned the once relatively simple act of buying or selling an airplane into an increasingly complex transaction—one that requires the expertise, experience, and insight that only professionals possess.

“Private aviation has changed significantly over the past few years, but more importantly, the clients have changed,” explains Emily Deaton, CEO of turbine and business jet dealer jetAVIVA. “Many post-pandemic clients have been first-time buyers, and they’re not only staying but, in many cases, transitioning into different levels of ownership.”

Ann Pollard, a member of aircraft dealer and MRO Duncan Aviation’s Aircraft Sales and Acquisitions Team, notes another change. “Some preowned models entering the market are increasingly plagued by issues that can result in decreased asset value and extended downtimes,” she says. “Buyers need to align themselves with an experienced team that can adapt quickly and provide actionable intelligence on the rapidly changing factors that impact market conditions.”

Todd Jackson, VP of Acquisitions for business aircraft broker Elliott Jets, adds that another recent change has been the stabilization of preowned pricing. “The past couple of years has been a seller’s market with little or no room for negotiations,” he says. “But sellers aren’t as bullish today. Yes, some makes and models are still desirable, and their prices have not started to settle. The list of those airplanes gets shorter every day. An unaware buyer can easily pay too much.”

All these changes can be challenging for non-professionals to navigate successfully.

You’ve Got a Friend in the Business

Fortunately, aircraft buyers and sellers can reach out to a network of dealers and brokers that can help them avoid costly mistakes.

It takes a keen eye and a lot of experience to differentiate an aircraft that’s a good buy from one to which you should say “goodbye.”

“It’s particularly important to understand the pedigree, technical history, and airframe, engine, and component life-cycle status when purchasing a preowned aircraft,” says Pollard. “Airframe and engine maintenance programs can provide some level of risk management, but they are no guarantee against unpleasant surprises like extended downtime due to supply-chain or obsolescence issues.”

Pollard adds that Duncan Aviation’s team draws heavily from the global experiences gained through its MRO facilities. Last year, the combination of full-service and satellite maintenance facilities “touched” more than 9,000 business aircraft from 86 countries.

As Elliott Jets’ Jackson explains, each time our sister company, Elliott Aviation, works on a customer’s aircraft, it learns what issues the model typically encounters and passes that insight along to the sales and acquisitions team.

“These insights are a huge benefit to our customers because we can draw on the type history to help us lay out and execute a detailed strategy for our clients,” he says. “The broker needs to work with their client and educate them to make sure they understand the current environment and potential pitfalls for the type of airplane they are buying or selling.

“For example, if someone is looking to buy, we start by asking a lot of questions about how they will use the airplane,” Jackson continues. “What is their mission type and frequency? What’s their number of passengers and what airports do they typically use? And, of course, what’s their budget? We need all that information so that we can guide them toward the appropriate model.”

These insights suggest why it’s important to work with a broker who has intimate knowledge of the vast and various business aviation fleets and the intricacies of aircraft ownership and operation. Like owners, no two aircraft are the same.

jetAVIVA’s Deaton adds, “Our primary objective is to use our experience, expertise, and industry connections to facilitate a successful outcome for our client. Yes, there’s a simplified definition that brokers help buy and sell, but where we as brokers really play a vital role is knowing our clients as individuals.

“We do around 100 transactions a year, and every one of them is unique,” she continues. “Each client has different priorities and motivating factors. Our job is to understand them and know which lever to pull to ensure they achieve those goals. When we do that, you really see the magic happen.”

Another major benefit of working with a broker who is experienced in the year and model of the aircraft a buyer is considering is knowing what to look for to help pick the “cherry” from the bunch. Things like which required inspections or upgrades have been recently completed and what components are close to obsolescence.

Unraveling all the factors and then reassembling them into a cohesive plan to buy a particular airplane is not for the faint of heart. The right broker team will use its combined experiences and insights to provide accurate cost and downtime estimates for any required engine or airframe work or available modifications or upgrades.

Ensuring the Price Is Right

While a common belief is that a broker is more valuable to aircraft purchasers than to sellers, all our experts stressed that sellers stand to benefit equally, if not even more, than buyers, especially in today’s rapidly evolving preowned environment.

As Elliott Jets’ Jackson says, “When buyers have more options, as they do in today’s market, sellers have to be more flexible in their terms and wants. So, the first thing we do is accurately establish the aircraft’s real value.”

He stresses that “real value” doesn’t mean discounted pricing. “Pricing too low happens a lot, and sellers need to be careful. If your airplane has significant ‘value adders,’ those need to be considered and explained to a prospective buyer. It’s easier said than done.

“To price it correctly, we need all the data, logbooks, records, history, etc., and then we perform a detailed inspection of that airplane,” Jackson continues. “We take all that and look at what buyers paid for recently sold, similar aircraft.”

