Ethics&Trust_Gil WolinNov06 19/06/2012 12:14 Page 1
ETHICS & AIRCRAFT SALES
Aircraft Sales: The Importance of Ethics. by Lori Johnson
usiness ethics has been a topic of discussion - and controversy - for decades. Companies find themselves in the worldwide spotlight when something goes wrong because someone acted on their behalf in an unethical manner. Whether it is harassment charges, creative book and ledger entries, or secret telephone audiotaping, unethical behavior is more common than we like to admit. Unfortunately, the aircraft sales profession is no different. Following, a selection of industry professionals discuss the importance of ethical behavior, how ethical behavior is defined in aircraft sales, and how to be confident that your representative is on the up and up. In his capacity as Chairman of National Aircraft Resale Association, Paul Kirby, Managing Partner of Cerretani Aviation Group, LLC insists members commit to, and abide by a Code of Ethics that provide standards of business conduct regarding aircraft transactions. Aircraft brokers and dealers buy and sell very expensive business tools that can
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WORLD AIRCRAFT SALES MAGAZINE – July 2012
significantly affect the productivity, bottom line and employee safety of major businesses. Aircraft are highly complex and there are virtually no two in the market that are completely alike. Their values are based on their flight history, maintenance history, ownership history, equipment, their care and their use. Determining the real value of an aircraft can be difficult, especially when certain items are valued more by some than by others. In addition to guiding clients as they sift through information or representing a client’s aircraft when it is up for sale, the typical broker regularly works with millions of dollars. They also handle and direct large sums of money all over the world. “One of the most important roles of a dealer/broker is the management of a client’s expectations in the fulfillment of their objectives,” Kirby says. “Without honesty and complete transparency, this becomes almost impossible.” Rick Smith, Vice President of Business Aircraft Leasing, Inc. (BALI) agrees, adding that an ethical broker will disclose all pertinent facts about an aircraft, including (but not www.AvBuyer.com
limited to) any damage history or questionable incident in the aircraft’s past as well as the broker’s relationship with the buyer or seller”. An unethical broker, he says, may withhold information, leaving it to the buyer to investigate for themselves in hopes that they will not discover something that may reduce the aircraft’s value or the buyer’s decision to purchase the aircraft. Deliberate omissions can be as devastating to a client or transaction as outright misrepresentation of an aircraft. Both need to be avoided at all costs. “On a number of occasions,” Smith continues, “I have had to defend myself and the industry in general due to the actions of a few. If a customer discovers or catches their broker/dealer in a lie, then they automatically begin to question everything that broker/dealer has said. That is really too bad because we believe we have a fiduciary responsibility to our clients. Giving false or misleading information to clients or customers is ultimately contrary to this relationship.” Michael O’Keeffe, Senior Vice President of Banyan Air Service, elaborates that because of Aircraft Index see Page 4