Brian Proctor, founder, president and CEO of Mente Group was recently invited to lead a panel discussion at the prestigious Corporate Jet Investor Convention in London, England. During the discussion, titled “The Three Rs: Residuals, residuals and residuals,” Proctor drew on his expertise in the aircraft industry to lead the discussion and advise attendees about how to make the most of their aircraft investments, depending on their specific needs.
Proctor began by polling the audience on ‘average’ residual value decline for business jets. The audience’s majority response of 8.5 to 10% paralleled Mente Group’s findings which reflects a large shift from the 3.5 to 5% pre-2008. Proctor and the panelists discussed the global economic conditions that affect primarily small cabin models. Though economic conditions have less effect on the long-term residual value of large-cabin planes, depreciation on this class of aircraft may be as high as 15 percent during the first year of ownership. .
What contributes to this new norm? Brian and the panelists brought a number of factors:
- Lack of pricing discipline among manufacturers that creates uncertainty in the market
- Consumers preference of owning top of the line technology over loyalty to a brand
- A wider variety of choices compared to pre-2008
- A more global and mature market
- Decreased demand combined with a glut of aircraft on the market
Regarding the question, “Do we have too many large cabin models in the market?” panelists responded that the greater the selection of aircraft available, the better it is for the market.
As leader of one of the world’s preferred total aviation asset management companies, Proctor was chosen for his leadership role in the session because he knows the market, whether he’s advising a client on the right aircraft for personal use or a company for fleet purchase and maintenance. His experience in the industry led him to found Mente Group, a company that offers complete advisory and management services for aircraft.