Aircraft Sales: Perfecting The Customer Experience

BEST PRACTICES

Those of us who are legitimately in the business of buying and selling aircraft are constantly on the alert for ways to improve the quality of the goods and services we produce. Enhancing the Customer experience and exceeding expectations in delivering the best possible end result serves everyone’s best interests.

In the right context, admirable goals that are at the same time self-serving for the service provider have very positive connotations. When the aircraft broker/dealer community does well for all the right reasons, it provides the capital and investment incentive to expand and elevate the quality of services provided.

Just think for a moment about what that means in terms of the strength of that segment of the business aviation industry. Do the mathematics; if you accept the premise that the typical owner turns his or her aircraft over every five years, and a resale agency has 100 customers who are considered their ‘airplane people’, that agency has potentially captured 20 transactions annually in perpetuity. Likewise that number might be 200 a year if they’ve got 1,000 satisfied Customers and so forth.

First though, a broker/dealer needs to persuade the potential Customer that they are their ‘airplane people’. So what qualities should the discerning Customer look for when seeking high quality buy or sell representation? Here are a few to consider:

COMPETENCE:

It doesn’t pay to assess an aviation dealer and brokers only on experience. Experience merely implies that someone has done something a number of times, but perhaps never very well.

Through referrals or a direct interview, the Customer needs to be assured the Agent is familiar and capable of handling the many subsets and nuances most aircraft transactions embody. IRC Section 1031 implications; import/export considerations; technical due diligence oversight; accommodating trade-ins; and monitoring document flow are some of dozens that may enter the picture.

INTEGRITY:

This quality is easy to talk about but difficult to quantify. Solid references from well-informed sources (i.e., those intelligent enough to know the difference) are good indicators of integrity, but prior exposure is better. Try to get a chance to see first hand how individuals and organizations conduct themselves in a transactional environment. Among the red flags are quoting an above or below market price expectation to capture a sale or acquisition listing (creating false expectations).

Other red flags may include failing to be on site during milestone events in the process; recommending key steps be bypassed in the interest of expediency; and a premature focus on fee distribution in advance of a satisfactory conclusion to the deal.

KNOWLEDGE:

This is not only about the resale market, but also about how aircraft are cared for and operated. Genuine insight from your agent into real world applications from the outset helps avoid pitfalls that can accompany introduction of equipment into service that hasn’t been well planned for.

DUE DILIGENCE:

The value added by the representative who goes beyond clear title and "original and continuous logs" is considerable. The really good ones will think early and thoroughly about the following factors for the Customer:

• Post delivery certification requirements (FAR Part 121, 125, 135 mandates when applicable) can often be dovetailed with technical appraisal activities saving time and cost;

• Other FAA Regulations such as those applicable to "Flight Department Companies";

• IRS implications considered with the knowledge that they don’t talk nor tailor their Code for compatibility with FAA Regulations;

• Depreciation rules;

• Early buy-out option considerations in an operating lease; • Property tax liability;

• Like-Kind Exchange coordination/timing;

• Delivery of the Aircraft and closing of the transaction in conformity with Purchase Agreement terms and conditions.

Many of the above are of course not the provenance of the broker/dealer, but he or she needs to know who to go to or who to advise within the Client organization to make sure they are properly addressed.

ACCURACY:

Hip-shot answers are an undesirable quality in an agent. Indicators of competency include real world, real time information formatted to be readily understood and properly interpreted by the Client. No one person or organization can possibly have instant answers to diverse questions; many of which have timing and recency of information implications. "I don’t know but I will find out," is always a valid preliminary response.

FOLLOW UP:

It’s amazing how many agents who lay claim to providing business aircraft for sale / purchase/ aircraft lease representation services simply disappear when title transfers or they get paid, whichever comes first. The true professional with the long view and a healthy sense of what’s right, contributes to Customer Satisfaction and a robust industry by continuously managing the client relationship.

The bottom line is that a strong re-sale industry has a solid foundation resting on strong players - those that know how, and can and will do; those that deliver value to their Customers - on time every time. All involved, from broker/dealers to OEM’s, and most importantly the Customer, will benefit from precise guidelines and well-executed delivery of competent services.