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Auction My Aircraft?

Consider a New Way to Sell

Auction My Aircraft? Consider a New Way to Sell

If you’ve ever sold an aircraft, you know that it can be a time-consuming endeavor. According to both AMSTAT and JETNET, the majority of the approximately 3,400 fixed-wing turbine aircraft currently for sale worldwide have been on the market for more than six months, and a third for more than a year.

Historically, when the business aviation industry hears the term “auction,” the associated connotation typically is not well regarded. In fact, “fire sale” may be what comes to mind. It may be time for aircraft owners and brokers to expect more of the process of buying and selling business aircraft. And no, that doesn’t mean “auction” in the distressed property kind of way, or how you might think of the real estate or automotive markets. Much like the high-end classic auto auctions, sellers can set the reserve and be assured that the buyers are not just “tire-kickers” but proven, vetted buyers with the financial resources necessary to buy. 

Moreover, a consignment auction actually can empower sellers, by providing them with a means to create urgency in the sale process. Many sellers will generate increased interest leading up to the event, and quite possibly receive an increased number of offers, because putting the aircraft up for auction signals the seller is serious about selling. The increased interest is a result of the finality of the auction date. Buyers seek to buy before the auction to avoid competing at auction. Multiple offers may be used to increase the competition (and value) among potential buyers for your aircraft. 

When buying or selling an aircraft via auction, there are many benefits to consider:

  • Pre-Purchase and Post-Purchase inspections and the due diligence process all are predetermined as part of the consignment process, and do not require weeks or months of negotiation simply to agree to a scope.
  • All aircraft also are subject to pre-auction offers and may sell prior to the auction event, and are eligible to sell after the event.  
  • Closing documents are form agreements drafted by industry legal aviation counsel, which can be reviewed by your own legal team, and agreed to by both the buyer and the seller prior to the auction.

In addition, the bulk of the marketing and vetting of potential buyers is handled for you by the auction house. The auction itself is promoted and advertised by the auction house across aviation publications, traditional business publications, and a database of 7,500 current targeted aircraft owners. Details available on individual aircraft inventory will include year of manufacture as well as total engine/airframe hours and Hourly Cost Maintenance Program status. Potential bidders apply to participate with a bank letter of guarantee or capital deposit, an important vetting that eliminates any uncertainty regarding the buyer’s ability to close.

“What if,” you may say, “my aircraft doesn’t sell at auction? Have I wasted more time than I saved?”  Just by taking your aircraft to auction works as a motivator to potential buyers in the market prior to the auction date – so much so that you may well have your aircraft sold before it even comes to the auction block. 

But what happens if you don’t sell prior to the event OR at the event? You may find that discussions that begin at the auction often may lead to a completed deal down the road. The process might never have been consummated without the “jump start” of the auction process bringing motivated sellers and qualified buyers together in a transparent process where both have certainty as to how they can proceed to closing the transaction. 

Aircraft are meant to save time, not waste it. And auctions represent a faster, more effective means of buying and selling aircraft, streamlining a once-opaque process into a truly enjoyable experience. BAA

2 COMMENTS

  1. Mr. Smith,
    Throughout the industry, there is a much different perspective when aircraft are taken to auction. In most cases, the aircraft have commonly been (or will be) taken in repossession or maintained in a less than stellar condition. Often these aircraft have been sitting on the tarmac for several months, have lost or stolen logbooks, or in the case of a Falcon 200 or equivalent, are just not worth the maintenance costs to fly. These are just a few scenarios. In fact, the only case I can remember when I did see an attractive aircraft that was auctioned was in an estate auction and that was a piston aircraft. “BUYER BEWARE” and “AS IS WHERE IS” is the main emphasis of the seller’s agreement and it is there for a reason.

    I will comment to “never say never” but possibly 1 out of 100 aircraft sent to auction will have any type of pedigree that typical flight departments will want to operate. At best most will be “fixer-uppers” that require a substantial investment to be airworthy.

    • Thank you for taking the time to read and consider my article. We can agree that in days past, sporadic aircraft have been auctioned and generally speaking those aircraft were less-than-spectacular examples of airworthiness. Simply stated, these aircraft were liquidated by auction just as you describe. However, I am afraid that you are confusing a liquidation with a live and luxury aircraft auction held by an accredited auction house. Mecum, Sotheby’s, Christies, and Barrett Jackson, are not liquidation auction houses, nor is Assent Aeronautics. These are accredited luxury auction houses who present some of the world’s finest assents for sale through a transparent and open auction process. You are at a bit of a disadvantage as since my article was submitted for publication, Assent successfully held our first ever Live and Lux Platinum Aircraft Auction which included a 2018 Robinson R66, 1998 Citation Bravo, 2014 Challenger 605, and 2002 Falcon 2000 among others. The R66 was presented with less than 50 Hours Total Aircraft Time. So while it is true that aircraft can be liquidated by auction, that is not the solution that I am advocating for, or believe will bring the long sought transparency and joy to the acquisition process that Assent Aeronautics, the world’s first luxury aircraft auction house has and will continue deliver for the industry.

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