You’d think, during a recession, that aircraft repossessions would increase. Actually Nick Popovich, one of the busiest repo men in the country, is turning down business and that, in turn, kept the number of reposessions in 2009 lower than in 2008.
Although Popovich performed 30 repossessions of turboprop and jet aircraft in the last six months of 2009, he turned down an additional 12 to 15 clients. Popovich warns banks and loan companies that aircraft are below market value at present. A repossession means the bank must hold it until the market improves, and pay to keep the aircraft current and in repair.
Instead of working with the bank, a lot of owners have chosen to walk away from the airplane, letting it fall into disrepair. Logbooks are sometimes lost and maintenance records disappear. A Hawker 800 corporate jet repossessed by Popovich and his company last month may have to be scrapped because of its condition.
Popovich urges owners who find themselves in financial trouble to work with their banks to protect the value of the aircraft. “A lot of people are behind the eight ball and walk away,” Popovich said. Lenders may be willing to invest in insurance and repairs to keep the airplane in top shape until the market recovers. And when will that be?
Popovich believes it may take another 14 months for the airplane market to recover. The economy is not yet at the bottom, he said, and won’t be until about May. There are still factors that could damage the market. In particular, Popovich said, is the problem of credit card debt. People out of work have lived off their credit cards, he said.