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02/17/2009

Bartercard Seeing Many More Big Ticket Items

 

Planes, castles, boats and Rolls-Royces � are starting to turn up for sale in trade exchanges such as Bartercard. It is a sign of the times.

 

�When we started in 1991, we described barter as a recession buster,� recalled Wayne Sharpe, founder of Bartercard, the largest barter exchange in the world. In this 21st century recession, barter has come into its own. Sharpe, chairman and chief executive of Bartercard International, jokes that he now has enough aircraft to start an airline on barter.

 

More seriously, he says it is time to set up a specialist division to deal with aircraft sales and leasing. The man behind the implementation of these aircraft deals is none other than Laurie Muir who heads up the Bartercard Pattaya office, but whose experience with Bartercard started some 12 years ago as their Global Marketing Manager.

 

�We are acting as broker for 15 aircraft on our books on behalf of an international aircraft leasing company, financiers and airlines,� Muir noted. Among the planes is a fleet of five Boeing 737-800s, until recently leased to an Asian regional airline. The airline returned the fleet to the leasing company as financial problems started to bite.

 

�These planes are available on seven-year leases,� Muir affirmed.

The upper asking price is $520,000 in cash and $82,000 a month in trade dollars. (Large airlines will be able to negotiate the price down.)

 

Sharpe and his team are talking to three British airlines that have shown interest in taking over the leases for these planes. �This is work in progress. But I hope that we could close the deal by the end of February. It will require a lot of innovative thinking at board level to close the transaction.

 

�Some well-capitalized airlines are still expanding. They are taking the opportunity in the downturn to take over routes abandoned by their competitors. And in Europe, irrespective of the economic climate, there are still a lot of people who travel for business or leisure.�

 

Muir revealed that they also have two brand-new Airbus A320 planes, right from the factory. These are soon to be mortgage-in-possession sales as the airlines canceled the orders. The asking price for the A320-232 is US$55-$60 million depending on cabin configuration and engine type.

 

Normally, it takes two years to take delivery of a new Airbus plane, but these planes are ready now, so this also makes it very attractive to airlines. The price for these aircraft is negotiable, according to Muir, and most of the planes listed with Bartercard will be sold or leased with a 20% barter component.

 

Wayne Sharpe explained that companies, including airlines, use their trade dollars as credit to offset operating expenses. For instance, airlines use barter and cash to provide uniforms or accommodation for crew or obtain wines for in-flight catering and so on. Airline tickets are a keenly sought-after commodity among barter traders. �I can say that the biggest demand is for travel, because a lot of businesses are not prepared to pay cash for travel,� he declared. Packaged holidays are also popular.

 

�We are being offered a lot of opportunities as more companies start to look at barter as an alternative way of doing business. We are seeing varied and unique transactions.�



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