Peter Menza, Global Aviation Vice President of Client Services and Acquisitions

Peter Menza, Global Aviation Vice President of Client Services and Acquisitions

Perspectives is a featured column in the Global Aviation Newsletter written by Peter Menza, an industry expert and Global Aviation Vice President of Client Services and Acquisitions.

As we near the end of February, it is clear to me that a large portion of the demographic we work with has some definitive opinion about the economy and the aircraft market in general.

Over the years in this business I am continually reminded of something a wise man once pointed out in the course of a learning moment.

“We never build enough aircraft,” he said to me. Somewhat puzzled by the comment, I thought it was important enough to write down. Here we are some 20 + years after that learning moment, and the adage still works.

Never build enough aircraft simple means we (the industry) either builds too many or too few, but never enough to meet the demand. For the past several years, the former holds the spotlight.

Forecasting in this end of the business is extremely difficult as it is predicated on a number of moving targets that include: financial projections; cost to produce; shifts in demographics; mission requirements; corporate and private expenditures; regulatory issues and, lets not forget to mention, emotional motivators.

The current state of our aircraft market creates opportunity. Between the new products coming down the production line, unsold units that all the OEM’s are dealing with, and two plus years of pre-owned inventory currently in the market, many of the buying demographic, (including charter –would be buyers) continue to sit on the sidelines.

While activity and voiced interest in aircraft acquisitions has increased post-election, as a promise of an improved business climate takes shape, price points for the most popular aircraft in our market continue to bounce around the bottom. In fact, even the banks and lending institutions are weighing in with respect to residual value concerns across the board. Aircraft that are 20-25 years old in the market are untouchable with some lending institutions.

So what does this all mean?

There has never been a better time to buy an aircraft in the past 20 years as there is today. The opportunity lies in the ability to identify the best quality product with traceable pedigree (maintenance history), up to date configuration and associated equipage to meet current and projected regulatory requirements.

It also helps to have qualified people on your side representing your interests and yours alone in the acquisition, management and maintenance of the aircraft.

At some point in the near future, folks who have experienced charter – an activity that has grown 4% over the past 12 months globally – will step up and take advantage of the opportunities the market affords. When they are ready, we will be ready to help and provide the full range of services Global Aviation can extend.

Read more from Global Aviation’s February 2017 Newsletter…

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