Marian Jancarik – Pre-Owned Aircraft
Marian Jancarik is Sales Director of Colibri Aircraft. He is one of the three panel members of the Aircraft Broker Session covering the topic of the pre-owned aircraft market. Marian operates in the Central and Eastern European market from his office in Bratislava, Slovakia, while the Colibri Headquarters and its dedicated marketing and support team is located in London England and from there covering Western Europe and North America.
“Bratislava is a good location for my activities. It’s only a half an hour drive away from Vienna. Russian customers like to come to Vienna or London for meetings. So, our two company locations are well positioned. Worldwide, Russia is still the second most important market for business and private jets after North America. In the past I was heading ABS Jets in Prague for five years; I took over when it was a group of 20 people and left the company when it had become a major player in its field. Think about it; 12 years ago there may have been 5 business jets at the most in Czechoslovakia; now there are about fifty in the same region. What didn’t find much consideration ten years ago is now the location of three major OEMs. The business aviation developments in Prague also reflect that the Eastern European market is a thing to be reckoned with. Prague is one of favorite cities I’m glad to be back in town for the CEPA Conference. The event brings people from various geographical areas together and gives all of us the opportunity to share some of our knowledge and thoughts on the preowned aircraft market. The perception, preferences and mentality of the market in Central and Eastern Europe is different than in Western Europe.
Our company, Colibri Aircraft, specializes in the marketing, resale and purchase of preowned private aircraft around the globe. We want to bring honest counsel to owners and operators and in no way will we make statements that we cannot prove or make promises that we knowingly cannot keep. We know how to buy and sell. We see what is happening in the market place and where the market is moving right now and we know. There are a number marketplace statistics out there used to describe the overall status of the pre-owned aircraft markets. In the last couple of years we’ve seen slow decreases in the percentage available for sale. The reason for the reported decreases is due to the increasing number of aircraft in circulation. That is how that figure is calculated. The actual number of aircraft for sale may not have decreased in the last 4 years. Manufacturers have built more 2,500 new aircraft in those four years. Therefore, percentagewise it looks like there are fewer planes for sale and what is widely lauded as an improvement is not as comforting as it seems. Caution is advised for those who forecast imminent recovery in aircraft prices. The difficult trading conditions and declining prices of recent years have been caused by the consistent number of total aircraft for sale and the fact that there have been more aircraft for sale and coming for sale than there are people buying them. Future trading conditions may not offer a materially different forecast, and so while the percentage of aircraft for sale is dropping, it is more likely that prices will also continue to drop because the demand continues to lag behind the available supply. Yet, pre-owned aircraft don’t seem to stay as long on the market which is a good sign. We hope that the trend will continue that way but no one really has the analytic tools to make a precise prediction.
As aircraft brokers we represent buyers and sellers. We need to know their objectives, needs, and timeline. For buyers we look for the aircraft that will offer the best purchasing and operational experience, and we try to find the best buying opportunity that is present in the marketplace. For sellers we need to conduct a successful marketing campaign and after the right buyer is found, it is important to ensure that all parties work together, that we keep them on track and on schedule, and we have to sort through the numerous de-tails that inundate an aircraft transaction.
The price is really only a small part of the transaction formula. There is a multitude of organizational and intense regulatory requirements for aircraft export/import. We examine maintenance and operational history. It is our job to skillfully manage every detail in the knowledge that the smallest of details can make or break an aircraft transaction. The extensive knowledge gained through direct experience in resale transactions enables us to provide consultation to owners and to financial institutions regarding collateral assessment from prefunding to ownership to sale. We can also perform periodic checks to monitor the asset. During an ownership or an institution’s stakeholding, the only value is the asset, and that value is only realized at resale. In the event of repossession, we can coordinate the recovery, storage, oversight and resale of the asset. Our understanding of resale transactions allows us to evaluate where plausible risks to resale value may be in the future. In general terms the word broker may mean acting as an agent for others in negotiating purchases or sales. Our professional expertise and our activities go far beyond that simplistic definition. It also explains why my business card also shows “Asset Advisor” as part of my title. Most transactions are closed outside the European Union mainly for tax reasons. In principle all well established banks are good for financing and it is nothing new that whoever can afford owning an aircraft already has banking relationships. However, it is difficult to deal with a financial institution that is not acquainted with aircraft transactions. Securing the asset can be quite complicated. We prefer to work together with a partner who understands the typicality and numbers of aviation. After all, our customers are looking for a transparent and smooth transaction. The same holds for aircraft registration and legal advisors; it is highly unlikely that we would go with a new kid on the block. Mind that one of the trickiest parts of any airplane transaction is working through the logistics of timing. Buyers want to use an aircraft as quicklyas possible after the purchasing decision was made, while sellers are usually selling in order to fulfill a certain financial goal. How those desires of buyers and sellers translate into the implementation of a deal is where it can become rather complicated. All involved have their own schedules, deadlines, days off and sense of urgency. These factors become increasingly important towards the final stages of a transaction when most parties are working simultaneously. There is no need to make it more complicated than it already is and therefore with all due respect, we need comfy solutions. That is how it is.
What I like about my activity is that every deal or transaction is a one of a kind project for itself. Each one is distinctive in its structure, purpose and character. Each set of individuals behind the parties is unique in their motivations, personalities and eccentricities. With every new project the challenges change. I believe that I’m more a project manager than a career man anyway. When I left my previous position in Saudi Arabia where I was in charge of sales and promotion of Embraer Executive Jets, and before I joined Colibri Aircraft, I thought about what kind of career change would suit me best. If I would join a large corporation, they would probably send me somewhere abroad again. I’m Slovak from Bratislava and I have a family. I could have chosen to start my own business but then I would not have the professional support that is needed to be successful in this kind of business. Becoming part Colibri Aircraft, operating on the Eastern European stage, being the Embraer specialist, having a feeling of independence, and yet working under the umbrella of good professional support from the London headquarters, was the perfect combination. It really brings out the best of me, which is a triple-win situation for me, the company and our customers.“
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