United States Presidential election cycles have a tendency to put a damper on aircraft purchasing. Having been in the business for 30+ years I have seen this happen every four years.
Some years, when the re-election of the President will not appear to be highly contested, the impact is minor. In years where the election is highly contested and with a wide range of outcomes that are highly dispersed, it can put the brakes on major purchases. It doesn’t take a political analyst to figure out this one is going to be highly contested and the range of political outcomes is perhaps wider than in the past election cycles.
We will leave it up to the experts to determine how radically different the apparent two contenders agendas will be when they reach office. Often the rhetoric is far more extreme than the actual policies once in office.
So what does that mean for you the aircraft operator or buyer?
When the market corrects for high oil prices, or a market decline like in 2008, there are buying opportunities for those in a position to take advantage of the situation. As we learned in Economics 101, not everyone suffers from the conditions in the market place. Those whose business isn’t affected can reap the benefits of those whose business is affected.
However, that is when there is a real disruption in the market. Markets react to real and perceived influences, however the two are not the same in terms of recovery. A real market disruption similar to the ones mentioned above may take months or years for the economy to get back on track. Perceived market disruptions can take days or weeks to recover. Presidential elections are a perceived disruption.
Typically the new President comes in with an aggressive agenda and often in the end, Congress mitigates it. The result is an outcome that is more moderate from left to right, or right to left and in the middle of the road.
Once the election is over and the agenda is more to the middle, the aircraft market will return to pre-election activity. Bottom line–there are great aircraft purchasing opportunities for those who want to take advantage of the election slow down and lower prices this summer.
