Like many avgeeks, I have spent countless hours scrolling the internet looking at aircraft for sale. Whilst many of these ads were placed by brokers or aircraft owners, a large minority were placed by so-called aircraft dealers.
Unlike used car dealerships, whose role is remarkably similar albeit it with cars rather than aircraft, aircraft dealers are not as universally hated, with many in the aviation industry seeing them as vital to the industry.
Just not in the way they like to think…
What Are Aircraft Dealers?
An old joke in the industry is that aircraft dealers are kind of like a mixture of used car dealers and real estate agents, in the sense that they are unregulated (like car dealers) and are high margin (like real estate agents).
Essentially, an aircraft dealer’s job is to buy aircraft cheaply and sell them at a much higher price, doing whatever they can to increase the aircraft’s value in the meantime.
Unlike car dealers, who typically acquire their stock from auctions, aircraft dealers acquire their stock in two main ways: on the open market or through private sales.
To acquire an aircraft on the open market, dealers typically look through sites like AvBuyer, RightAero and Controller.com (where they place ads for their own aircraft), and search for aircraft not represented by brokers, or represented by small, inexperienced brokerages.
If one catches their eye, they inquire about the aircraft. And assuming they can get a good enough price for it, as well as the money to purchase it with, they will purchase it to sell on at a later date.
The other way dealers acquire aircraft is through private sales. These sites also allow dealers to place wanted ads or use their own company websites to lure in aircraft owners looking to dispose of their aircraft.
Typically, they offer a quick sale, but less than market value for the aircraft so they may offer the aircraft for sale as quickly as possible, in the hopes of selling it quickly themselves.
Due to how the aircraft market is – with prices for aircraft skyrocketing and collapsing over the course of the year regardless of the business climate – aircraft dealing is an inherently risky business.
After all, the price you pay for an aircraft today may be extortionate tomorrow or tantamount to daylight robbery. A good dealer learns to read the market and know when to buy and when to sell.
Different Types
Looking through AvBuyer, RightAero, Controller.com or one of their numerous competitor sites, you’d be remised for believing that all aircraft dealers traded primarily in private jets. And whilst the majority do, others have other niches to fill…
Helicopter Dealers
Based on the same principles, and often with the same clientele, some dealers have specialized in the acquisition and sale of helicopters, ranging from small GA-style helicopters to corporate/VIP transports.
GA Dealers
Perhaps the most active (at least by turnover) aircraft dealers are those who specialize in the sale of General Aviation (GA) aircraft, where there is both a huge market, and huge supply of aircraft.
As many of these aircraft are still flying 30, 40, 50, sometimes even 60 or 70 years after they were made, it is quite easy to buy old aircraft, restore them with a new interior, avionics, paint job etc. and sell them for a large markup.
Where private jets often stay on the market for well over a year, GA aircraft typically spend less than six months, meaning that there is a steady stream of business for these smaller margin aircraft dealers.
Warbird Dealers
Warbirds – that is, old military aircraft – are in high demand from both aviation museums, display teams and veteran military aviators who want to fly their old aircraft for fun, not war, years after both they and the aircraft they flew have retired.
To that end, dealers have focused on buying airworthy or static display warbirds to sell to this often cash-rich and highly motivated market.
Whilst many warbird dealers are content with merely trading warbirds, some have ventured into the restoration business too, employing specialist mechanics to restore the aircraft shells they buy.
Perhaps not surprisingly, there is more money to be had in this sub-niche, but it is markedly more risky as it often takes years to fully restore a vintage warbird, not to mention the stress of getting it declared airworthy again.
Broker vs Dealer?
When looking to buy or sell an aircraft of any kind, you’ve likely come across both brokers and dealers. And whilst their jobs are somewhat similar, they are wholly different from one another. In effect, it comes down to this:
Brokers make their money on commission (varying from 1-3% for certain aircraft, whilst sometimes as much as 10% for others) whilst dealers only make money when they sell their aircraft for more than they bought it for.
Other major differences between the two include the fact dealers own their stock, whilst brokers do not and that dealers tend to be based at airports and have their stock (aircraft) in hangars there, whilst brokers are often based in office buildings in the centers of major cities.
