Blog about aviation & marketing

Aviation Business – Have you considered a Hobbs meter in the pilots lounge?

Airplane Business 1 Comment

Spending a few days on the road, thinking about ways which a FBO or Flight school can increase revenue, the thought of installing a Hobbs meter in the pilots lounge was a way to increase revenue! It seems in aviation that we have a club type atmosphere, it is a place to socialize but also has the feeling at times, is anyone going to do any flying? Understandably, when the weather is not very nice, I am all for time spent telling stories, but often the conversation is dull and there is a complaining about the cost of flying that kind of bothers me. Read More

Selling your airplane ? The basics

Airplane Business 1 Comment

What is the best way to sell your airplane for the maximum money, and without the 12 months on the market strategy that most sellers are willing to endure? Why are they willing to endure that amount of time to sell? The reason is, they start with a price that they believe is a fair price, and after all the calls, e-mails, photos, etc. and they only have offers that are substantially lower, that they decide…after another annual inspection and insurance renewal, that it is better to sell the airplane than keep the airplane due to the cost of ownership that continues.

Airplanes are great fun, and have a unique rarity that makes them an object for discussion, while the ownership provides total freedom of schedule to be used at anytime. I believe a strong solution to the ownership expense, is finding a good partner who has the same objectives and has the money to keep the airplane in top form. Considering an airplane sits most of the time without being flown, except for day excursions, it makes sense to split the expenses, and most likely you will rarely have a conflict of schedule to use the airplane. When I say ?same objectives?, I mean someone who is going to use the airplane about the same amount you plan on using it, so that the benefit of ownership is about equal. The money to maintain the airplane is also critical, because you don’t want to have someone who never pays the bills, you get stuck with them, and your time is spent trying to get your partner to pony up the money..not good.

Continuing with the sale of an airplane, I am always bewildered by the attitude of putting an airplane on the market, and after 90 days without ANY reasonable offer…the owner continues down the same road of expectation. True, the right buyer may be along and just HAVE to have the airplane you are selling, but that is a rare exception. The problem obviously is that it isn’t priced for what the value of the airplane is in comparison to other airplanes on the market. Since aviation and airplanes have so many variables, I.E. the location of the airplane, paint, engine time, airframe time, inspection status, maintenance approach, etc., it is often difficult to find a true comparison. As in the housing business, the ?comps? are comparables that have sold in the surrounding areas with the same square footage, features, etc. and the price can be better established as to the true market value. A house with 2,000 square feet along a beautiful coastline is going to bring a lot more money than a 2,000 foot house in Detroit, all based on supply and demand. More demand for a house on the coast, than in Detroit, huge price disparity based on demand.

The seller hasn’t priced the airplane properly, and most often the price is derived from a quick check in Trade-A-Plane, ASO.com, Barnstormers, and Controller.com. The problem is that we often have selective approaches to this, and we find a mint condition example, discount slightly for ours, and believe that we have a fair and reasonable asking price. In the sales business, this is nothing new, as the terminology is the emotion of ownership, most people believe their car is worth far more than the real market value for their vehicle. The same holds true for an airplane, the owner usually has a far higher gratification and love for their airplane, therefore the idea that it is worth more than it actually is causes the process of a sale to slow down.

Not all sales are based on price, but if you list your airplane and you don’t have a legitimate prospect that is being methodical in their purchase, then you probably don’t have it priced right. Airplanes are being sold, but they typically have a value equation built into the airplane, so it is sold because it is a ready to go airplane. Realistically, an airplane on the market today that still has dual ADF receivers and original paint from the ’70s is a hard airplane to move, unless it has some real pricing that allows the new owner to paint or have the avionics updated and come out with a bill that is perhaps a little more than the average airplane that is on the market. What the seller has to realize, is that shopping for an airplane is much easier because the Internet puts all the shopping in a convenient and time efficient way, so that the buyer who is doing a search, can easily figure out what airplane really is worth what they are willing to pay.

My suggestion is to do your research as objectively as possible, but list the airplane from a source that fits your category of airplane, and list it for what you think it is worth. If it sells, good for you and never look back and think you didn’t ask enough but be happy that you sold the airplane and move on. Initially, and airplane that is listed will bring a lot of inquires because it is new to the market, and you have brokers, buyers, rudder-kickers that have a curiosity about the airplane. They are trying to figure out is there something that they are missing, like a fresh overhaul, equipment, or an owner who is definitely willing to negotiate the price. Then the phone goes dead, the inquires are no longer there, which means something is wrong with this picture. Ok, probably don’t have the airplane priced right, how long are you willing to last in the market before selling it? Any inquiry is worth finding out what the buyer is thinking the value is worth, so if you are getting terrible ?low ball? offers, then we have to assume the market doesn’t have a lot of demand. If you get an offer that is lower than expected, but much better than the wholesale offers, it may be worth working a deal with someone that has a desire to own your airplane. That is why it is important to ask questions from the person who is inquiring about the airplane, as they become factors on how to negotiate a fair deal between the two parties. For instance, you have an inquiry on your Bonanza from a prospect who is in the 5th hour of their flight training…they may think they like the airplane, but realistically you won’t be able to get them to move much, unless they are simply mad at their money and want to get rid of it.

