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PERSPECTIVES – Business aviation through the eyes of the aircraft salesman Part 3
EBAN has, for many years, reported on the requirements and decisions of private jet and helicopter owners and operators in Europe and the Middle East.

Consultants that can make or break the business aircraft buyer

EBAN has, for many years, reported on the requirements and decisions of private jet and helicopter owners and operators in Europe and the Middle East. Their comfort and financial well-being may depend to a large extent on acquiring the right aircraft. That in turn may depend on obtaining the right advice from the right person. That is where the aircraft salesman or broker comes in. This section details how such professionals operate.

Trevor Esling, Cessna's vp international sales, says most aircraft sales representatives thrive on the lifestyle. "That said, while the job might be seen as very glamorous, with international travel and top hotels, you need to know how to deal with extremely demanding customers, who are used to getting exactly what they want."

Esling adds: "You need to offer the right level of respect and service, while retaining a sense of proportion. The work can be hectic, but the best and most experienced sales representatives learn to cope with stress."

The best aircraft brokers or sales representatives are consulting experts for clients in many ways, making their points and recommendations about aircraft choice clearly.

Esling, who is responsible for non-US Citation sales, warns: "Telling the customer that they are making a big mistake – if they choose a different manufacturer from your company, for example – is rarely a good idea. Preserving the quality of the relationship is vital. If the customer ignores your advice and makes a bad decision on an aircraft acquisition, he'll come back to you a year later. He may not admit he made a mistake, but he will come back to you. If a really good relationship exists between the customer and the salesperson, the customer will often transfer manufacturer allegiance if the salesperson changes companies."

Esling joined Cessna in 1995 as a division sales director for Citations and was promoted to vice president in 2005. He says: "People will do business with people they like. The greatest skill of the salesman is to form that bond with a potential customer and, from there, form a friendship that leads to repeat business. Sales are mostly about strong relationships. That's what you need."

When assessing the credibility of the potential buyer, Esling says: "Any good aircraft salesman knows the best buyer is someone who already owns a business jet. But sometimes you need to trust your judgement and take a long-term view on a potential customer with no ownership background. It's not unknown to meet somebody new to discuss a purchase, effectively hear nothing after that meeting and then have that person come back to you five years later, ready to buy."

He adds: "Anyone buying a business jet will be well-educated and commercially sharp, but there are undoubtedly cultural differences in the expectations and negotiating techniques of customers. Customers from the Middle East, for example, might well negotiate by stating their final position straight away, whereas Chinese customers will tend toward discussing smaller, incremental movements on the price."

Esling acknowledges that, wherever you are in the world, the aircraft sales process is not always quick. "I remember a government tender for a business jet to be used for flight inspection missions. The first enquiry took place in 1994. We delivered the aircraft in 2007.

"On the other hand, we signed an agreement on a Citation CJ1 in 1998 within five minutes of meeting the customer.

"I'd say 80% of the time the customer will ask for a test flight before making the purchase. Nonetheless, sometimes the customer will simply buy from the brochure because, after a good long-term relationship, he completely trusts the sales representative."

Esling says: "Specific desires to personalise the jet, while rarely collapsing the deal, can often bring delays. Finding French Renaissance-style chairs for a customer was certainly a challenge. Interior refurbishment can be quite an emotional matter for the customer, and you need to ensure the buyer's wife, as well as the buyer, likes the aircraft too."

International buyers are very savvy and have great business acumen, according to Gordon Wishart, TWC Aviation, director of aircraft sales and acquisitions. "If they feel that they are being taken advantage of they will just move on. It all boils down to trust."

Wishart, who has been involved in numerous aircraft transactions in Europe, the Middle and the Far East, points out that working within multiple time zones that can be as much as 17 hours apart can be a business challenge.

"Language barriers are seldom an issue with clients outside the United States. What I find is that they want to establish a relationship that is built on mutual trust and knowledge on our side when they make an inquiry on the aircraft and on the purchase process. It can be a somewhat more difficult process for the international client due to logistical distance and making the initial contact but once established it goes very well. The sales representative or broker needs to provide accurate information to the interested party, answering the questions that are put forth such as providing aircraft specifications, maintenance status pricing and comparables."

