This post is the first in a “Day in the Professional Life” series where we ask business aviation experts to give us their observations and insights into how they navigate the industry. First up, Jeremy Cox, Vice President of Jet Brokers, tells us what it’s like being a broker in today’s climate. The views of Mr. Cox are his own are not necessarily the views of JETNET LLC.
When a potential buyer responds to one of your advertisements Murphy’s Law usually applies, i.e. if it has Thrust Reversers then the buyer is looking for an aircraft without them; your aircraft doesn’t have a belted potty, and the buyers wants one with it; “the aircraft is in Italy, eh? Well I only want a U.S. aircraft”; the buyer wants 30,000 cycle turbine disks, and your aircraft doesn’t have them; “No engine Manufacturers Service Program (MSP), sorry I’m not interested”; and the story goes on and on.
All joking aside though, it always makes me laugh when a buyer approaches me and asks: “what’s the lowest price that you will sell for?” Of course the correct response is: “well what’s the highest price that you will pay?” Better yet the buyer enquires about one of your exclusive listings and then proceeds to pull it apart over the phone so far to the point at which you are even beginning to believe that it is a horrible specimen, then when it comes around to talking about the buyers trade-in aircraft, you are effectively told that somehow in the case of this specific aircraft, the factory made a mistake and built it much better than all of the other aircraft that came off the same assembly line. Too funny!
I love the buyers that firmly believe that since the day that they bought their aircraft, every dollar spent on maintaining it, has actually increased its value. Then you have the sellers who tell you that their aircraft is absolutely perfect, but when you go through the log books you discover that it has been through a tornado and hanger collapse, or better yet, the landing gear has never been overhauled and it is now ten years overdue. What a perfect aircraft.
Of course these stories and more are all in a day’s work for me. Unfortunately we all have the intent to write a book about our experiences, starting on the day of our retirement. Very few of us actually do retire though, mainly because we are all having too much fun, or maybe it is just because we are scared of not being able to continue putting bread on the table. When all of these books are finally written, no publisher will ever want to bring this type of book to market, because there will be hundreds of them!
No seriously, we brokers are many things to all sorts of people. Most of us are either current or ex-pilots or aircraft mechanics, or both. We are model specific experts, aviation consultants, aide-de-camps, confidents, advisors, enablers, playboys, accountants, corporate deacons, and carpet baggers. We sell time when it is really speed. We sell exclusivity, when we ourselves have to schlep all across the globe on the miserable airlines. We work for tens of thousands of dollars in each deal, which on the face of it is totally cool. We choose not to work any day of the week that we feel like; a dream job in-fact. Sure it is. Now when you look at all of the hours spent on sitting at a pre-buy, auditing log books, dialling for dollars in your office, spending boring weekends in Hiltons waiting for a buyer’s money to show up into escrow, creating spreadsheets and reports for the many ‘must have it now’ self proclaimed buyers that never actually buy; well you get the picture. So you made twenty grand on your last deal. It took you three months of effort to be able to bank that commission, but if you adopted the attorney way of doing business and you kept an accounting of your time, you will discover that instead of having worked 480 hours like any normal office worker would have in their job over the same time-span, you have instead racked up 840 hours on your deal, with a subsequent hourly rate that equals to about $23.81 an hour; which further equates to only $49,504 as an annual salary if you chose to work the standard 2,080 hours per annum, and there are no fringe benefits to go with this pay-rate for instance like healthcare, a company car, paid holidays, and the like.
Of course most of us do much better than the average office worker, mainly because we are truly entrepreneurial capitalistic-road warriors that will never give in. I am damn proud of what I do. I may not have the normal 9am to 5:30pm existence that most call their own. There really are no hard-arse bosses to cow tail to, except for our-selves, and speaking of myself, I am the meanest slave-driving bastard boss anyone could possibly have. I feel sorry for my employee…i.e. me! Oh and on the subject of paying federal and state income taxes – I like paying tax. Why? When I am paying tax, then I am earning money, and usually good money at that, and therefore I have a totally different attitude towards taxes than most civilians.
