George Rependa
THE BRIEF
COMPANY Executive Aircraft Services Inc
FOUNDED 1989, Brampton, Ontario
EMPLOYEES: One
SERVICES: Buying and selling private jets
My clientele are the ultra-rich, probably the biggest billionaires in the world-actors, politicians, even countries. My clients are well known, but they want to remain anonymous.
In Canada, there aren't many brokers and aviation-related consultants. There are a handful of us, and we're all fairly busy. But you've got huge expenses. Out of a couple of hundred thousand dollars' commission, you spend $100,000. You not only have to foster the business, you have to visit the client. I get called to meetings in places like Monaco where I need to be on a boat. I'm expected to get myself there. Last-minute travel is not cheap. There are lots of times when I get called to investigate the possibility of purchasing an airplane, and nothing comes of it. It can cost me 30 grand to travel three-quarters of the way around the world to look a guy in the eye and shake his hand.
Selling an airplane is not like selling a washing machine. You can BS your way through a washing machine. An airplane has got minute details that are not necessarily apparent. It's up to you to tell the purchaser how those details will impact the future value of the airplane. You have to identify the airplane [to buy] set up the financing, negotiate the contract, do the mechanical due diligence on the plane, do the corporate due diligence on the sellers, then negotiate the finer details. I've had deals carry on for four or five months. You need to know how to finance the deal if the buyer doesn't want to lay out the capital, the direct and indirect costs of operating the airplane, how to offset some of that cost by sticking the plane into a charter service. If you're not able to expound on all that, you're not going to get the sale.
And not every plane is 100% what it should be. You need to be up front: 'This piece of avionics is outdated. You'll probably have to spend another $250,000 in the next year on maintenance.' That airplane will be for sale down the road. If the individual comes back and says, 'That was one of the better airplanes I've owned, it was a fair deal, please sell it for me,' you've done a good job. Repeat business is very important. This industry is very small. I would say 90% of my business is through word of mouth.
I'm a commercially rated airline transport pilot. For as long as I remember, I wanted to be a pilot. I started gliding at 15. I joined the Air Cadets. After that, I went to a specialty aviation school. I'm now taking helicopter lessons. It gives me that bit of an edge to show that I know what I'm talking about.
In a good year, we buy or sell 20 airplanes. In a slow year, we're lucky to do one or two. With the explosion of demand for airplanes in the last three years, it was difficult to keep up. The subsequent downturn has put a stop to it. There's a lot of cash sitting on the sidelines, waiting to make the buy.
What we make on a deal depends on the value and complexity of the transaction, and the relationship with the client. There are times when you can charge up to 4% commission; other times, you can't even charge half a per cent. I try not to prosper on others' misfortunes. If they need to sell the airplane because things are going badly, I'm not going to charge top dollar [commission] If we purchased an airplane for the sake of resale and I'm able to get good money for the client, then he also shares. My biggest commission ever came from the Middle East. They paid me in the mid six figures, or in the vicinity of 4%, for a mid-sized jet. But it's the business they have consistently forwarded my way that really counts."
GOING THE EXTRA 1,000 MILES
Spend like the client "A client flew in with a friend to Hamburg to see his airplane completed. I was there in advance. They were only there for six hours. I set them up in hotel rooms so they could take a shower. After they saw the plane, one said, 'I really need to go to Geneva.' I purchased a flight on a Bombardier Global Express. That runs $6,000 to $7,000 an hour. It all cost me $20,000. The sale grossed just under $500,000."
Make time for the client "We had a customer who was financed by a Turkish individual. The Turkish individual came to Canada and asked me to visit. It was the day before Christmas. We had family commitments. It was snowing and took me two hours to get downtown. He just wanted to thank me for taking care of his friend, whom I've sold four airplanes to, and counting."
If you want to sell jets, it helps to know how to fly them
Sean Silcoff