Assent Aeronautics was founded in 2004. Along with the company’s aircraft management, operations, and maintenance services, Assent provides aircraft acquisition and sales capabilities. President and Founder W. Hulsey Smith discusses the company’s private aircraft auctions platform, and topics covered include:
W. Hulsey Smith is President and Founder of Assent Aeronautics, and pursues “The Art of the Possible” with an uncanny vigor with the cornerstone ideology that value is created from bridging the gap between the conceptual and the tangible. Mr. Smith has fourteen years of experience serving as an executive, leader, technologist, senior advisor, and board member in the aerospace and defense industry, and has led organizations to successfully fly over 50,000 flight hours during his career. Under Hulsey’s leadership, his teams have developed best-in-class aviation engineering, certification, maintenance, and consulting business practices, and have flown over 15,000 hours of special mission flight operations.
In 2003, Hulsey founded Aero Kinetics to provide executive and non-emergent aeromedical helicopter transportation and aviation consulting services to clients in the Dallas – Fort Worth Metroplex. Over the years, Aero Kinetics and its subsidiaries served various Fortune 100 and ultra-high net worth clients in support of their unique aerospace initiatives and grew as a front-runner in an emerging UAS industry centered on innovation and customer service.
In December of 2015, Hulsey spoke at The Unmanned Systems Institute (USI) Conference on the future of the industry and the safety of system operations inside the U.S. National Airspace System. Hulsey received worldwide media attention for his study, “The Real Consequences of Flying Toy Drones in the National Airspace System,” which explores how dangerous unregulated toy drones can be to both consumers and the aerospace industry. The study was subsequently verified by the FAA’s own research as released in 2017 over two years after its initial release.
In 2017, Hulsey joined Tracker Capital Management as a senior advisor to the firm’s founder and senior leadership team in the aerospace and defense industry, specifically in unmanned and autonomous technologies. Hulsey has been a contributor to Bloomberg News, and has been asked to guest contribute to numerous news media outlets including Aerospace Manufacturing and Design, The New York Times, CBS News, WGN, Voice of America, Yahoo News, Huffington Post, Wired, and others.
Hulsey and his wife and daughter currently reside in Fort Worth, Texas, and enjoy spending time with family and friends. He is an avid outdoorsman enjoying snow skiing, bird hunting, fly fishing, water sports, and various other outdoor activities as often as his schedule allows.
Assent Aeronautics is a family owned company, founded in 2004 and headquartered in Fort Worth, Texas. We are a collective of Aviators simply dedicated to the pursuit of perfection in the Art of Flying, Maintaining, and Operating Aircraft.
Assent Aeronautics’ vision is to eliminate the mystery, hassle and superfluous cost of aircraft ownership by innovating the way the aviation industry does business through transparency, precision and efficiency, and by supporting every aircraft as we do our own.
Assent Aeronautics delivers certainty in the aircraft acquisition and aircraft disposition process through technical expertise, transparency, knowledge and data driven strategy, offering the top private aircraft consignment auctions in the world. Assent is dedicated to eliminating the mystery, hassle and unnecessary expense of aircraft ownership. We do this with unmatched transparency, precision and experience, supporting your aircraft as we do our own.
Assent’s roots date back to managing our family flight department in the 1940s. After 70 years of family aircraft ownership and numerous requests from companies and individuals to manage their aircraft, Assent was founded in 2004. Since then, we’ve helped hundreds of owners and operators maximize dispatch reliability and safety while saving money through more efficient expense forecasting and expert technical supervision. Simply put, people who count on their aircraft, count on Assent.
Tony Kioussis (00:33):
Welcome to another Asset Inside podcast covering the aircraft ownership life cycle. I am Tony Kioussis, president of Asset Insight and your host. According to its website, Ascent Aeronautics is a family-owned company founded in 2004, dedicated to the pursuit of perfection in the art of flying, maintaining, and operating aircraft. Along with aircraft management and maintenance, the company provides aircraft acquisition and sales services. It was Ascent’s sales services through an auction process that intrigued us, and joining me today is company president Hulsey Smith to discuss Ascent’s capabilities. Let’s start off by learning a bit about a Ascent Aeronautics. What should the business aviation community know about your company in general and your aircraft auction services in particular?
