Janine Iannarelli founded Houston-based Par Avion, a business aircraft brokerage firm, in 1997. An international aircraft broker and consultant, Iannarelli specializes in the sale of business jets such as Bombardier, Citation, Embraer, Falcon, Gulfstream, Hawker and Learjet aircraft.  

Given the pandemic and travel restrictions, how did your business fare in 2020?

I’d say it was much better than expected. The fourth quarter was off the charts in terms of demands on my time, potential opportunities and then [the] realization of some sales that were a direct result of new business development. Had everything I was working on came to fruition, I think I’d have to take the first quarter off just to recover. But we didn’t close all those deals. I think, and you’ll likely hear this from everyone else actively engaged in the aircraft sales business, that 2020 was an abbreviated year that can be summed up in fourth-quarter activity. It was an unbelievable fourth quarter in terms of demand, expression of interest, particularly from first-time buyers, and the ability to get deals closed. We actually had a Dec. 31st closing, that was an absolute must event driven by taxes. That was nerve wracking coming down to the wire like it did, but it was a must close by the 31st, otherwise, it was going to change the optics of the transaction completely.

 What was the rush?

Concern over the potential loss of bonus depreciation for sure and changes to personal and corporate tax structure. There was as well a great deal of pent-up desire for personal/business aircraft carried forward and so buyers opted to jump on opportunities because they knew what they had to work with in 2020, and 2021 is still a mystery.

How do you predict 2021 will be for your business?  

Some of the business (in 2020) carried over. So, we have some early first-quarter activity as a result. Inquiries are steady, but not as accelerated or as earnest as they were in the fourth quarter. I think (the first quarter) typically serves as kind of [a] breather, certainly this year a recovery from the hangover of 2020 because everyone was so under pressure to get things done, and that pressure was relieved come Jan. 1. I find the first quarter is always the quietest time of the year for me, at least personally. In the second quarter, things start to pick up. If we get COVID-19 under control, I think you could see a happy second quarter once again.

How have prices held up during the pandemic?

It’s too early, I think, to comment on that. Every airplane had a birthday on January 1, so they’re all a year older and values have yet to reset. In some markets, there probably won’t be much fluctuation, because there was such demand for the particular make/model of aircraft. With the onset of the pandemic in March, April, there was some evidence of fire sales of some aircraft, and then, I think there was a quick recovery from that. If one was looking to find a fire sale opportunity or take advantage of someone in the fourth quarter, you were dreaming.

What is the biggest challenge now?

The biggest challenge is travel itself. I have some travel on my agenda going forward, and I won’t say that it’s done without some trepidation, because I’m going to fly the commercial airlines to get to where my business needs to be done and in some cases have extended stays. Staying well, staying safe and also protecting my clients are my chief concerns, because if I’m going to meet with them, it’s incumbent upon me to make sure that I create a safety corridor to the best of my ability to do so.  I’m Zoom-ed out. I’m also planning on spending more time on the road in my car than I did this past year. It’s time to get back out and see clients and place myself in those areas where opportunities for business development exist. And the vast majority of my clients want to see me. We’re just waiting for that opportunity to get together.

How have travel restrictions and the lack of industry events impacted your business?

What’s missing is the opportunity to meet someone by chance when you can’t go to a service center, when you can’t go to a convention, when you’re not out there in a business environment meeting like-minded people or having the casual introduction. That takes a toll on business. We have to get back out there. Go to a cocktail hour, go to an air show or regional event, and there’s none of those for the foreseeable future. While I believe it impacts new business development more than anything, it hurts in the maintenance of the human connection that we all need.

You’ve been able to do some demo flights during the pandemic. How have those gone?

I have participated on a demo flight for a prospective buyer and adhering to COVID-19 protocols the entire time was a must. No one was allowed in the cockpit so as to minimize exposure for the crew. Everybody wore a mask at all times. You just try to minimize touch points.  If conducting a demo flight, you just have to be more cautious about it. If possible to show the aircraft outside, we show it outside. Of course someone’s going to want to go onboard, but I would minimize the amount of people that are in the cabin at any one time. I’m personally not an advocate of demo flights where you stick a bunch of people on board nor do I think it necessary for anyone, but essential personnel to be on board for a maintenance/test/evaluation flight associated with a sale. That type of flight is more about a technical review of the airplane, so as the salesperson I take myself off the passenger list. Thus far things have gone quite well and all who participate are very understanding. I believe everyone has the same vested interest: stay well and do what you can to ensure that.

How have your international sales been during this time?

I was lucky this past year in that the aircraft that were based overseas that I represented I had already been to see and review the related records.  While it is SOP for me to preview an asset I have for sale, it certainly put me in a lucky position to promote the aircraft in 2020. I still think that for the vast majority of foreign-based aircraft outside the United States offered for sale, that anyone expecting to sell to a U.S.-based buyer is going to have to send the airplane here. Even though you can hire a third party to look at the airplane for you, there’s still that level of need where you want to have your own hands, your own eyes, your own people looking the aircraft over. Sending someone from here to wherever, while not impossible, remains difficult.

You mentioned another challenge is with aircraft transactions and the level of transparency. Can you explain?

I’d say that for me, there’s a heightened sense of awareness of who we’re doing business with. We do our best to analyze that, particularly when we’re looking at cross-border transactions. The tricky part with a lot of international aircraft is that the aircraft are generally held in a special purpose entity, and most of the information on the civil aviation registry has to do with the operator as opposed to the actual owner. So, it’s difficult at times to really dig down into who is the beneficial owner, and we’re relying on third party resources, like the databases that we subscribe to, for information. For me, personally, transparency starts with who are the parties to the transaction? Who’s going to be the buyer? Who’s going to be the seller? Also involved with transparency and transactions is who is getting paid in the course of this deal? If either party is represented by someone, I want that on the table up front. I want to make that known to my client.

Is transparency getting more difficult?

I don’t think it’s gotten more difficult. I think there’s more awareness of the need for it. And with the awareness comes the realization that it’s not so easy. I think there’s still an education process that still needs to go on and other resources made available to the trade to aid in this process. That’s my 50,000-foot view of the global resale marketplace.