Embraer Phenom 100
Embraer Phenom 100

Preowned: A New Breed of Aircraft Broker

Manufacturers are offering to help you sell your old airplane when you purchase a new one. Should you let them?

Wary of taking trade-ins in the post-2008 era, business jet makers are instead offering to market customers’ old aircraft gratis. The majority of preowned airplanes in Gulfstream Aerospace’s inventory are being sold on behalf of customers, according to the company. Meanwhile, about 80 percent of the preowned inventory at Textron Aviation—parent of Cessna, Beechcraft and Hawker—is brokered rather than taken in trade, according to president and CEO Scott Ernest. 

The trend has traditional brokers crying foul. “We’re promoting their products and they’re coming behind us and taking food off the table,” says Andrew Bradley, president of California-based brokerage Avjet.

Sour grapes? Maybe, but brokers cite reasons why they think having manufacturers market your used aircraft is not a good deal for you, either. 

“There is no such thing as free,” Bradley continues, contending that aircraft makers are “just tacking a quarter million dollars onto the purchase price.”

Steve Varsano, founder of the Jet Business brokerage in London, agrees. “You get what you pay for,” he says, suggesting that smart owners are skeptical of free service pitches. “They’re going to think, ‘You’ll sell my $20 million jet for free? What idiot is going to do that?’”

Free or not, George Marburger, a managing partner at Jeteffect’s Palm Beach brokerage facility, questions the level of manufacturers’ commitment to selling consigned aircraft. “They have a vested interest in selling the aircraft they own. I only make money when I sell your airplane,” he says, adding, “Are you really going to give them a G550 to sell if they have three [of their own] in inventory?”

Chad Anderson, president of Jetcraft in Raleigh, North Carolina, charges that aircraft manufacturers have a conflict of interest in pricing preowned jets properly. “They have counseled listing clients to keep their pricing up, helping them maintain their residual values,” he says, but as market prices have continued to decline, “the client ends up ‘chasing the slide,’ and that’s a very costly position for the owner.”

Asked about the advantages of listing with a manufacturer rather than a broker, Gulfstream cites its “very good exposure to the worldwide market,” and Textron Aviation points to benefits including its knowledge of the aircraft it builds, access to factory-direct service teams, ability to ensure the aircraft is in optimal condition, and the parts and maintenance programs it can offer the buyer.

As to brokers’ charges regarding pricing, a Gulfstream spokesperson responds, “We’re one of many organizations offering aircraft for sale. We don’t control the market; we simply sell in it.” Says a Textron spokesperson, “We see our role as simply explaining to owners the value of their aircraft and finding a customer who will match that fair market value. Stabilized resale values across the industry benefit all owners with respect to maintaining optimal value for their asset.”  

Large and Light Jets Did Best

The low and high end of our market sample in the chart below held up best over the past two years. The average asking price for the Phenom 100, the lowest priced of the 10 aircraft, dropped only 1.5 percent while the average asking price of the Global 6000—the highest at $52.25 million—slipped just 2.3 percent. Both are in short supply, with 6.2 and 6.3 percent of their fleets on the market, respectively; the CJ2+ is the only model here that has less availability. But while Phenoms typically spent about as many days on the market as other light and midsize jets, the average Global stayed on the market for appreciably less than half as many days as the other four large business jets on the chart. 

James Wynbrandt is a private pilot and regular BJT contributor.