There are different methods in the way negotiations take place in different countries and some are related to mannerisms and customs. Wishart says: "I personally find this varied clientele very polite and extremely patient but it all comes down to wanting to get the best value on the purchase."

The time span from enquiry to flight has varied from 40 days to two years. "Sometimes the client does not respond quickly and the aircraft is purchased by another party. This becomes very frustrating because that opportunity might not come around again but you have set up the expectations," Wishart says. "Other challenges include discovering the aircraft was not being represented as the specifications indicate, such as avionics equipment, the interior not being fire blocked, aircraft books are missing, or there is damage found that could have an impact on the value of the aircraft."

He advises performing a visual inspection and teaming up with a knowledgeable technician to review the aircraft log books. "That saves so much time and money. However, some issues can't be identified until the aircraft is opened up for the required inspections such as finding corrosion. Neither the seller nor the buyer wants to discover that."

Wishart says. "There are some individuals that have become very successful financially, but they reinvest that income right back into their business. This is why they are successful and deserve those accolades. For the past three years the majority in our field have found it very stressful. Very few people have been purchasing aircraft. That is stressful, and I see that quite often right now. This occupation is not always as glamorous as many people think. A lot of ground work is put in every day and there is a team of individuals behind every successful sale.

"One may ask why we all stay in the business. Once it gets into you're blood you just cannot get it out of the system. I have made friends for life in this business that have become like family. I know many of my associates would say the same."

Wishart regards a test flight as essential. "In every contract we originate, we insist that the customer needs to fly the aircraft to check out if all the systems are working in accordance with their requirements. It is important to fly from destination A to destination B in order to see if it is the right aircraft that meets the company's travel requirements.

"It is essential to fly after the aircraft comes out of the pre-purchase inspection in order to confirm that all systems that have been worked on, installed or upgraded are performing correctly."

One thing that is almost sure to scupper any aircraft transaction is a lawyer who has limited experience in aviation buying and selling, according to Robert Dolby of Aviation Advisors International Inc. He adds: "Everyone has lost deals to this impediment. Aviation sales is hard work with a lot of pitfalls. Like most professions it has significant rewards for the top performers, but the bulk of the participants put in long and arduous days for a middle class lifestyle. The prevailing fantasy is that it is easy money. While it is true that one or two transactions can support a 'bedroom broker' for a year, it is also true that one deal with the wrong person can wipe out a year's income."

Dolby warns: "There is dishonesty and sharp dealing in every arena of the business including buyers and sellers. Fortunately, the information super highway has bypassed some of the worst, but you relax your vigilance at your peril."

He adds: "The biggest change is the amount and availability of information – 20 years ago we used to buy directories to locate aircraft and owners. Pricing levels were obscure. There were opportunities for obscene mark ups."

Dolby says: "English is a universal language in aviation, which probably is one of the major reasons pilots in non-English speaking countries are more involved in the acquisition process than in the US. I find more British, German and US executives have some degree of competence in aviation than in other countries, particularly in Asia. Russians are tough and are a separate world of aviation in their own territory."

He recalls: "My longest sale took over two years to put together an acceptable trade deal for a retired airline pilot."

Variety is the spice of life for Chris Sedgwick, technical sales executive for BAE Systems Asset Management, who has been specialising in the Avro business jet for the past two years from a technical perspective and is now the version's "product champion."

He says: "Because we don't sell aircraft with a set of modular interiors, this makes the selling process more interesting as it means we have to take into account different customers' tastes in terms of furnishings, fabrics and aircraft functions. It is obvious of course but our experience is that customers in the Middle East generally prefer a quite different style to those from North America or Europe. That is why we have commissioned Design Q to provide a series of concepts for interiors that can reflect the different tastes and lifestyles of clients around the world."

