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Selling Aircraft: Negotiation

David Settergen
Former VP, Marketing and Sales at GECAS

Learning outcomes

  • Negotiating with airlines when leasing or selling aircraft

Executive Bio

David Settergen

Former VP, Marketing and Sales at GECAS

From 2001-14, David was the VP of Marketing and Sales in APAC for GECAS, one of the largest aircraft leasing companies globally. He executed over 50 transactions per year at GECAS and has relationships with all the major airlines in Asia and the Middle East. He then spent 2 years at AerSale in Singapore where he sold and executed purchase and leasebacks. David started his career at GE where he spent 14 years working across engine services and support and GECAS. Read more

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Interview Transcript

What have you learned about negotiation, in working with airlines, to sell and lease planes?

I’ve always found that it’s best to be open and honest. I’ve seen people get caught in lies, in trying to pull a fast one on people. That makes for a very short lifespan, in this business. I stand by my name and I’m glad that people know me to be honest and truthful and I get a lot of referrals because of that. It is a word-of-mouth industry and if somebody is fair and honest and you trust them, then that goes a long way in this business.

But what do you say if an airline has really got zero cash and they want the lowest rate possible, the best deal possible? Do you have to be very transparent on the fact that the lessor has investors, this is your economics?

Yes; it’s very much that. As I said, it’s good to understand the airline’s side of things. Sometimes you have to share your side of things, as well. If I’m competing against one of my colleagues, trying to place a plane in Europe, and he’s willing to pay X, you may or may not get the deal, if they think you should go lower. Sometimes, you’ve just got to walk away and say, I’m sorry, but this is the best I can do. I’m not trying to pull a fast one on you, but these are the restraints that I’m under, just as they will, with competitors, to me.

Hopefully, they’re telling me that so and so is a little bit cheaper; can you do that? That’s where the whole consultative negotiation comes in. The better relationship you have, the more you can have those conversations.

Do you have an example or an instance where you’ve had a very tough negotiation with an airline?

Yes. It’s not so much because of aspects of the deal, but just in negotiating styles. You go to any of the airlines in India and it’s negotiation by panel. They’ll have 10 or 12 people, sitting at the table, and all of them have their little bit of the contract they want to go through. I’ve had it take one day to go through the first page of an LOI. That’s the way things work there and you learn to accept it. It can be frustrating, having to spend a week, rather than a day, to get things done, but that’s part of doing business. Different cultures have different ways and if you can’t accept that, then you shouldn’t be doing it.

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