NAFA member, Jetcraft's Pascal Bachmann, discusses closing deals in the business aviation industry during COVID-19.
If you want to survive and thrive in turbulent times, you need to be flexible, inventive and tenacious. The business aviation industry is no exception. It requires clever thinking to close major deals during Covid-19.
Bringing buyers and aircraft together safely for viewings during lockdown has been a challenge, but it’s hard for clients to place a deposit on a multi-million-dollar private jet they haven’t seen in person. In some cases, we’ve used high-resolution photos and video to bring the viewing experience to the customer. In others, we’ve flown the aircraft directly to the buyer’s hometown for a viewing.
I’m proud to say that Jetcraft recently facilitated the closing of a US-based Embraer Legacy 450 aircraft in a record-breaking seven days. This is not typical, though. Every deal is different, and whatever logistical challenges we face, they can be overcome with a little imagination. A complex European sale of a Dassault Falcon 7X, which closed on April 1, is one such example.
NAVIGATING A COMPLEX CLOSING DURING COVID-19
Firstly, we needed to find crew who could drive to Geneva, where the 7X was located, and make the arrangements to ensure those pilots could enter Switzerland. The buyer also wanted to paint the aircraft after closing, so we had to find an FBO open and able to carry out the work.
Our initial plan to close the deal in Guernsey became impractical when coronavirus struck and a 14-day quarantine was imposed on anyone landing there. I’m not saying it’s not nice to spend two weeks on that beautiful island, but understandably the buyer didn’t want their new jet to be stuck there after closing.
We found a second possible location, which might have worked with clever manoeuvring of crew across international borders, but we needed a confirmed tax ruling from the authorities, who were shut down and wouldn’t respond.
By now, we were considering a bit of everything, including closing in international airspace, which would have been possible but not ideal from a tax perspective. Clients might want to use this option in future, though, especially if Covid-19 border restrictions remain in place
We finally found a closed airport in the buyer’s home country, so we had to arrange for the facility to open, and firefighters to be present, to be able to land the jet and complete the deal there.
We still faced the challenge of retrieving aircraft documents from an OEM service center in another country. With minimal staff working at the facility, even finding keys to the archive doors took longer than usual. I was so frustrated, I nearly jumped in my car and drove there to get the paperwork myself!
We were determined never to be beaten. At every stage of the transaction, our team persevered, and had the vision to find a creative solution.
NAVIGATING A SEVEN-DAY CLOSING DURING COVID-19
Considering the complexity of the Falcon 7X closing, how did our sales team move so quickly to close the Embraer Legacy 450 aircraft in seven days?
The aircraft (part of our owned inventory) was new, so no further inspections were needed ahead of the sale. We took the lead in flying the jet to the buyer in the US for initial viewing.
It always takes two parties to close a deal. Both our team and the cash buyer did everything promised to secure the sale quickly. This kind of mutual commitment is priceless.
Throughout the Covid-19 lockdown, demand to buy or upgrade private jets has remained. There are definitely challenges in meeting those requests – if we’re bringing a European aircraft to the US, for example, we need European pilots for the test flight after going through the ‘C’ check. But it’s easier to move aircraft around the US than Europe because there aren’t border closings between states, so we’re repositioning some of our jets there for viewings.
With an experienced and creative sales team in place, aircraft trading can continue wherever you are, even in a lockdown, while keeping all parties healthy and safe and following the guidance of authorities. Miracles take time, but we can usually manage the impossible within 24 hours.
This article was originally published by Jetcraft on June 29, 2020.