A 'Healthier Unhealthy Environment:' Jet Mart Puts
Toe in Recovery Water
"My business is booming," says Jay Mesinger of Boulder,
CO-based J. Mesinger Corporate Jet Sales. "But I don't own
any airplanes."
That's nice to know, but is little consolation to people who bought
aircraft at the peak of the market, or who for other reasons have
to sell. "If you don't need to sell," Mesinger says,
"Don't sell."
That said, things are looking up in Orlando this year after a
dismal bust that followed an extraordinary boom, a boom that saw
business aviation take on more importance than the military in
world aerospace.
A downturn was inevitable and the shock of 9/11 made it into a
spiral dive. Now things are coming back, albeit slowly: "We
moving back to a more balanced market," Mesinger says. "It
is a healthier unhealthy environment now."
Used aircraft inventories remain high, keeping prices down and
making for a compelling case to not deal with new aircraft manufacturers
at all-or to deal with them on the buyer's terms.
"It's absolutely still a buyer's market, period," Mesinger
asserts.
On the long-term upside, some buyers are "standing on their
tiptoes" to buy aircraft they couldn't previously afford,
he says. These people will in all likelihood remain in their higher
niches indefinitely.
The downside is that the current uptick is based solely on price.
"It's a fragile increase, which would be disrupted immediately
if prices went up or even began to strengthen," Mesinger
says. "It's only going in this direction now because of price."
"The good news is for the buyer," agrees Fletcher Aldredge
of Vref Publishing, Shawnee Mission, KS. "If they can somehow
make the justification for an airplane," Aldredge says of
would-be buyers, "they'd be foolish not to be in the market
right now. There's some activity now that's going to firm prices
up." He says that almost all of his dealer contacts report
increased activity, but that price is the key to it all.
"The last year has been toughish but my general impression is that's
it's been on the improve," says Tony Friend of Corte Madera
(San Francisco) based Aircraft Shopper Online. "Most of them,"
he says of dealers, "are doing better than hanging on and some
are doing quite well. The asking prices of aircraft have adjusted
down and that has created an opportunity. Things have come back
to a realistic level. Everybody's a little bit happier"-except
the people who bought at the peak. If they have to sell now they
may be taking some write-downs."
"Everybody's shopping around," says Mike Turner, director
of marketing at Elliott Aviation in Moline, IL. "There's a
lot of really great buys out there right now (but) aircraft sales
is still lagging behind," he cautions, especially in the context
of his company's completions, paint and maintenance activity. "It's
not going to be a big upswing," he says of the current recovery.
"If your company believes in buying low and selling high,
buy," says Vref's Aldredge. "Most airplanes are a real
good buy right now, whether you're talking a Skyhawk or a Challenger."
