In this article, we’ll explore three primary avenues and their nuances, guiding you through the pros and cons of each aircraft sales strategy.
Private sale: The fast lane
A private sale focuses on relationships rather than wide-scale marketing efforts. It’s a swift process, typically involving only a small number of known, interested, and credible counterparties, catering to sellers aiming for a rapid transaction. However, it’s essential to note that while this method is speedy, it often sacrifices achieving the absolute best deal. Moreover, it is a less structured process with lower transparency and governance standards, which might be crucial for certain stakeholders requiring evidence of that the optimal transaction outcome was achieved.
Auction: An open bidder battle
Auctions present an opportunity to sell aircraft openly to interested bidders. Two distinctive types exist within this category:
Public Auction: This type of auction is open to anyone interested in making an offer on the aircraft. It’s a broad and public process, granting access to a wide audience. However, the seller should be aware that this method requires the public disclosure of substantial aircraft information and access to the auction and information by low-quality bidders, which may not be in the seller’s interests.
Private Auction: Preceded by a qualifying process, this auction allows only pre-qualified bidders to participate. While the number of participants will be fewer than in a public auction, the quality of bidders tends to be higher, often possessing an unqualified financial capability to close the deal.
In the aviation industry, where an auction process is employed, it is typically private auctions.
An auction is often faster than an RFP; however, by its nature, the seller is expected to conclude the transaction with the winner of the auction regardless of whether the pricing outcome meets their expectations. It is a useful process for reaching a deal quickly and through a structured and transparent process. However, there is a risk of value loss versus the flexibility and RFP process offers to sellers.
RFP: Controlled, structured selling
RFP (Request for Proposal) is a flexible and structured process that affords the seller greater control. This method allows for the creation of multiple qualification stages, offering flexibility to tailor the process according to specific needs. However, it demands more time and effort to manage, communicate, and respond to bidders’ expectations throughout the various stages.
Within RFP, there are two distinct types:
Public RFP: This involves the public dissemination of the proposal online, accessible to anyone interested. Although it reaches a broader audience, managing this process may not always be the most efficient or effective route, and some sellers may not wish to make their transaction or intentions to transact public knowledge.
Private RFP: Published exclusively to a qualified list of bidders based on specific criteria, this method invites a selective group, ensuring a potentially more suitable bidder pool. It’s a less time-consuming and cost-effective option that can yield outcomes similar to a public RFP but with greater efficiency.
While both private and public RFPs serve their purposes, our recommendation leans toward the private approach. Knowledge of the market and the right bidders is key. The private RFP, when executed well, can yield the same results as a public approach but with superior efficiency.
With extensive experience in conducting RFPs, a curated list of suitable buyers, comprehensive market knowledge garnered through global airline and aircraft investor relationships, and a track record of successful transactions, ACC Aviation stands as a trusted guide in navigating the intricate terrain of aircraft sales strategies.
For a seamless aircraft selling experience, leveraging ACC’s expertise, network, and proven track record is the key to unlocking the best deal. At ACC Aviation, our commitment to excellence in aircraft sales is evidenced by our successful RFP executions, curated buyer lists, and extensive industry connections. Let us guide you through the sales process and help you achieve the most favourable outcome for your aircraft sale.
Contact ACC Aviation to benefit from our wealth of experience in aircraft sales strategies and optimise your selling process.