Selling pre-owned aircraft consistently for good prices is an art backed by science. The art comes in the age-old craft of showing the buyer his or her dream in a tangible, purchasable form, and doing so in a way that turns a one-time customer into repeat business. Even if they don’t upgrade for five or ten years, when they do, you want them coming back to you because what you did for them first time round was solid.
The science comes down to knowledge, knowing everything about the current state of the market for every model that you sell, who owns them, who’s likely to sell them and for what. This has been the guiding principle that has shaped René and Curt Banglesdorf’s aircraft brokering business, Charlie Bravo Aviation, from day one.
Before getting into the aircraft sales business in 2002, René and Curt were working in publishing and marketing in Washington DC. Then they moved to Texas where Curt worked, and René did some marketing, for an aircraft sales company. This gave them an insight into the aircraft brokering business.
“Curt and I talked it over and we decided we could do more working for ourselves. It was early 2008, just before the financial markets around the world were crashing and the bottom fell out of the aircraft sales market. Nevertheless, we got deals done and made it through the first five years in reasonable shape. Now we are on a fairly aggressive growth track and the market in the US is looking much more promising,” René Banglesdorf says.
In September, Charlie Bravo closed its 15th sale so far for 2015 and Banglesdorf is confident that the company, now up to seven staff, will sell between 20 and 30 aircraft by the year end. This is about par for the course for a decent year for the company and makes Charlie Bravo one of the more successful aircraft brokering businesses.
“One of the unique things about our business is that each staff member focuses on a particular OEM. For instance, my Citation analyst looks at all the Citations available on the market on a daily basis and keeps track of aircraft that are not on the market but whose owners might entertain an offer. This analyst knows the asking price for that model of aircraft and more than that, they have a very good sense of what a particular Citation owner will take for his or her aircraft. The analyst will also know if there are any historical issues with the aircraft, such as corrosion, whether it is a single owner model, heavy or light usage, whether it is doing charter and so on. They track all the things that make an aircraft more or less valuable, and we keep pretty sophisticated records on all the markets and models that we cover,” Banglesdorf explains.
Today the company buys and sells jets, turboprops and helicopters all over the world. Charlie Bravo’s initial focus was pre-owned business jets; however, the business expanded into turboprops in 2010 and in 2013 it added helicopters to its specialisms.
So what makes the business grow? Banglesdorf reckons that the best leads generally come from word of mouth. “People we have done work for before are tremendous assets to the business. They refer us to others that they know are looking for aircraft. They know that we are knowledgeable and they know that in recommending us they are helping a friend, client or colleague to find someone that will really be able to help them,” she says.
On top of that, regular advertising of aircraft for sale brings in a steady stream of leads. Plus, in the course of phoning around the market the company’s analysts get a pretty good feel for aircraft owners that are getting ready to upgrade their aircraft to a newer model or a different OEM’s product.
“Another great source of leads for us is being diligent about following up on people who visit our web site and request buyers’ guides or other information from us. If someone wants a market report on the pre-owned market or some segment of it, that is generally a pretty good sign that they are getting serious about buying an aircraft,” Banglesdorf notes.
Frequently, an owner will have their chief pilot do research in the run-up to any upgrade, or they will do research themselves. Following up on these hits can also generate strong leads. “Of course, if we get direct requests for information, then we follow those up and try to find out a good deal more about what it is that they have in mind,” she comments.
Charlie Bravo is happy to sell new aircraft if the opportunity arises, but Banglesdorf says that this probably constitutes no more than 5% of the company’s business.
So how is the market today? “Four or five years ago we were seeing some distressed sales, with owners under severe financial pressure from the global economic downturn. However, today what we tend to see is people getting fair value from the market for their aircraft. There are very few distressed sales,” Banglesdorf says.
“Clearly newer aircraft sell faster than older models. Any aircraft with a good pedigree and a reasonable price is going to sell, however. We recently brought a 15-year-old aircraft with low time and only two owners to the market. It went fairly quickly. However, prices are either still falling – or at best, not coming back up. On the plus side, inventory across the pre-owned fleet is thinning out and there is a good chance that this will help prices to stabilise or even rise a bit,” she notes.
Banglesdorf points out that the competitive landscape in pre-owned pricing has changed a good deal since the crash. “In 2005, if you were spending two to three million dollars US you’d be looking at a Citation V. Today you would be looking at a Hawker 800XP or a G100, or on the higher end of that at a G4,” she comments. The basic point is that you can get a lot more aircraft for your money – so this then pushes the emphasis towards operating costs and maintenance costs as the real focus for buyers.
“There are some interesting trade-offs to consider. Where you could buy a 2005 Hawker 800XP for $3.5 or $4 million, you can also think about a really nice Challenger 601 for $2 million. The difference in price will more than make up for the increased operating costs of running the Challenger,” she notes.
“Some of the manufacturers are doing an amazing job with their newer models that are now on the pre-owned market. The Embraer Phenom 300 has done very well. The Legacy 500 is very well thought of in the market. And on the new models now appearing I am very interested to see how the HondaJet sells. They have better performance numbers than they were expecting, so it will be very competitive with the current crop of light jets,” she comments.
As always in recent years, there is continued interest in mid-size aircraft that can fly coast to coast across the US and that have a wider body. But Banglesdorf says that Charlie Bravo is also seeing a pick-up in demand for pre-owned light jets, particularly in North America.
So what does the future hold for Charlie Bravo? “I would love to see the business grow to 40 to 50 transactions per year, but my vision is different than many of my competitors. As a female business owner, I have noticed that only 4% of business aircraft are owned by women. I’d like to see that number increase as more business women take advantage of such a great competitive tool. I am presently working on a large PR project that I hope will raise awareness about the benefits of private aviation—and it may involve a book published sometime in 2016,” she concludes.