W. Hulsey Smith (01:19):
We were founded back in 2004, but our heritage really goes back almost 70 years now. So we know what it takes to own and operate aircraft. And we also know what a pain it is to buy and sell aircraft through the traditional brokerage process. So we’re really here to bring clarity, transparency, and a platform to today’s business aviation operators to ease the burden of aircraft ownership. That’s really our key to what we do as a business is to deliver seamless and simple solutions to complex problems and aircraft ownership.
Tony Kioussis (01:51):
Based on this new normal we’re all experiencing, what’s been the market’s level of interest in completing an aircraft transaction via an auction?
W. Hulsey Smith (01:59):
So that’s a great question. And when you say new normal, there are two different aspects of new normal. The first part of new normal is how these aircraft are now commoditized across the spectrum between Cessna 152s and G650ERs. Each aircraft, as a result of the fervent brokerage market, has now become truly commoditized. That creates an opportunity for Ascent Aeronautics as we have a transparent and open platform to allow buyers and sellers to meet and make fair transactions to move metal and sell aircraft.
W. Hulsey Smith (02:32):
The second part of new normal is COVID. COVID has really changed the way that our business has been accepted by the marketplace. Before, people wanted to touch and feel aircraft. And I think now that they’re commoditized, people are more interested in buying aircraft using virtual and online tools to conduct their due diligence process. Considering we offer three aspects to sell aircraft, having an as-is, where-is transaction, a pre-purchase inspection previously completed prior to an aircraft coming to auction, and a pre-purchase inspection pending. So after closing where there’s a whole holdback or a seller basket to be able to complete squawks, individuals now in post-COVID environments are more comfortable acquiring aircraft through these manners. One of the ways that we provide that comfort is by our partnership with Jackson Walker, a world-class law firm, who does all of our diligence and our contracts. So they understand that when they sign on the dotted line, these contracts are properly drafted and provide ease and transparency of closing. Typically, our closing processes happen within seven days from the time the auction is completed and that aircraft can take change in possession simultaneously. So we take the months and months of legal work that can typically follow a larger, heavy jet transaction and can reduce that down to a simple process for sale. So the new normal has really created an environment for buyers and sellers to meet in a more transparent manner than ever before.
Tony Kioussis (03:55):
What does Ascent Aeronautics provide to entities within the business aviation community willing to trade assets through auctions? Specifically, what are the advantages of using an auction to sell your aircraft?
W. Hulsey Smith (04:06):
Our auctions have three different methodologies of consignment. You can consign your aircraft on an as-is, where-is basis, with a pre-purchase inspection completed, and with a PPI pending.
Tony Kioussis (04:18):
The PPI being the pre-purchase inspection.
W. Hulsey Smith (04:22):
So from a sell side, we give the sellers optionality to choose how exactly they want to sell their aircraft and at what price point they choose to sell. From a buy side, we give transparency into the aircraft with an inspection period for 14 days prior to each auction. In addition to that, we provide transparent digitalization of log books and other information that you can access through our web portal system. So one of the keys is that we’re a platform. Think of us as the New York Stock Exchange of aircraft sales. We want to bring buyers and sellers together in a transparent and cohesive platform to be able to facilitate quick and simple closings without the headaches that typically follow a brokerage transaction.
W. Hulsey Smith (05:04):
There’s a fundamental difference in the auction process from a buy side and from a sell side that people need to understand that makes our business so successful. On the sell side, we allow sellers for the first time ever to have the ability to have pricing power. What does that mean? So when we offer an aircraft for sale, such as the G4SP we have coming to our September 24th auction, everyone in the world knows that G4 is going to sell on that day or thereafter if they go through our vectors to final process. So every G4 buyer in the world is going to contact us to understand what exactly the value of that aircraft is. And that allows our seller to sell prior to the auction, to sell at the auction, or after the auction for them to receive the best price for their aircraft. That’s a fundamental difference. Because there may be 30 or 40 G4SPs on the market, but this is the only one that’s truly signaled to buyers that it’s for sale, and this [inaudible 00:06:01] and it’s going to go on the block or before if the reserve price is met. So that allows us or the seller to extract the consumer surplus from the buy side.
