Is it time to regulate aircraft brokers?
Aviation is one of the most regulated markets in the world (second only to nuclear power, according to some safety specialists). But there is one area that we all know is completely unregulated: pre-owned aircraft sales, where around 2,400 jets trade each year.
Every now and then there is a call to regulate brokers (I have heard this several times at events already this year) and it is definitely odd that in the US, you need a license to sell houses but not one to sell far more valuable and more complex aircraft.
But while I can understand the possible benefits, I remain sceptical that regulation could work. To start with, who could regulate any rules? Cross-border regulation is very difficult to enforce. If you have a Kazak seller and a Thai buyer with a US and a UK broker advising them, what body could have jurisdiction over all parts of it?
Second, there are lots of different types of brokers and it is hard to see how they could all fit under one system. You have firms that only advise buyers, ones that consist of individuals and large firms with staff all over the world. How would you treat a pilot selling an aircraft for an owner?
So, the only real option is a voluntarily one. In the US there is the National Aircraft Resale Association; an organisation with an ethics code. It has about 40 members but several of the largest US brokers have not joined. There is no guarantee that they would want to join a global organisation.
Maybe I am being overly conservative, but I don’t see anything changing soon. And in these days of increased red tape and paperwork, I am not sure that is really a bad thing. But I would love to know what you think.
In the video below Oliver Stone explains what affects aircraft sales.