Beyond the aircraft: the human side of a transaction

Business aviation is an extraordinarily technical industry. We spend our days talking about maintenance programs, inspection intervals, engine reserves, avionics, operating costs, aircraft performance and market values.During an acquisition or sale, there can be hundreds of pages of records to review and any number of financial and technical questions to answer. A broker must understand those details, but technical knowledge is only the beginning.An aircraft transaction also brings together the people surrounding the owner: a family office, flight department, financial and legal advisors, lender and technical representatives. Each has a responsibility, and each may see the same issue differently.The owner is asking whether the aircraft will do what the family or company needs. The flight department is thinking about what it'll inherit once the airplane arrives in the hangar. The CFO is looking at cost and capital, and the attorney is looking for risk.That mix of perspectives is healthy. It's also where much of the real work begins.What the numbers don't showAs expected, aircraft pricing gets a tremendous amount of attention in an aircraft transaction because it's easy to identify. The same is true of inspection costs, upcoming maintenance and operating expenses. We can put numbers around all of them.The harder questions involve what those numbers mean to the people making the decision. A maintenance item may be straightforward, but the buyer wonders why it wasn't identified earlier. The seller may feel the request is unreasonable. Someone else starts questioning what the finding says about how the aircraft is maintained.What begins as a technical issue can quickly become a question of trust.In the past 30 years, I've watched relatively small items take on outsized importance for that reason. I've also seen much larger findings resolved because the people involved trusted the process and understood what they were dealing with.Aircraft are complex machines, and inspections find things. The more important question, however, is whether new information changes the risk of ownership or simply needs to be understood, priced and resolved. A large part of advising through an inspection is helping a client tell the difference.When momentum starts making decisionsOnce a transaction is moving, there's a natural desire to keep it moving. The inspection slot is reserved, the deposit is funded, attorneys are working toward closing and people may have traveled to see the aircraft. The owner may already be thinking about the first trip.That momentum can start affecting decisions more than anyone realizes.Sometimes pressing for clarity is exactly what's needed. Other times, a buyer or seller needs another day to understand why a finding or request matters. Another conversation may help. Sometimes everyone is better served by waiting until morning.Experience helps us recognize those moments, although I'm not sure they ever become easy.The hardest conversations are often the ones you need to have with your own client. There are airplanes that clients become attached to that I wouldn't want them to own. Some sellers genuinely believe their aircraft is worth more than the market supports. An inspection can uncover enough new information that a transaction that made sense two weeks earlier deserves another look.By then, everyone has invested something in getting the deal done. Money, time, energy and often some emotion are already in it. But that investment can't be the reason to keep going. My responsibility isn't simply to preserve the transaction. It's to help the client decide whether it still makes sense, including when the answer is no.Data needs contextWe have more data available today than at any point in my career. Market history, maintenance information, ownership costs and comparable aircraft all help us understand where an aircraft fits and what the risks may be.Experience gives that information context. Two airplanes can look similar on a spreadsheet and still represent very different ownership opportunities. A seller's behavior or a change in a client's tone can reveal something that isn't obvious from the numbers. I don't view that as instinct competing with data. Most of the time, instinct is experience applying what we've seen before to what's happening now.Artificial intelligence should help us organize records, analyze markets, compare aircraft and identify patterns. I expect those tools to become part of how many of us work.Where I'm more cautious is assuming that better information automatically produces better judgment. A model may tell us an aircraft looks expensive relative to recent sales. It'll have a harder time understanding why the seller is holding that number or whether pushing today helps or hurts the transaction. Identifying a maintenance exposure is one thing; understanding how it's affecting the buyer's confidence in the entire aircraft is another.Technology can make us better informed. But we still have to decide what the information means in the context of the aircraft, the transaction and the people involved.People don't come with a manualMost people I know in this industry got into it because they love airplanes. I certainly did. The irony is that after spending my career around them, I sometimes find the airplane to be the more predictable part of a transaction. It has maintenance manuals, defined inspection requirements, records and a history we can study. We can usually form a reasonable view of what's coming due and what ownership is likely to cost.That said, people don't come with a manual.They have different tolerances for risk, different motivations and different ways of reaching a decision. They don't always say exactly what's bothering them, and sometimes they're still working that out themselves.For all the technical knowledge this business requires, that may be the part that matters most. The airplane gives us a manual. The people require us to listen, understand what's really driving the decision and use our judgment about what comes next.Mike Mikolay, with 25+ years in business aviation, has facilitated 950 aircraft transactions worth more than $14 billion. The founder and CEO of Mikolay Jet Group, he has held key roles in reputable aviation organizations, including serving as a senior executive at one of the world's top three brokerage and consulting firms.