Sedgwick confirms that national traits do tend to reflect in the way negotiations are conducted. "Some customers prefer to do business over dinner; others haggle over the smallest details. That is partly why we employ salesmen who are located in countries overseas and who are well versed in the local cultures and can steer us on the correct way to approach the negotiation. We make every effort to get to know the person and his or her lifestyle and from that we can develop ideas with design consultants for possible interior designs."

The 'average' norm from start to contract signature, but not including aircraft refurbishment or customisation, is about six months but the longest sales process has taken 18 months to two years.

"The shortest I personally can recall was in the days of the BAe 125 business jet, where I am aware that, at a Paris Air Show, a buyer not previously known to the sales team came to the chalet and negotiated the purchase of an aircraft there and then and paid a deposit on the spot. This must be very rare."

Sedgwick points out that the sales process should help to eliminate the chances of failure in the corporate and vip market but each buyer is different and difficulties can range from the lack of money being available at the right to conflicts of interests between consultants.

He adds: "All of our salesmen state that the belief that they enjoy a wonderful lifestyle with the travel to exotic locations is somewhat far from the truth ... most of the time when abroad on a campaign all they see is airport terminals and hotels and that is far from glamorous. On the plus side they do get to meet some fantastically interesting people, especially in the vip market, who are real characters."

Sedgwick agrees that closing a deal can be stressful but also exhilarating. "If the deal doesn't come off in the end, the emotion is more of disappointment rather than stress. One area that sometimes crops up with the ABJ is that it is possible the customer might be specifying a long range aircraft when 99 per cent of the flights he makes are, for instance, intra-European.

"We always try to specify an aircraft that we feel is best suited to a customer's requirements, especially in terms of performance. If we feel a client is making the wrong choice we do try to understand why he has set his heart on another product and try to work around that."

Buyers, Sedgwick says, know about the aircraft beforehand. "Test flights are, of course, a costly exercise and we do not have demonstrator aircraft as such. However, if the customer requirement includes the ability to operate from a difficult airfield for example, it is possible that a customer might request a demonstration. In that instance we would probably suggest that a cheaper way to achieve this – though still quite expensive – would be to arrange time on a simulator and in that case we ask them to pay for the simulator time and factor that cost into the aircraft price. We never offer to pay for the simulator exercise ourselves and this, in turn, is a test of customer seriousness."

Sedgwick says buyers are shrewd and looking for value-for-money and that specialist business aviation exhibitions help them visualise the end product. "Certainly in our recent experience, customers getting on board a refurbished aircraft rarely realise that it is an older aircraft that has been converted."

Clients, says Adrian Twibill, founder of the London-based Emtjets Global, are fully aware of the market value and are always looking below that level. "They didn't get to where they are and to be able to afford a jet without knowing how to negotiate first," he points out.

Twibill adds: "The main gremlin we encounter would be finance. The second would be a breakdown of communications in a chain between representatives and the end buyer. We tend to prefer liaising with the owner and buyer directly for reasons of efficiency and accuracy."

"I would say it was a fulfilling job, but can be stressful at times. It may be a good lifestyle selling the Bentleys and Ferraris of the skies, but we are acting on behalf of the client and focusing on their needs. This takes full dedication and understanding of what is required of us and we are on call 24-7. It is a personalised service and we try to prevent further stress to the client by taking it onboard ourselves."

He adds: "We advise the client on what is and what is not a good investment. Whether we agree with their decision or not, we can only present the best aircraft options on the market and take our clients instructions. In all of the sales we have facilitated over the years, the buyer will expect a test flight. We will always qualify the buyer prior to any introduction. This ensures the buyer is serious and protects the owner."

Daniel Jennings, ceo of The Private Jet Company, says Russian clients often will change their mind in mid-transaction and look for another aircraft, rather than solely focus on the deal in hand.

"When deals are closing and business is wonderful the lifestyle, although always stressful, can be wonderfully rewarding in the financial rewards as well as personal accomplishments. I find the most enjoyable part is the interesting and successful personalities that you meet and come to know. I try to build relationships with my clients and have long-lasting friendships beyond the transaction. There are opportunities to travel worldwide and have unique access to a lifestyle few ever see including yachts, private aircraft and spectacular wealth and power."

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