W. Hulsey Smith (06:10):
On the buy side, we provide an interesting service that really gets our buyers motivated. They understand that when we bring an aircraft for sale on the auction block that they’re not overpaying for that asset, because it’s the most widely marketed G4SP in the world. For example, some of our marketing numbers are absolutely outstanding. For the July 30 auction, we generated over 2 billion impressions of marketing. In addition to that, we had five figures in viewership for the live online stream. So if you think about the amount of visitors that we have and the attraction you have, you can be assured that we’re delivering the most eyeballs on an aircraft that are for sale through the auction process.
Tony Kioussis (06:50):
How do people tune into the auction?
W. Hulsey Smith (06:52):
There’s three ways to view currently. So you can register to bid using a Ascentaeronautics.com or Ascentauctions.com, and that will allow you a direct bidder portal through our partner High Bid. You can also watch via YouTube on live stream or through Facebook Live. So we have three different methodologies for people to view. So on the go, at home through YouTube, and also through the bidding portal at High Bids. All three have the same live auction feed. Specifically, we’d love for everyone listening out there to join us on September 24th at 1:00 PM as we launch the third live virtual auction for Ascent Aeronautics. We currently have roughly $32 million in aircraft consigned.
Tony Kioussis (07:33):
Are your auction services something an aircraft broker or acquisition consultant would use? Or are you the only one acting as the aircraft broker through your auctions?
W. Hulsey Smith (07:42):
No, we work with aircraft brokers and acquisition consultants regularly. One of the things that we find is that aircraft brokers choose to use us to sell certain listings because they may want to test the market on certain aircraft types or certain makes and models. So on the sell side, we see some brokerage firms wanting to bring their aircraft to the auction, and we work with specific ones to effect those sales. It’s also a great outlet for certain aircraft brokers who may have a difficult client who don’t understand what the market value of their current asset is. And they’ll want to use Ascent Aeronautics auction platform as a means of testing the market for a current asset. We’ve done that twice, and it’s been very successful for those owners to really check the market and see where they are. One time the owner sold and the other time the owner declined to sell. Also on the buy side, it’s very interesting because we allow an acquisition consultant to have full access to the books and records. Typically, we recommend that individual buyers and sellers who use our platform actually contract with a broker on the sell side or on the buy side to ensure that they have someone who fundamentally understands the airframes prior to making the acquisition.
Tony Kioussis (08:50):
How does your platform identify financially qualified bidders?
W. Hulsey Smith (08:54):
We have a partnership with Amstat, and we work with them closely to identify individuals who own or operate current aircraft to help demonstrate financial worthiness. So we work with Amstat specifically as a verification source for individuals who own aircraft. Further than that, we have our law firm, a longtime partner, Jackson Walker, who conducts a deep dive on each individual registered bidder to ensure that they’re qualified or verified. And further than that, a qualified bidder can always present us with a bank letter of credit or bank letter of guarantee to assure that the buyers are money good. We’ve not run into the issue yet where a buyer is not money good. We have had some nefarious characters try to register for the auction, but they were quickly swept away.
Tony Kioussis (09:38):
I can understand the value of that alone. Does someone have to physically attend the actual auction or can they bid via the internet? I think you said that internet bidding was available.
W. Hulsey Smith (09:49):
Internet bidding is available. When we started, we wanted to have an all live, in-person auction process. And that was the auction we first launched in 2019. Very successful. But with the onslaught of COVID, we had to turn toward more of a virtual auction. So we’ve invested heavily in the digital space to be able to deliver virtual online bidding, as well as phone bidding and proxy bidding to allow a buyer to acquire an aircraft through our process. Certainly we’ve seen a lot of people take advantage of that. At the last July 30 auction, two of the aircraft that sold directly on the block were from internet bidders. One was from a phone bidder, and then we have several that have closed subsequently who watched the auction and then chose to have a PPI post the auction to acquire those aircraft.