Let’s face it: even a pinup-worthy “hangar queen” has little things that need to be attended to before she’s ready to meet her competition on the runway. Again, working with a full-service broker takes the pressure of finding and supervising experienced aircraft detailers off the seller.

If the broker is attached to a full-service MRO, those blemishes can be taken care of in-house; if not, any good broker can point you to a facility that can fix what needs fixing.

Pollard says that in Duncan Aviation’s case, its completion centers have interior and paint teams that can greatly enhance the interior and/or exterior of clients’ aircraft.

“First impressions are important, so having the exterior paint touched up and shining and the interior detailed and well-organized goes a long way toward presenting a client’s aircraft in the best light,” she says.

Speaking of first impressions, an experienced broker will have the resources to provide top-level marketing support across a broad spectrum of media. Posting a for-sale notice on Facebook won’t work in today’s business aviation environment.

“One of the unsung heroes is the power of great marketing, and this is one of the many things we do well,” jetAVIVA’s Deaton says. “Sales gets the lion’s share of attention, but marketing is key to maximizing that aircraft’s place in our highly competitive and dynamic market.

“We want prospective buyers to get excited about an aircraft listing,” she continues. “There is tremendous power in an effective marketing strategy when it comes to maximizing value. The key is not in throwing everything but the kitchen sink at every listing—but in understanding which tools work best at which times to drive value and sell aircraft quickly.”

Speaking of marketing, our experts strongly suggest that you have your brokerage include a detailed outline of what resources it will employ to get your airplane on the radar screen of the right buyers.

“Oh, If I Had Only Known…”

By now, you know why buying or selling an airplane today is anything but a DIY project. Helping you avoid the laundry list of common mistakes is an increasingly large part of what your broker will do for you.

According to our experts, one mistake first-time buyers frequently make is focusing just on the airplane’s listed price and not on the ongoing costs of feeding the beast. Those expenses often come as an unwelcome surprise. 

There are many pitfalls that can catch first-time owners off guard, including whether to operate an in-house flight department or use a management company. Then there are the non-negotiables, such as hiring crews, finding a hangar, choosing an MRO, arranging for training, insurance, financing, tax implications, and more.

“Understanding the entire budget for the aircraft ownership experience needs to be a critical factor in the decision-making process,” Duncan Aviation’s Pollard says. “It can come down to whether or not ownership is the best solution for a particular situation. The sheer amount of data within our global organization, and our ability to analyze it, empowers our clients with actionable intelligence that leads to the right decision for their unique needs.”

Another common pitfall is failure to understand the significance of a pre-buy inspection for both the buyer and the seller. According to Elliott Jets’ Jackson, this is another area where a broker experienced with the make and model aircraft you are looking at can be invaluable.

“Buyers need to make sure that they are aware of all of that particular aircraft’s ‘soft spots,’ which are locations where we might typically find issues on that model,” he explains. “Since we see the same models over and over, we know where to look for corrosion or wear, or the aircraft may be equipped with avionics that are no longer supported by their manufacturer. Our goal is to make sure the buyer is not making someone else’s problems theirs.”

jetAVIVA’s Deaton echoes those comments and adds, “I think a big part of what we provide is our ability to mitigate risks and save clients money during the transaction process. When our transactional and technical teams get involved, they work with our clients and aircraft service centers to complete a comprehensive pre-buy inspection.

“Depending on the needs of each client, we can also call on legal, taxation, insurance, operational, and training experts to ensure that no unhappy surprises are waiting in the wings,” she continues. “This is an unexpected benefit for many first-time buyers in particular. It can be especially challenging when we are importing or exporting the airplane. That brings in a lot of potential issues that can ruin the outcome.”

The Bottom Line about Brokers

By now, you’re probably thinking, “The knowledge that a broker can contribute to my transaction team seems indispensable. But what will it cost?

Well, as the old saying goes, “You have to spend money to make money”—or in this case, to save it. As any aircraft owner will tell you, if you buy the wrong airplane, even at a great price, it’s a bad deal.

In the turbine markets, most brokers and acquisition fees are fixed. In some cases, brokers structure their fees as a percentage of the price of the aircraft. The percentage typically fluctuates by aircraft category, and often has a minimum/maximum cap.

And, yes, you’re free to negotiate how your deal is structured with your broker. Just don’t start your relationship by asking about the cost.

If you’re still left wondering whether hiring a broker is the best move for you, you might want to consider the final comment from jetAVIVA’s Deaton: “We’ve had many of our clients go through the entire process with us and say, ‘I had no idea how hard this was going to be. I’m so happy you were there to help me navigate through it all. I would have been way over my head had I tried to do this alone.’”