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Leading independent aviation consultancy, IBA,
has responded to Avolon’s Head of Strategy Dick Forsberg’s report assessing
aircraft appraisers.
In his response paper,
Phil Seymour,
IBA’s CEO and the current chairman of the ISTAT International Appraisers’
Program, agrees that the appraisal community needs to better highlight the
complexities between types of appraisal so that purchasers have the appropriate
depth of research for the specific project.
Seymour also highlights that a broad range of
values against complex assets such as aircraft is only to be expected given the
variables in play.
| The appraisal community, says Seymour, must
endeavour to conduct full, thorough appraisals even when experiencing
“resistance to conducting the appropriate level of appraisal for strategic
deals.” There is, he explains, a “perception that desktop research will suffice
when, in our view, more effort should be made to match appraisal type to
tactical or strategic need.” Whilst desktop and online valuations are an
essential component of the aviation industry, they are “rarely adequate for
lease-adjusted appraisals, portfolio acquisitions or capital market activity.”
Seymour also calls for appraisers to consider
the full range of opinions which may come into play during an appraisal,
concurring with Forsberg that more transparency would be helpful for all parties
involved: “All large privately owned assets, from a car to a house to an oil
tanker or aircraft, experience a range in values driven by a myriad of internal
and external market forces. Aircraft are expensive, so a 1-2% fluctuation in
values often equals millions across a
portfolio. I firmly believe |
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Click here to read Phil Seymour's full paper |
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that it
is healthy therefore to have a range of
opinions to consider, agreeing with Dick
that more transparency around the
methodology would be helpful.” |
Whilst agreeing with the need for more
transparency and welcoming “clients requests to lift the lid on how we develop
our values,” Seymour perceives double standards in the way that “the very same
community that will not share essential aircraft information protests about the
lack of accuracy, yet is often unwilling to invest in a deeper dive that far
better reflects an asset’s current and future value,” describing this as a
“vicious circle we all need to break.”
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