Have you picked a side yet? There are only a few months remaining in 2020 and there are some big decisions ahead. As if the closing months of any year are not hectic enough, 2020’s final months are shaping up to be particularly chaotic. Not only are we facing some tough financial and political choices, but there are also a few key events taking place that will surely effect our industry. At the end of this month, a key provision of the Cares Act, that provided payroll protection for over 90 companies in our industry, will come to an end. How will this lack of government assistance affect the corporate aircraft market? Also approaching is the end of another year, and a profitable year for quite a few. Ben Franklin said it best, “nothing is certain except death and taxes.” There are buyers who will need to capitalize on the purchase of a business asset before the end of 2020. In addition to this, we also have a presidential election in November that is sure to shape all of our lives for years to come. So, as I advise my clients for the rest of the year, I am left asking myself, am I playing Checkers or Chess?
In a few short days, there will be 96 aviation companies that will lose the payroll support they have relied on for the past 6 months. This lack of financial support is sure to inspire a more competitive landscape for the business aviation sector. As airlines cut the less profitable routes in their network to save money, there will be a void left for individuals who relied on this service. The companies and individuals with access to their own private air travel will be, for the most part, unaffected. As the economic gears continue to turn, the companies with private jets may see an opportunity to capitalize on their competitors newfound lack of mobility. Furthermore, without some positive change in passenger counts for the airlines, this downsizing is sure to continue into 2021. Now might be the perfect time to position your company in an offensive posture.
Contrary to what some were saying in late March and early April, the corporate jet markets have yet to fall off a cliff. It is true that inventory numbers are on the rise and sales prices have taken a significant hit, but buyers do still exist. For buyers in today’s market, the name of the game is value. These buyers know that inventory numbers remain high and making multiple offers looking for the most eager seller is becoming more common. However, the hands of time continue to eat away at 2020 and some of these buyers might get a bit more aggressive as this year closes. Sellers need to understand that these buyers will not overpay for an aircraft in this market, there are simply too many choices. It is safe to say that the first solid purchase offer should be seriously considered.
There are so many uncertainties these days that it may seem difficult to make an educated decision. What is certain, however, is that on November 4th, 2020 the sun will come up and the world will resume. The paralysis thus far in 2020 has only led to opportunity for the imaginative few willing to take a step forward. So, the answer to checkers or chess is simple, play the game in front of you. Individuals with a need for corporate aircraft should avoid hesitation and hire an expert who knows these markets. Corporate jets continue to change owners and will continue to do so for the remainder of 2020. Do not quit just because you lost a pawn and do not over-celebrate for simply being awarded a king. There is much more of this game left to be played. Companies and individuals will continue to grow on the wings of their aircraft just as they have in years past. 2020 has certainly been interesting thus far and the last few months will surely add to its legacy.
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.
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