Sometimes our wives can take the proletariat view, especially since most of our wives have to work because we must have health care insurance and the ability to pay the mortgage every single month, without fail. Feasts and famines are the nature of our game. Anyhow I digress a little, so back to that conventional view that sometimes gets vocalized by our wives-like for instance: “I would be fired if I turned up at my office at 10:30am! Or aren’t you late-shouldn’t you get going instead of playing with that Blackberry/iPad/iPhone/Droid/Laptop, etc?” Hang on a minute dear, I’m working even though I am not sitting in my office at the moment. She also never sees us sitting in an FBO Lobby at 01:30am trying to warm-up after taking night-time shots of an aircraft, or how we had to leave our hotel at 03:00am to jump the earliest flight out to meet the buyer’s pilot at the same terminal, and to then ride over to the hanger where our listing happens to be based. No, there is not much conventional structure to our working lives, but it is safe to say that when we do finally make it to our Barco-lounger at home, I bet that most of us are ‘sawing logs’ within minutes of our bottoms hitting the seat-cushion.
Oh yes, and let’s not forget how we all get to fly to all of these fabulous ‘named’ places around the world, and yet did we see anything? Hell no, we hardly even left the damn airport, and when we did it was to make the perimeter road-run to the Airport Hilton, or better yet to leave the base to buy fresh underwear and socks because there is a hang-up with the buyers funds. The Spanish are masters at being trite on this subject: ‘Mañana just means: not today. It also means maybe, instead of yes-tomorrow-okay?
What are our fears? Well to start with, we all are driven by the possibility of having a year or more without any earnings whatsoever. 100% commission is just as it says. You close a deal, and then you get a commission. If you don’t close any deals, then you effectively are a full-time member of a very expensive hobby club or day care program. How many pilots or mechanics call on our listings because of one of the following reasons: 1. They want to get out of the hot-ratty old C90 King Air, and convince the boss that I Hawker would do a much better job for him. This is unlikely since the pilot’s boss bought the aircraft really only so he could make the 300nm hop to his son’s college town to see his son play football. Sale likely? Not bloody likely. 2. They have a buddy who knows a friend who flies right seat for a guy who is thinking about upgrading into a Falcon 50. Sale likely? Probably not on your life. 3. They are a ‘bedroom broker’, and want to get a $100,000 commission for hooking you up with their buyer who might be interested in the Falcon 10 that you have listed for 3%. Sale likely? Only if Mr. Bedroom broker agrees to back-to-back the deal himself, which he is most unlikely to do.
What are our hopes? Well to start with it would be nice to not be treated or thought of in the same vein as used car salespeople. Truly, most of us are nowhere close to this analogy or vision and yet we can’t quite shake this image. Unfortunately bedroom brokers are usually the exception to this rule and in-fact are worse than any used car dealer that I have ever done business with, but that, they say, is another story. No, what would really be a step forward for all of us that are hanging a shingle outside that advertises that we are open for business as a legitimate aircraft broker, is for either the FAA or one of the alphabet groups to mandate that we brokers must be treated and considered the same professionally as are stock, bond and real estate brokers. There must be a certification and license renewal program implemented for our segment of this wild and wonderful world of the aviation industry. Maybe then the bedroom brokers might get ousted from the marketplace, and instead they can return back to either flying or fixing aircraft, or to selling used cars for their living.
If you are finding things tough now, you had better remember the good times, and then double your efforts to recreate them in today’s squiffy and limp marketplace. The truth is that if there is anybody out there that will directly contribute to the recovery of this economy-fast, it is you. Why? The chances are pretty strong that if you are reading this blog entry, then you are likely another aircraft broker like me. Then reread all that I have written above for your answer. If what we do was easy, then everybody would be doing it. As somebody once was quoted as saying: “the elevator to success and happiness is broken. To get there you will have to take the stairs, one step at a time.
Sincere Best Regards,
Jeremy R.C. Cox
Professional Turbine-Business Aircraft Broker… ‘JetBroker’ for short.
The opinions of this blogger do not necessarily reflect those of JETNET LLC.