The International Aircraft Dealers Association (IADA) hosted a webinar on May 12, 2020 on the State of the Industry. Eagle Creek Aviation CEO and Founder Matt Hagans participated on the panel of industry experts and shared his insight on the market and the effect of the global pandemic on aircraft transactions.
More than 400 members of the International Aircraft Dealers Association (IADA) got a private look this past week at bizjet commerce in the Asia-Pacific region, what’s happening with Part 135 and Part 91 fleets, how the industry is responding to the pandemic, and planning for NBAA-BACE later this year.
“We have now posted the highpoints on the IADA website,” said IADA Executive Director Wayne Starling, who moderated the event. “The slimmed down webinar covers a lot of territory in a quick 12 minutes and I encourage everyone to take a look at it,” he said. For the highlights go to https://iada.aero/iada-state-of-the-industry-webinar-q2.
An Active April –The second quarter industry webinar followed a five-week period where preowned aircraft transactions fared better than aviation fuel sales and retail charter demand, which were both down about 90 percent. From March 27 to April 30, IADA dealer members closed 53 aircraft transactions, about 50 percent of normal averages for the period.
While 31 transactions were terminated during the period, contracts were issued on 58 aircraft. Thirty-four price adjustments were made at just under 10 percent, and 27 new acquisition agreements were made by IADA’s 46 dealers, along with 63 new brokerage agreements.
Participants in the hour-long webinar were:
- Jeffrey C. Lowe, Managing Director, Asian Sky Group
- Don Dwyer, Co-Managing Partner, Guardian Jet
- Brian Foley, Founder, Brian Foley Associates
- Matt Hagans, CEO Founder, Eagle Creek Aviation
- Ed Bolen, President & CEO, National Business Aviation Association (NBAA)
“I’m optimistic that, I guess, maybe when we finally get through the second quarter…early as the third quarter, we’re going to see some…deals finally getting closed…We’ve been through the second wave – the second wave being those people that eventually get released from countries with travel restrictions and they returned to Hong Kong bringing, potentially, the virus with them. Today in Hong Kong, it looks pretty much like normal except everyone wears masks. Most people are out and moving about.” – Jeffrey C. Lowe, Managing Director, Asian Sky Group.
“Over the last few years, more flight departments – big flight departments – have retracted than gained in size. And this could slow that down. Right now, people don’t want to get on the airlines. Of course, our corporate customers, they’re not flying. They’re not necessarily grounded, but they’re self-quarantined. The high net worth people are kind of hunkered down in their second homes, their beach homes, their mountain homes. The ones I’m talking to are not anxious to travel this year. So, they might be anxious to do deals, but they’re not anxious to travel.” – Don Dwyer, Co-Managing Partner, Guardian Jet.
“Charter, however, I think will bounce back, certainly quicker than the airlines. And as soon as later this month, early next month, I expect a lot of individuals will be doing a lot of leisure travel, I’d say, and traveling from their sixth house to their second house, because they’ve been cooped up for so long so I think we’ll see a nice little bounce there. No one will want to get on these airlines and expose themselves to germs when they can travel privately with people they know and not get exposed to the airport environment, or worse yet, the airliner environment. I think we’ll see some renewed interest and by this time next year we’ll be back, you know, maybe as high as to where we were before this happened. And 2020 was always already a little slower. Or maybe we’ll wind the clock down to 2016, 2017 somewhere, which still wasn’t too awful.” – Brian Foley, Founder, Brian Foley Associates.
“I would say that there are no singular reasons as to why the buyers are holding off. I think it’s as individual as the buyer. If you’d asked me the end of March, first of April, I would expect that the buyers are waiting for better pricing. Now I think the activity is higher. The phone call activity in the last two weeks was quite robust. If you just look fuel sales week by week, we probably went down 80-90 percent at locations at the beginning of this thing through the…first part of April. Two weeks ago, I would say we were back up to – we were 25 percent of normal. Last week the fuel sales looked to be about 50 percent of normal compared to this time last year. So, we are getting better.” – Matt Hagans, CEO Founder, Eagle Creek Aviation.
“We recognized that we were moving into uncharted waters with COVID-19. So, NBAA has worked very hard to be a constant source of timely and reliable information. We currently are moving forward and planning on having our NBAA-BACE event in Orlando, Oct. 6, 7 and 8. We are spending a lot of time trying to understand what the protocols may be. Our first goal is to make sure that all participants are safe. So, we are working hard to understand what the best guidance is. We’re watching the reopening of conventions in places like China. We’re also watching closely to see what organizations such as Disney are doing in Orlando itself, to try to make sure that we know everything there is to know about trying to keep people safe, what those protocols are, and how we can do them in a manner that is both safe and consistent with the business aviation community and what people have come to expect from NBAA base.” – Ed Bolen, President & CEO, National Business Aviation Association (NBAA).
IADA Member Webinar PollIADA polled its members during the webinar including dealers, brokers and products and services members. Fifty eight percent expected a stronger second half. Half of the respondents said aircraft pricing will adjust by 10 to15 percent, and 66 percent were very optimistic about pre-owned market recovery, while 52 percent were slightly optimistic about new aircraft sales.
IADA is a professional trade association formed more than 25 years ago, promoting the growth and public understanding of the aircraft resale industry. IADA now offers the world’s only accreditation program for dealer organizations and the only certification program for individual brokers. Products and Services members are verified by the organization. The process delivers high standards of ethical business and transparency regarding aircraft transactions, leading to a more efficient and reliable marketplace.
View highlights of the webinar here.