Buying private jets on eBay
With aircraft sales dragging on in today’s depressed market, some aircraft brokers are using eBay to ensure fast sales to a worldwide audience.
A Cessna Citation 500 private jet listed for sale on eBay.
Most aircraft brokers will use as many ways as possible when marketing an aircraft. They will circulate the aircraft amongst industry contacts, use their own website, send out e-mails, advertise on websites (including this one) and make use of social media (not to mention the broker’s own website).
Mark Rollag, president and owner of Jet Auctioneer, has a few more tactics. As well as Jet Auctioner’s own online auction platform, he uses eBay to market aircraft on behalf of his clients.
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While aircraft may seem a high ticket item compared to the majority of items listed on eBay, Rollag is convinced that the online auction site works for aircraft.
In 2013, Jet Auctioneer – which has a record of 100 per cent positive feedback – listed around 35 aircraft on eBay. Rollag claims that all of the items without a reserve price were sold.
“Unreserved is the way to go,” says Rollag. “We listed a Cessna 172 with a reserve and it didn’t sell. We re-listed it with a $100 starting price and it sold for $42,000.”
He also believes eBay is the quickest way to sell an aircraft. The latest data from JETNET shows that it takes around 400 days to sell a private jet and 335 days to sell a turboprop. Rollag says there is no point waiting for the market to pick up, as values will naturally decline over time. “The value of a Citation 500 is going to drop by around 25 per cent over the course of a year,” he says.
How much is an aircraft worth?
Not all aircraft brokers are convinced by eBay. Like many aircraft brokers, what concerns Brad Harris, CEO of Dallas Jet – which mainly sells larger jet aircraft – is the risk of selling an aircraft below its market value. “[Their] goal is to drive the price down, lower than the product value. This is great for some things, but not for the aircraft market,” he says. “We want to maintain the value of the aircraft and sell it at a fair market price.”
In contrast, Rollag believes that winning bid on an eBay auction – which may court around 200 bidders – is a fair representation of what the aircraft is worth at that time.
“We’ve sold Citations for $600,000,” says Rollag. “That’s right on the money.”
Jeremy R.C. Cox, vice president of Jet Brokers, Inc. isn’t so sure, but he admits to having to using eBay in a personal capacity to buy and resell a Taylorcraft turbopop.
However, Cox is quick to add: “I have never done it professionally and I probably never will.”
Likewise, Rex McGreevy, an aircraft broker at Charlie Bravo Aviation in Austin, Texas, advises that both brokers and buyers should take extreme caution when using eBay for aircraft transactions. “I have heard a negative review of a sale that took place via eBay and the end result was not good in many ways,” he says.
However, McGreevy says his employer recently used eBay to market a Cessna 421 piston twin-engine aircraft and has had no complaints. “We posted it and had an offer within a week,” he says. “I contacted the new owner a couple of months ago and they are still enjoying it.”
Big ticket transactions
Up until a 405-foot ‘giga-yacht’ was auctioned for $140 million in 2005 (it was allegedly bought by Chelsea Football Club’s owner Roman Abramovich), eBay claims that the most expensive item to ever sell on the website was a $4.9 million 12-seater Gulfstream II private jet.
According to eBay, the aircraft was sold by Texan-based Tyler Jet to an African charter company in 2001 (although, there were no GIIs registered in Africa during 2001).
At the time of the sale, Tyler Tysdal, managing partner of Tyler Jet, said: “Listing on eBay expands our audience of potential buyers and gives us an opportunity to generate excitement around each aircraft sale.”
Although eBay has since removed its dedicated aviation category, which included listings for aircraft that once belonged to the likes of John F. Kennedy and John Travolta, there are 145 aircraft listed on eBay at the time of writing (in a sub-section of the eBay Motors category) and 26 multi-engine aircraft, including a 1979-build Citation II with a starting bid of $485,000 and a 1976 Hawker 125-600A starting at $795,000.
Even eBay’s mobile app is a popular choice amongst aircraft sellers, with one mobile bidder paying $265,000 for a 1985-build Piper PA-46-310P Malibu turboprop in 2010.
The pros and cons of eBay
The biggest drawback of using an eBay to auction an aircraft is that eBay has to verify people bidding on items over $150,000. The process takes around 20 minutes, which makes last-minute bidding wars – a common feature of eBay auctions – difficult.
The fees, however, are negligible. The auction site charges around $125 for each successful aircraft listing on top of a fixed-rate monthly subscription fee for corporates.
The main benefit of marketing aircraft on eBay, without doubt, is that it allows aircraft brokers to tap into a worldwide audience consisting of over 110 million active users across 37 international markets.
What is surprising is that, despite being the largest US aviation market, Rollag says that the vast majority of people bidding on aircraft are from overseas, in places like Brazil, China, South Korea and the Caribbean.
The reason why so few brokers have taken to eBay has nothing to do with trust, argues Rollag, but because they are simply not technologically savvy enough.
“They don’t know how to make it work for them,” he says.
