Clear on Top

Reprinted with permission

With 2009 behind us and the first quarter of 2010 fast coming to an end it can be really hard to encircle what has happened in the last 18 months in the business aircraft markets let a lone in the over all economy.  No doubt there still remains a lot of uncertainty in 2010 but also many things have improved and as Warren Buffet has recently stated we survived Pearl Harbor but the battle is still ahead of us.  I was wondering if there was any good news out there back in December of 2008 and as I look around today and reflect on our own business things are indeed better.  Better of course is a subjective word at best as I talk to many of my contemporaries that like us have seen record drops in business and unfortunately some that haven’t made it through the Great Recession.  But as has been said before “these times are a changing”…

I have talked in the past about when things turn around that the stage will be set for huge opportunities for those that are in a position to take advantage of the markets and low prices.  To put it in perspective, imagine that you had a time machine.  And as an interested buyer in the business aircraft market you could zip to and fro checking out all the deals during their highs and lows back through the last 30 years.  If you considered all the things that mattered, such as low interest rates, abundance of good high quality state of the art inventory at record low prices, cheap fuel adjusted for inflation, availability of good staffing and an aviation infrastructure that was second to none in the world… I think you as a time traveler would set your dial for March of 2010 to arrive at what would represent the best buying opportunities in thirty years!

We are already starting to see improvements in many aircraft markets with some even increasing in value.  The best time to buy has never been when everything is running on all eight cylinders and taking off for the moon!  The best time to buy is before the rest of the world figures out it is the best time to buy and that time is now.  All the aircraft markets have been reduced to values that in some cases are below the apex of cheapest ever since they came off the assembly line.  There is still a lot of fear out there of what the future holds and the unknown.  Some would say were not out of the woods yet, but at some point fear is going to be replaced with confidence and since the markets are driven by perception I might suggest we all start thinking about how we would look at things if we had no fear?  A simple way I have always dealt with fear is to turn it around and imagine it as a reef that should simply to be avoided as the consequences of getting stuck on a reef in nautical terms are costly.  How would you look at things if you had no fear?  Interestingly you might just start becoming part of the solution and not part of the problem and your reward would be success!

Ill close with a quick story about a recent conversation I had with a gentleman about an aircraft we have for sale.  He was a very experienced and professional pilot searching for an aircraft for whom he hoped would be his new Boss.  He said that he had made his living in Business Aviation for over 30 years and loved the industry.  But in the same breath he stated that he thought the industry was finished and that aircraft values would just keep dropping and dropping virtually never to recover.  I asked him then how he would even suggest anyone would want to purchase an aircraft with that belief?  And how in the world would his hopefully soon to be Boss find encouragement and confidence in his words?  He paused and realized that he wasn’t saying what he was saying based on any factual information, but was just caught up in all the doom and gloom that seems to be floating around.  I suggested that he start being part of the solution and not part of the problem and that if he truly felt that way about Business Aviation that he start becoming the advocate for what he knows and loves so much!  That anything else would only further discourage his new Boss from doing anything.  I think he got it… and from that point on the conversation changed its tone.  I think he now truly realizes that these are great times for great opportunity for the industry he loves so much!

The battle is far from over but when isn’t it?  No matter how good or bad times are we always have our challenges. We have great opportunities all around us and last time I checked this was still a great country to take advantage of them in!

Kevin McCutcheon
President
Flight Solutions Inc.