Knowing where your inquiry is from is important, because it makes the inspection process move along easier, however if the prospect is really interested in your airplane, they will find a way to make it work. What is important to the person looking at purchasing your airplane, is it an airplane they are building hours in or earning an instrument rating, or do they use it for business or purely recreation? You need to know these things, because it helps in making the sale whether you like the idea or not. An example is someone who is building time, and inquired about your airplane. They probably told you about several different airplanes that are on the market that they are considering, and if your airplane is the perfect time builder airplane, as in low fuel burn and low engine time, you can comfort the buyer into understanding that after 200 hours of time building, the engine time will still have a good resale value for the buyer.

Little things like this make a huge difference in a sale or no-sale, so keep this in mind. What you definitely want to do, is keep the momentum of a serious buyer going, because airplanes are expensive and time not pursuing the purchase means not as excited about the product. If you think you have a serious buyer, and one question that should be a question asked in the first 5 minutes is ?when do you plan on purchasing??, the other question is ?how long have you been looking for an airplane?, two keys that help establish how aggressive you need to be to put a deal together. What I mean about the momentum, is that don’t get off the phone and forget about the prospect, but ask a time when they would like to schedule a pre-buy, or ask if they have time off that they can come out to the airport for a demo flight, etc. Keep in front of them, you can tell when they are getting cold on the deal, but the more you stay in front of the buyer, the better your chances of completing the sale is. I know, the attitude is that this is an airplane…everyone wants one!! Yeah, and you still are offering yours for sale, aren’t you?

One source that I have found to be interesting when pricing an airplane, is going to a forum that features your make/model airplane, and asking some of the members what they think the price is worth. I had a Bonanza for sale, and knew it was a pricing issue, but could not get the buyer to consider the asking price I was thinking. I posted an inquiry for the members to comment on what they thought the airplane would bring, and they were all very close on what they thought the market could bring, I think we eventually sold the airplane for within $700 of what these people had thought. It was at Beechtalk http://www.beechtalk.com/forums/ a very good site for Beech owners, because there is so much valuable information to owners with maintenance issues, or opinions for up-grades, it is a place I spend time at. I am sure that other makes have sites very similar that you can join if you haven’t already, it is a place for great information.

At my http://www.aviationbiz.us web-site, which is our Aviation Consultant and Aviation Consulting business, I have a ?for sale? quick survey that you can fill out, and I will get back to you with some options that may work to bring maximum money for your airplane, in this current market. We employ the full marketing machine and place multiple advertisements in most media that will bring the most real traffic and inquires to your airplane. By using techniques to really qualify the buyer, we can usually ?supercharge? the sale and get it done more efficiently and quicker than most private sellers are able to do…by a substantial amount. If you are serious about selling your airplane, and don’t have the time to spend hashing out the deal, the price is much more easy to swallow than an aircraft broker or airplane broker is typically going to charge, and the results definitely are more substantial!

Aviation Business ? Justifying the Business Purchase

Airplane Business 1 Comment

Over the past 6 months, I have been searching for a good aviation business for sale…because with a bad economy, sometimes now is the best time to buy.  Evaluating a manufacturing business, it had the proper elements of value for the price, but was going to require more capital than I was willing to spend to make it worth the time.  This business was the exception, as most aviation business for sale opportunities have a lot to be desired between the asking price and the reality price for what the business is worth. Read More

Avidyne Avionics is getting it right, stability control.

Aviation Thoughts 1 Comment

A few months back, I had been reading about the new Cirrus airplanes being equipped for a stability augmentation system, similar to ESC in automobiles.  If you are not familiar with ESC (electronic stability control), it is a program that helps keep a vehicle from a roll over or from skidding in a turn.  I found the Cirrus information to be interesting, because this is an airplane has had some loss of control incidents that were somewhat unexplainable as to the cause, other than disorientation.  The Perspective Electronic Stability feature works with the Garmin GFC 700 digital auto-pilot, but also works with envelope protection at all times while hand flying the airplane.  http://news.cirrusaircraft.com/cirrus-aircraft-news/2010/12/cirrus-aircraft-faa-approval-awarded-for-both-perspective-esp-and-hypoxia-recognition-automatic-desc.html  When you understand that the Airbus Industries and manufacturer designed their fleet of airplanes around software that was designed for stability and limited pitch and bank, you will start to see how important this technology really is.  Airbus Industries designed the airplanes around the low time pilots available from 3rd world countries, and their ability to fly these transport airplanes with very few hours of around 250 total time. Read More

A few mistakes by Raytheon Beechcraft corporation?

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I had been keeping up with the events at Oshkosh Airventure, and was reading the daily brief about Burt Rutan the airplane designer extraordinaire. It is amazing how many designs he successfully engineered and flew, just think about his accomplishments; first airplane to fly around the world…non-stop!, first aircraft in space…not funded by the government! Not only were his designs great, but very innovative including the method of construction for many homebuilts. What was interesting to think about, was that at one time Beechcraft had hired this man and company to build the future of Beechcraft. Read More

Airventure 2011 Thoughts

Aviation Thoughts No Comments

It is already the second week in August, and talk about the football season is a discussion I hear more often than the aviation speak while I am out at the airport. As it has always been, the Airventure Oshkosh fly-in air show is usually the peak of the flying adventures, the days all the sudden seem to be getting shorter, so there is a sense of urgency to enjoy the longer days while we have them. I believe that overall the numbers for the convention were pretty good, despite an economy that isn’t really going anywhere. http://www.aopa.org/oshkosh/2011/news/110810airventure-2011-a-success.html Read More