In the title, exchange the word “winner” for “buyer” and the one who didn’t have their offer accepted for “loser” and it’s the perfect analogy for those currently looking to purchase a preowned business aircraft. That is how the participants in today’s short supply feeding frenzy feel about themselves.

Other new terms are also popping up in our vernacular, such as blind auction and sealed bid auction. The process of choosing the winner in this process is changing rapidly, and not in a very positive way.

I had a client say to me recently that he has never worked so hard to try to give four different sellers $15 million unsuccessfully, as this process of trying to buy an airplane has been difficult for him. So the question then becomes: how long can we keep losers motivated to stay in the game?

When one airplane comes on the market in the morning and by lunch there are 10 full-price offers, the idea of how one can be the winner in this process becomes murky. I see some aircraft brokers saying they are going to list an aircraft for sale on Monday and not respond to any offer until Friday, and then sell to the highest bidder. This open bid period is not bad and we as a company work very hard to keep the idea of due diligence a healthy part of the transaction.

Considering offers based on when they come in and dealing with them in that order has all but vanished from our process. The idea of an airplane staying on the market 200 days or longer is gone. In fact, we used to brag about our company’s average days on the market for airplanes we represented. Back then, we felt it was amazing to have an average of 57 days from listing to an accepted offer. Today it is about five days.

It was only a few months ago that brokers and sellers were still listing airplanes with asking prices. During that period, it was prudent as a buyer’s representative to suggest to our buyers to offer the asking price. Now even that is over and the new listing strategy is to list the airplane at “make offer.” This leaves room for the sellers to give the buyers some vague guidance on pricing then stand back. The net result is often an even higher selling price than what would have been contemplated with comparisons to the last sale in the market.

I am not suggesting any of this process is wrong. It is what would be expected with the current supply/demand dynamics. Why not try to capture for your selling client the greatest amount of money possible? I am also watching dealers pay retail for aircraft and then remarketing them to again reset retail. This is of course the traditional definition of buying for resale but creates further competition for becoming a winner in this market.

What will end this current cycle in our market? Several things. One scenario could be like in 2007/8 when the global economy shuttered, the price of aircraft—which had been selling for a 10 to 20 percent premium—dropped 50 to 70 percent overnight. A repeat of those conditions would be the most catastrophic reason for an immediate drop in value and an immediate shift in supply.

A less radical and more hopeful reason for a shift, though not as dramatic, is that the corporate operator segment of our industry, which has been dormant for the last two years comes back into play. Due to Covid and the lack of travel among this segment, there has been no real trading to speak of.

When this important segment comes back, they will not deplete the inventory but instead, keep it more balanced by bringing an airplane to the market for every new aircraft purchased. This will potentially increase supply rather than kill demand and would be a healthy nudge of the pendulum.

Regardless of the reasoning for a market swing, it is incumbent on us as an industry to keep our buyers whose offers were not accepted interested and motivated to stay in the game and not retreat to the fence. That would bring a complete stop to our forward progress.

Jay Mesinger is the CEO and Founder of Mesinger Jet Sales, an international aircraft brokerage firm. With 48 years of successfully buying and selling aircraft, Mesinger Jet Sales has a global reputation for personalized, transparent service.