Mesinger Pulse: Right side up on level ground
As a kid, I loved going to amusement parks and the thrill of riding roller coasters, writes Jay Mesinger, CEO, Mesinger Jet Sales. Climbing slowly, then plunging from the top, a fast ride to ground level, only to be thrown to one side or the other as the car veers to the left or right. Scary for sure and tumultuous as well. Does any of that sudden jerking movement sound familiar?
No longer do we have to go to the amusement park to feel the terror and sudden jerks. Our stock market, dollar value, and bond markets resemble the ride we had as kids.
The good news about the roller coaster is that the ride always ends, and you know before you go that at the end, you will be on level ground and a safe stop. Not so true with our current economic conditions. Every day seems to be another sudden stop, fast descent and slow recovery.
I have attended several webinars recently that have focused on the topic of tariffs and the impacts on our industry. Either directly; due to import costs potentially placed on completed, new, or pre-owned aircraft, and parts needed for repairs and overhauls. I try to listen to the experts, but since the fact patterns change regularly, the outcomes are almost impossible to plan for. So, where does this leave us as industry participants? We serve our clients who are both buyers, sellers and owners daily trying to sort these answers out.
Do they stick with their current aircraft? Do they put off or delay transitions? Do they operate as usual? Those are the soup du jour questions we get daily. The good news is that at our company, we are not getting calls to unwind or stop transactions that are in place. That is very promising. However, what none of us really know about are the calls we are not getting. The calls from people who may be considering delaying a transition and sitting on the fence. My concern is how big that group may be, and we just do not know because we are not hearing from them.
We are still feeling good about the demand that we do know about. However, an observation about the current market is that the supply to satisfy that demand is growing. I am watching days on the market increase for many categories of aircraft. The traditional outcome of more supply and longer days on the market creates greater negotiation opportunities and seemingly wiser buyers. There is no frenzy and therefore there are no knee-jerk reactions among buyers to pay a bit more so as not to lose the opportunity.
Pricing for available aircraft has not, in many years, been as critical. Sellers should always feel that leaving money on the table is not wise. And remember, as a seller, buyers have the same no-money-on-the-table feelings. Smart pricing helps eliminate that for both sides. Listen to your trusted aviation professionals to guide you in the valuation process. We are in the market every day working to match price with value.
I believe the ride we’d all love to be on for a while would be the carousel. Smooth and even and no sudden jerking. Picture choosing a beautiful horse, settling into the saddle, and gliding around in a predictable rhythm. After navigating market ups and downs, that’s the ride we’d love to enjoy for a while.