Aside from that, their jobs are pretty much the same: sell aircraft. Due to this latter point, brokers and dealers generally have similar-sounding names such as “XXX Aviation” or “XXX Jet” making it hard tell who’s a broker and who’s a dealer.
To add to this confusion, many dealers (especially the big ones – more on them in a second) pose as both brokers and dealers, especially if you’re looking to sell your aircraft and replace it with a newer model.
What many of them will tell you that they can help you with both aspects. First, they will give you the option to sell your current aircraft to them (at a value slightly below market value of course) or act as your broker (for a fee).
In many cases, they will push you to sell to them immediately, telling you that it will be quicker to replace your aircraft, and that you’ll get a higher price than if they act as your broker.
Next, they’ll try to sell you something from their existing stock (often showing you jets that don’t 100% meet your requirements for age, condition, cost etc.) which they stand to make more money from.
Assuming you don’t cave in, they will then act as your broker and contact other dealers and brokerages to search for aircraft fitting your requirements.
Upon selecting an aircraft you like, they then work with you to actually acquire the aircraft, including negotiating the price down and all the legalities.
Sadly, though this practice is somewhat unethical, it is routinely practiced in the industry (admittedly not by all, but by a large majority) making it almost impossible to distinguish the good from the bad.
Who Are The Big Players?
At present, the largest aircraft dealers (measured by revenue, average stock value over the last year and number of employees) are:
- Jetcraft
- Avpro
- Mente Group
- Aircraft Sales Group
- Global Jet Monaco
How do I Become an Aircraft Dealer?
Over the course of reading this article, you may have begun to wonder how you can become an aircraft dealer yourself as a potential future career. After all, for any avgeek, selling aircraft is a dream job!
To begin with, any prospective aircraft dealer should be intimately familiar with all types of aircraft. Just because you want to sell turboprops, or private jets, does not mean you won’t ever encounter other aircraft.
Prospective buyers may wish to part-exchange an aircraft you don’t specialize in, but your bosses may wish you to appraise its value. Without knowledge of these aircraft beforehand, your job will be much harder.
Sadly, dealerships seldom hire people they don’t know straight out of school. So instead, you would aim to contact dealerships in your area about internships, or part-time work you can do.
If this is not available, either because you live in an area without dealerships, or they simply aren’t available, acquiring other aviation-related work experience will greatly improve your chances. Sales jobs could also be another potential avenue.
From there, it is simply a matter of gaining experience, and if doing an internship, getting noticed. Once you graduate, you should then talk with your dealership about a full-time position, or reach out to dealers with your resume.
Most dealerships don’t even require you to have a degree in aviation, aerospace engineering or anything similar, just that you have passion for it and knowledge of different aircraft.
Though by no means a prerequisite, you could even show your passion and knowledge for aviation by gaining your pilot’s license, though this is quite expensive and may not be viable for some prospective dealers.
How Much do Aircraft Dealers Make?
Due to the very nature of their business, the incomes of aircraft dealers vary wildly as much of their income is commission-based. Similarly, basic salary also differs considerably from company to company.
As a general rule, however, first year aircraft dealers earn a base salary of around $50,000. Commission for actually selling one of their aircraft, varies from 0.1% to 1% of the asking price depending on their employer.
Depending on their skill level, individual dealers can work their way up to senior sales representative after 5-10 years, where their pay can range anywhere from $70,000 – $80,000 depending on the size of the dealership.
With more experience, a senior sales representative can be promoted to VP where they can bring in upwards of $100,000 before commissions.
Going further, VPs can be promoted to the rank of SVP or even Head of Sales where their base salary can vary from $150,000 to $200,000 depending on their individual skill, the size of their dealership as well as other factors like business climate.
It should be mentioned, however, that the vast majority of aircraft dealers are self-employed, one man bands. In this case, their income may be much higher, as they take home their profits, though as with running any business, their income fluctuates massively during the year.
Thanks to aircraft dealing being a high margin industry, many self-employed may only sell a handful of aircraft each year, earning an income of a few hundred thousand before taxes, whilst others may make millions.
What do you think about aircraft dealers? Would you ever work with one? Tell me in the comments!
Featured image courtesy of Andrew E. Cohen via Flickr.