Reference no: EM131459940

Question: Welcome to the world of the rich and famous-where people relax in luxury on their own small jet planes rather than climb aboard a commercial airliner and fold themselves into a cramped cabin along with 100 or more fellow passengers. Billionaires, CEOs, and companies-
particularly those overseas-constitute a lively, growing marketplace for small jets. One of the leading manufacturers of business aircraft, Brazil-based Embraer, markets its Phenom line that includes the entry-level 100 (valued at $3.6 million) and the 300 (an upgraded model particularly appealing to jet owners who want to trade up). Phenoms can accommodate four passengers and can fly at 41,000 feet fully loaded. Embraer is seeing its product line beginning to take off- pardon the pun-in Asia, a region that already accounts for 12 percent of the world's business jets. Embraer recently opened a plant in Harbin, China, to help meet market need. In a recent year, Embraer took orders for more than 800 of its Phenom 100s and 300s.

Embraer has recently penetrated the India market, where its prospects include training schools, charter companies, businesses, and individuals interested in fractional ownership. In prospecting, the company considers such factors as a company's economic growth, corporate profits, and stock performance. After just a few months in India, Embraer's orders have topped 30. Planning for the future, Embraer has partnered with Mumbai-based Indamer as its authorized service center and has begun training mechanics and engineers to work on its planes. Embraer isn't the only player in this niche market. Italian aircraft manufacturer Piaggio Aero Industrie is building business jets for customers in India and the Middle East. According to some industry analysts, the market for private jets enjoyed a brief boom period before declining in the wake of widespread global criticism over companies' extravagant spending and corporate waste. Today, however, analysts see an uptick in the sale of used jets-a harbinger of better days ahead for new aircraft- with prospective markets for private jets including Russia, Mexico, and China.

Suppose you had the financial means and the desire to buy a private jet. How would you locate a dealer? Some turn to salespeople like George Rependa, a Canadian, whose company-Executive Aircraft Services-brokers the sale of private airplanes. Rependa, a professional pilot, says there are only a few people in his business. They travel the globe inspecting and evaluating planes, setting up deals, arranging financing, and doing due diligence on buyers and sellers (as well as the planes). Their expenses, he says, are "huge"- but commissions from such technical, specialized sales are even higher. And, as Rependa points out, he's selling a complicated product: "Selling an airplane is not like selling a washing machine." But if you lack the cash to buy a jet of your own, take heart. You can still enjoy a luxury ride by booking a flight with Los Angeles- based Spectrum Air, a player in the luxury private jet industry. Passengers fly on one of the Gulfstream IVs or Falcon 2000 jets in Spectrum's fleet and enjoy the same amenities as, say, a Hollywood producer or Oscar-winning actor on the way to the Sundance film festival.

1. Who might be a good prospect for a private jet? If you were a salesperson for such aircraft, how would you go about qualifying a prospect?

2. In your opinion, what would be the advantages and disadvantages of working as a salesperson in a niche industry like private or business jets? For someone interested in that kind of job, what would be the barriers to entry?