What can kill a new business aircraft order – fast

“It takes years to get them to agree to buy, but it can take ten minutes to kill it.”

Corporate flight department manager

A new corporate aircraft costs millions, or tens of millions, and we all know that an economic downturn in general (or a series of poor earnings reports in particular), can cause a delay, even a cancellation, in an order that you’ve already taken to the bank.  Anyone who was around for the Great Recession of 2008-09 knows this all too well, and certainly the dampening effects of that economic tsunami are still felt somewhat today in business aviation; not much more needs to be said about that.

But in the aviation research we’ve done, there’s at least one other key circumstance that can kill an order, and that’s a change in the purchaser’s CEO, or other senior staff; the new management wants to “review all expenditure plans over X dollars,” and that new airplane sale is suddenly “on hold.” And of course the reason for new management may in fact be those terrible earnings reports, or a merger/acquisition deal, but even if it’s a “normal” transition there’s a new guy who wants to review expensive purchases. Regardless of the reason, your sale is suddenly in jeopardy.

What can you do about it? Maybe nothing, but at the least you can try to always be aware of changes in management at client companies, and work quickly to provide as much support to the aviation department to bolster their case for going through with the purchase. The company already (assumedly) understands the value of business aviation, so it’s a matter of justifying the new expenditure upgrade: a more efficient aircraft with better D.O.C. and less maintenance to worry about; an aircraft with longer range to better serve a geographically growing business; an airplane that’s bigger, faster, etc. to better serve changing mission requirements. Or, frankly, it could be the new CEO is used to Gulfstream airplanes, and isn’t keen on the new Challenger just because it’s not Gulfstream. Whatever the reason, get there fast to support the flight department manager/chief pilot with the best informed arguments you can bring to bear.

In fact, you should have a formal monitoring system in place (make it a part of your CRM) to keep track of such corporate change and respond rapidly in a systematic, pre-planned fashion.  It’s like any crisis management plan: you hope you never need to implement it, but it sure is good to have one on the shelf and ready to go when a bad situation arises.

(One circumstance that seems to have relatively little impact on an order is the announcement by a (competing) manufacturer of a new aircraft product that might seem to have better mission fit. While the flight department will do their managerial duty to evaluate the new offering, most of the time the potential new product will have little impact on in-place plans.)