W. Hulsey Smith (10:33):
One thing people don’t talk about very often with the auction process is we provide a platform. So if someone chooses to conduct a pre-purchase inspection, we welcome that before, during, or after the auction. It just depends on if they’re competing with other buyers who may choose to forgo a PPI or pre-purchase inspection. So we’re not hamstringing the information that a buyer can receive. We’re simply just facilitating how and when they may choose to actually gain that information through an inspection process. Further, we welcome most of the heavy MROs to provide technical consulting to any of our aircraft that are listed so that they can review those aircraft for their clients and maybe provide bids and scope of work for future work.
Tony Kioussis (11:15):
If bins are accepted over the internet, how do you handle time zone issues?
W. Hulsey Smith (11:20):
We handle timezone issues and direct bidding in real time. So if someone from China, for example, wants to bid on one of our aircraft, we offer proxy bidding as well as phone bidding that allows them to be able to bid. Unfortunately, they have to bid and live in real time overnight if they choose not to take advantage of our proxy bidding or sealed bid opportunities.
Tony Kioussis (11:40):
How long is an auction for a single asset open for bids?
W. Hulsey Smith (11:44):
When an aircraft consigns with us, we place it on the market. And that aircraft can sell before the auction, so we accept off-market offers before the auction occurs. We accept offers on the auction block. And if the aircraft doesn’t meet the reserve pricing, we accept offers after the auction as well. The aircraft are actually for sale from the moment they are consigned until a number of days after the auction. Typically, 90 days after the auction is when they’re released from the sales process.
Tony Kioussis (12:11):
What types of fees are incurred by those utilizing your platform?
W. Hulsey Smith (12:15):
The fees that Ascent charges vary by aircraft to aircraft. Typically, we charge an entry fee, $499, which goes to all the legal work that it requires to verify the sellers and the buyers. We also charge a reserve fee if the client chooses to place a reserve on the aircraft. The reserve fee is varied by asset type and by asset size. And then we charge a seller’s commission of 3.85% for turbine aircraft and 10% for piston aircraft.
Tony Kioussis (12:42):
In thinking about what your platform provides, it really eliminates the possibility of a back-to-back transaction that costs the client a whole bunch of money.
W. Hulsey Smith (12:53):
Our platform does eliminate the ability for a broker or any nefarious actor to receive a kickback through the back-to-back transaction process. And as you think about the auction, that’s one of the reasons why buyers and sellers choose Ascent Aeronautics for their aircraft transaction is that there are no kickbacks, there are no payouts, there are no elicit or nefarious payments made to third parties in these aircraft transactions that are conducted through the auction. They go straight through escrow. Everyone sees a transparent closing statement. And what you see is what you get. And that alone provides a tremendous comfort to most aircraft buyers and sellers who have seen or been taken advantage of in the past.
Tony Kioussis (13:39):
Is there anything we haven’t covered that the business aviation community should know about Ascent Aeronautics?
W. Hulsey Smith (13:46):
Our business is here to support and facilitate the transparent closings of aircraft. So people who are frustrated with the traditional process of engaging brokers and marketing an aircraft, and going through the six to 12-month process to sell your airplane or your helicopter, Ascent offers a solution that takes the brain damage and pain out of that process. Ascent’s focus is transparency, the ability to deliver pricing power to our sellers and to our buyers, and also the ability to deliver marketing prowess to sell these aircraft across the entire world, without having to worry about an individual broker marketing your airplane or your helicopter. We believe that our clients understand and really appreciate the value that we deliver, trying to take the headache out of buying and selling aircraft.
Tony Kioussis (14:36):
This has been another Asset Insight podcast covering the aircraft ownership life cycle. Please visit our ever-growing podcast library at Assetinsightpodcas.com and select from any number of topics discussed with business aviation industry experts. This is Tony Kioussis, and as always, thank you for listening.
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