Mallory Libex | October 30, 2020
Insights

A Spooky Time of the Year

A Spooky Time of the Year

It is hard to imagine that there are only two months remaining in 2020. In a year filled with fear, uncertainty, and doubt, this Halloween has all the ingredients to be particularly spooky. Aviation professionals have watched as pre-owned inventory numbers have continued to creep up and prices have declined throughout the year. What has been even more concerning is the unpredictability of the markets as a whole. Are we in a “V-shaped” recovery, an “L shaped”, or a “U”? However, while all these precarious trends may be concerning, the last few weeks have shown promise. What is certain, with only 60 days left in this year, is the time for action is fleeting. Time is running out on aircraft buyers looking for year-end deals and sellers needing to capitalize on a decent offer. If you are an aircraft buyer or seller today, your moment for action has arrived.

In the past, most aircraft brokers have watched as sellers walked, on what seemed like an initially low offer, just to chase the market downward and have to settle on an ever lower price a few months later. No one could have predicted the chaos of the last 9 months. That said, the blame falls mainly at the feet of circumstance. In order to sell your aircraft in 2020, you must have your aircraft positioned in front of these declining markets. Turning your back on a decent offer hoping to net a bit more has resulted in chasing the market downward. However, it’s not just the sellers who should be feeling the pressure. At the time of this writing, 100% bonus depreciation on qualified business assets persist until the end of 2022. What if this law, among others, were to change? Buyers planning on the continued benefits of current tax law could be bit by the same presumptuous swagger. Buyers and sellers must base their aircraft decisions on the facts, as they are today. For sellers, any fair and decent offer should be dissected and considered. As for buyers, the tax laws of the last three years still exist, for now. Today might just be, “the good ole days.”

How scary is this Halloween? Armed with facts and logic, this Halloween does not have to be as fearful as it seems. The Feds are providing a backstop for the markets and an end to the pandemic is closer than where we started back in March. The phone and inbox are becoming more and more active in the fourth quarter, and deals are transpiring. Those buyers that were on the fence for most of 2020 are starting to step forward. Sellers, who have been on a roller coaster for most of the year, are seriously considering each fair offer. As more and more aircraft start to sell, fear, uncertainty, and doubt are starting to fade. The picture for the last two months of 2020 is becoming more clear. Supplied with data, knowledge, and experience, professional aircraft brokers have all the tools needed to ensure that buyers and sellers of 2020 capitalize on an unprecedented year in history. You can never change the past, but you can use the lessons learned to shape the future.

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Ryan Linn – Vice President of Aircraft Sales

Those who know Ryan know his longtime passion for planes. As a matter of fact, Ryan soloed his first aircraft before receiving his driver’s license at age 16. Today, he holds multiple jet type ratings (LRJET, CL604 and B737) and is responsible for aircraft sales, brokerage, acquisitions, market analysis, data research and special projects. Ryan puts client needs first, always respecting time and understanding the importance of investments. Outside the world of aviation, Ryan enjoys spending time with his wife and two children. He also enjoys heading out to the golf course as often as possible.

rlinn@flyomni.com | (916) 753-4797

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