Mente Group - US market is changing on pre-owned aircraft
 
Achieves its best year ever on transactions.


Tuesday 1st November 2016

Dallas, TX based business aviation company, Mente Group, is at NBAA BACE this week promoting a Gulfstream IV (#N44BB) for sale on the static display at Orlando Executive Airport.  The 1987 built aircraft, owned by a private individual, is distinctive with a brand new Gulfstream designed cabin modelled on the G450, with Rockwell Collins Venue, Aircell (Gogo Inflight Entertainment), a forward galley and a vacuum toilet. Uniquely, it is the only Gulfstream IV in the world equipped with synthetic vision. The aircraft reflects an increasing trend in the US whereby owners are buying less expensive, older aircraft, but investing in the specification and introducing up to date avionics, IFE and state of the art cabin refurbishments.

"Generally we find the market is receptive to those who take advice and properly price their aircraft," said Mente Group COO Richard Emery.  "If the price is too high, the aircraft will sit for sale for a long time. Typically we are looking at over 200 days to sell a pre-owned business aircraft - on most models.  However, if they are competitively priced they can sell within 90 days." he added.  "Choice in the number of large cabin, long range aircraft, which Mente specialises in, is diminishing, and as a result resale values on aircraft of less than five years is stabilizing."

Sales across all of Mente's business lines have been strong and activity prior to year-end has been positive across all categories including small, midsize and large cabin, Richard notes.


"With our client base we are seeing limited activity on 'new' aircraft transactions, which we attribute to a generational shift," he says.  "CEOs and business founders have the mind-set of a 'capacity sharing generation' akin to Uber, Lyft, and Airbnb millennials.  They are more diverse and less brand loyal.  They will be prouder that they struck a good price on their aircraft, rather than boast they picked up the latest business jet.  The status of a new aircraft transaction is less important to our clients.  They are value driven and price conscious," he surmised.


 "Today's problem is that there are too many models to match market demand.  If product development slips the brand is at risk," opines Emery, putting the OEMs under a lot of pressure.  "When an OEM cancels a programme, it causes the aircraft in question to diminish in price," he said.

Mente's view is no matter what the brand is - to succeed it needs strong product development.
 
The market shows that pre owned inventories are flat, not growing, and we are not seeing the prices firming with a declining inventory of aircraft. The Holy Grail in business aviation he suggested is speed.  With regard to cabin size and range combinations, aircraft types like the Gulfstream G650 and Bombardier Global 7000 are flying farther faster.  Emery believes that there is a market for a next generation of business jets and potential for supersonic transportation.

The majority of Mente's business transactions are North American centric.  "We are seeing good buying opportunities internationally, but we are not seeing the volume of international buyers Mente has historically serviced.  This is why we want to grow our international presence and expand the brand so we are looking forward to holding meetings at NBAA with potential international partners," he highlighted.

About Mente Group LLC

Headquartered in Dallas, Texas, USA, Mente Group is a leading business aviation advisory company specialising in sales and acquisitions of business jets including fleet planning, appraisals, audit and transaction services. The company, formed in 2009, serves large corporations, growth companies and private individuals worldwide.

www.mentegroup.com