BCA Article - April 1st, 2010
"Hanley Optimistic for pre-owned aircraft sales in 2010"

by J.P. Hanley,
70 Business & Commercial Aviation ■ April 2010 www.AviationWeek.com/bca
FlightWatch

J.P. Hanley, the president of Corporate AirSearch International, a small, privately held South Florida brokerage that has been in business since 1983, characterizes today’s previously owned turbine aircraft market as “stagnant.” “Unless your aircraft is priced aggressively,buyers will move on to another more-motivated seller. Buyers are making their best and last offer first, and [if they can’t cut a deal], they move on.” However, Hanley adds that aircraft sellers would be wise not to accept some low-ball bids. “While it is still a buyers’ market, it appears that the majority of buyers have
unrealistic expectations regarding the present market value of turbine aircraft. They are making offers 30 percent or more below asking prices, which have
already been adjusted to current market conditions.”
Some buyers are using the recession to justify their low offers, explained Hanley. But he believes that, with the U.S. economy showing signs of growth, some prospective
buyers risk losing out on opportunities to get an excellent deal on an aircraft that they will most likely be
able to sell for a profit in a couple of years.
Tight financing has made it difficult for some would-be buyers to purchase an aircraft, so those who have cash
have been able to negotiate great deals, notes Hanley. Gulfstreams and Challengers have started to move, as corporations and high-net-worth individuals have been
able to purchase these large airplanes at a substantial discount from several years ago. Hanley predicts a trickle-down effect: “As the larger aircraft begin to sell, the midsize aircraft will rebound, and then the light jets
and turboprops will follow suit.” “Typically, the corporate aircraft market lags the stock market by six months,” continued Hanley. “So once the stock market continues on an upward trend for a six-month period, we will see buyers’ confidence return and more aircraft trading hands. “Our company was very fortunate in 2009, as we were able to sell a handful of aircraft. But it was definitely not our best year,” reports Hanley. “While we are off to a slow start in 2010, I am positive that this is going to be a great year. The buyers have had their turn over the last two years, and those that had
to sell for business or personal reasons have done so. So we do not foresee any more fire sales.” “There is a difference of opinion on whether we have reached bottom,”
continued Hanley, “but, as an optimist, I believe we are there, and things are going to get better. Just like the boom times from 2002 to 2007, nothing lasts forever, not even this downturn.” Nevertheless, Hanley says, “It will be
quite some time” before values return to peak levels. “So unless you are prepared to keep your aircraft for another three to five years, I would not suggest pricing it at
or above the market, but actually slightly below the market, so buyers will take notice.”

Market View: J.P. Hanley, President,
Corporate AirSearch International Inc.
J.P. Hanley



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