Would you know how to find the right broker for your next aircraft transaction?
It may seem like a simple enough question, but a lack of clarity does still exist over what distinguishes aircraft brokers from aircraft dealers. What exactly is a business aircraft broker, and how can you choose the right one for your needs? Jet Tolbert discusses…
An aircraft broker is a person or company who works with buyers and sellers of business jets or turboprops, along with their team of representatives, to complete the sale of an aircraft. Usually they’re involved in the process from the initial discussions through to the closing of a sale.
By contrast, an aircraft dealer buys the aircraft and sells it on to a buyer. An aircraft sales representative who helps owners market and sell their aircraft could fall into one category of broker, while acquisition agents representing buyers might fall into a different category. Nonetheless, many experienced aircraft brokerages do both.
Whether you’re buying or selling a business jet or turboprop, you’ll naturally want the counsel of an expert in the market whose focus is on helping you achieve your goals, without any conflict of interest.
How to Choose an Aircraft Broker?
Whether considering engaging the services of a broker or a dealer, buyers and sellers should seek references from previous clients of that dealer/broker to ensure they are a reputable firm.
Both buyer’s agents and seller’s agents should have a long and proven track record for negotiating the finer points of sale and purchase contracts, and provide credible references.
A good aircraft broker will wear many hats and be part psychologist, part pilot and part aircraft technician. That’s because they need to be able to manage the many personalities within the buyer’s team and seller’s team as well as the technical aspects throughout the aircraft sales process.
Choosing a highly qualified representative to navigate the process will help ensure a relatively turbulence-free process with lower exposure to additional costs and downtime. An additional aspect of an aircraft brokerage that you should look for is the experience amassed working with other firms involved in aircraft sales and acquisitions. This should further promote efficient and transparent dealings.
What Does an Aircraft Broker Do?
When considering what you can expect a broker to do, we need to consider the selling and buying processes separately…
The Seller’s Broker:There’s far more to selling a jet than having a broker place the adverts and handing off potential buyers to the seller. The seller’s broker should have the expertise to know what buyers are looking for in a jet; to know where to find those buyers; and how to extract the best price for your aircraft.
The seller’s broker should accurately value your aircraft and have an in-depth understanding of how it relates to recent sales and comparable aircraft currently on the market. In short, they’ll be able to make a strong value proposition for your aircraft while actively locating buyers.
Moreover, they will advise on any offers received and the contract process regarding the price and the terms relevant to your exposure and cost throughout the process. A head for mechanics will also be necessary for the seller’s broker in order to stay ahead of the buyer’s inspection while also presenting a pragmatic perspective to the buyer of what they can expect from the inspection process.
Better still, the seller’s broker will be a physical presence at key points throughout the process, providing oversight from the initial discussions all the way through to closing.
The Buyer’s Broker: Able to listen to your needs and wants from the initial consultation through to aircraft selection and closing, without bias or conflicts of interest, the buyer’s broker will provide expert consultation to assist in the decision-making process for a certain type of aircraft.
They will then drill into the market to identify all relevant aircraft for sale (on or off the market), including those that are new to market or are scheduled to come to market.
A good buyer’s broker will discuss all available aircraft with the buyer to help establish a shortlist of candidates. Ideally the buyer’s broker will have extensive experience on the seller’s side, too, enabling them to understand what sellers are looking for, and what could send out the wrong signals from the buyer’s side of the deal. This ultimately will help ensure that the best purchase is achieved for the buyer without risking the deal.
It’s important to understand not only what an aircraft broker is, but what they do – and how to select the right one to represent you in a purchase or sale. It’s hoped the preceding article will provide you with a starting point for selecting the right person to act as your trusted broker and partner in your next aircraft transaction.