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Marian Jancarik: Tips for Selling Your Private Jet

16/04/2014 by Aviation Times

Marian Jancarik, Sales Director of Colibri Aircraft 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.

Have you just decided to sell your private jet? It is very important to look at the marketplace and find the right place for your aircraft. What exactly does this mean? Your aircraft is worth only what a potential buyer is willing to pay for it. There is no guarantee to understand what this number is, but it can be estimated and achieved with a few simple tips:

First, evaluate your aircraft based upon recent transactions and other competing aircraft on the market. Ask your trusted aircraft brokerage professional to get these numbers for you. Setting the right price is as equally important as the whole marketing and selling process. A good analogy is to look at pre-owned aircraft prices like the prices for company shares on the stock exchange. For example, if the price of a share of company XY is $20, but you are offering your shares for $22, then there will be zero interest from the marketplace even in spite of a tremendous marketing campaign. If you price your shares at $18, you will have ample buyers but will be leaving some money on the table. The biggest difference between company shares and pre-owned aircraft pricing is that there is no public information on the aircraft pricing.Remember that the markets move frequently, so the price today will likely be very different in two or three months. This is particularly true with aircraft that have a low number of sales each year as one or two sales can entirely reset the market.

Set up a Marketing Campaign. A common misconception we see from owners is that there is no need to market their aircraft as they believe that the market is already fully aware that their aircraft is for sale. While marketing is not necessary for a sale to occur, we find that it will often yield far higher prices and improved terms as a seller. Finding an aircraft buyer for your aircraft from somewhere around the world takes time and effort, and you want to maximize your exposure of the aircraft to reach numerous potential clients. If you do not advertise it, you limit your options to only those people who already know you. In the global nature of the aircraft business, you want to find those buyers who you do not already know; more buyers give a greater opportunity for a better deal. Talk with your brokerage professional and specifically ask about the marketing campaign they have planned for your aircraft.

Understand the value of Maintenance and Engine/Airframe/APU program statuses. If your aircraft is on an engine program, understand the level of coverage that your program has and be aware of the caveats in the terms and conditions. Many programs can have geographic limitations that will prohibit a transfer to a buyer in another part of the world. As the programs are often the largest store of value, this can have a material effect on the resale price. Ask your brokerage professional if the market values the engine program on your type of aircraft. On some aircraft types the market does not give much benefit to a full engine program, while on others it is an absolute necessity. Understanding this and its effect on the possible price achievable is key.

Realize and Convey the clear VAT and legal status of the aircraft. Nobody wants to pay more than is necessary for the aircraft and VAT is one of the most discussed points. It is very important to have clear documentation of the VAT status (C88 customs clearance, or similar document). We see this as being one of the single greatest obstacles to transactions at the moment and knowing the VAT status in advance is vital to determining delivery location to help make the sale tax neutral. It is best to solve this up front as opposed to just before closing.

Finally, ensure someone coordinates the entire process. Typically, this role is something your broker should provide, however it can be filled by your lawyer, operator or anyone else on your team, including yourself. There are many steps to go through in aircraft transactions, each one of which must be completed to have a successful sale. In many deals there are several parties, and often each one assumes that someone else is responsible for certain tasks. Appoint one person to make sure all the details are completed – it will save you a tremendous amount of time and headache.