Don’t Tell The Pilots My Private Jet Is For Sale

The subject line in the email from private jet broker Lee Aviation Services was headlined, “Off-market HondaJet.” It continued, “Our off-market HondaJet is a rare find, and it is an excellent opportunity for those looking for a state-of-the-art aircraft that offers exceptional performance, comfort, and convenience.”

“There are airplanes for sale, and they’re not listed anywhere. If you need to sell your plane for whatever reason, and you know your pilots will lose their jobs as soon as you sell it, you don’t want them just quitting and walking away. So, some owners go to their broker and tell them to do it quietly,” says Steve Main, Vice President of Transactions, Mente Group, a Frisco, Texas-based broker and consultancy with over $8 billion in transactions.

“Owners usually don’t want the crew knowing, particularly in the current challenging staffing environment. We are seeing a significant increase in off-market aircraft as owners are now saying, ‘Perhaps, I don’t need a plane,’ and are worried about recession and value loss,” says Dan Jennings, President of The Private Jet Company, which is based in Palm Beach Gardens, Florida. “Inventory has more than doubled in the last quarter for off-market planes. We have five ourselves and know of more than 25 planes off-market.”

While Main estimates that off-market inventory makes up less than 10% of the market, that number is growing as the number of preowned private jets for sale increases from record lows.

Jennings adds that the increase in off-market jets is “normal in a declining market.”

Investment bank Jefferies reports that used business jets for sale in March 2023 rose by 53% year-over-year and were up 29% over the past six months.

Steve Varsano, CEO of The Jet Business, a brokerage famed for its London, England, street-level corporate aviation showroom, says most off-market inventory will end up being listed.

He says off-market inventory is not related to losing pilots but a timing issue. “When we are bringing aircraft to the market, we first go to other brokers we know who are credible, have real clients, and are not just fishing,” he says. That can be a three-to-four-week window.

However, brokers say it’s often hard for consumers to find accurate listings, anyway. Free websites and magazines with aircraft for sale are filled with fake listings, they say. The tail numbers are “whited out” and instead of listing prices, they read, “Call for price.”

Brokers with those type of listings, they say, are simply fishing for customers.

“You have billionaires in their bathrobes lying in bed looking at these sites,” says one broker.

Varsano says the listing websites are akin “to looking for a wife on the Internet.”

While Main and others use databases like JetNet and Amstat, which cost thousands of dollars per year to subscribe, they also work the phones, seeking to bring clients aircraft that have not yet officially come to market.

Jay Mesinger, CEO/President of Boulder, Colorado-based Mesinger Jet Sales, says not telling your pilots is a bad move. He says with the job market so strong, the best strategy is to bring them in the loop and give them a bonus for staying until you sell.

Varsano says it’s hard to leave your pilots out of the loop since you need to show the jet, and pilots are often involved in keeping various records and logs buyers will need to access.

One area everyone agrees on is the myriad of reasons inventory is going up and prices for preowned jets are decreasing.

A shortage of pilots, increasing pay for pilots, and long waits to get pilots trained are causing some owners to sell.

American Airlines and Delta Air Lines each recently said they will raise pilot pay up to 40%. Pilots at NetJets have begun a public pressure campaign seeking more money.

“(Private jet pilots) don’t want a 5% increase. They want $50,000 more. They also want quality of life,” says Varsano, noting annual salary for a Gulfstream G650 pilot can be over $350,000.

The waiting time for initial training can be up to a year, according to Mesinger, who says inflation in operating costs is driving companies and owners to reconsider ownership. The cost of the engine, avionics and airframe insurance programs that help owners mitigate high-cost events are increasing as much as 15-to-30% instead of the traditional 2-to-3%.

Parts shortages and the increased time an aircraft is down for maintenance and inspections mean owners are saying, “This isn’t as fun as it used to be, or I don’t use the aircraft enough to justify it,” Mesinger says.

Another factor increasing the used private jet inventory is corporations pruning back on their fleets. After flight departments were on hold during the Covid travel lockdown, just as activity was restarting, companies are now facing a mix of decreasing profits, a possible recession, global instability that has cut travel to China and Russia, as well as rhetoric from climate campaigners.

Other factors include rising interest rates for buyers who financed their jets, first-time buyers who are realizing they underestimated the cost of ownership and overestimated how much they would use it, as well as management companies that overpromised charter flight hours as a way to offset those costs.

At the same time, the brokers say prices for used private jets are still higher than pre-Covid, so some owners see it as a chance to sell while values are still strong.

“Buyers not three deep anymore,” says Janine K. Iannarelli, Founder and President of brokerage Par Avion Ltd.