President and CEO - MENTE GROUP

Mente Group, LLC headquartered in Dallas, Texas, USA provides a unique, customer focused consultancy and brokerage in the fastmoving, global business jet market. The firm has grown 350% in the past 24 months. Recently, Anthony Harrington caught up with Brian Proctor, the firm’s President and CEO, in preparation for this year’s European Business Aviation Convention and Expo (EBACE) in Geneva.

Q: How did you come to start the firm?
A: We started the business in July 2009 with literally $100 in cash. You know, July of 2009 was a great time to start an aviation company {Laughing}. We put various data subscriptions to services like JetNet on our credit cards. What helped us enormously though, was that we were able to close our first transaction in the first 30 days. We acquired a Citation Excel for one of our clients. That really helped us get going.

Q: What were you doing prior to founding Mente Group?
A: I was one of the founders and chief operating officer of Leading Edge, an aircraft brokerage firm. We launched the company in 2004 and built it into the second largest aircraft broker in the world. My former partners are still running the company but after the downturn that followed the 2008 crash I thought it was time to move more into consultancy. My
partners at Leading Edge bought me out and we remain good friends. Once we got Mente Group up and running, we were able to attract some of the folks who worked for Leading Edge and they, too, brought a great deal of experience with them. So it was more like giving birth to a teenager, than a new baby!

We now have 15 employees. In 2016, we added sales staff in Portland, Scottsdale, Denver and New Jersey, giving us a very significant presence in the US. All in all, we are very pleased with the growth that we have seen so far.

Q: What does the consultancy business consist of? Where are you looking to add value for clients?
A: We started off with three legs to the stool, as it were, and we have just recently added a fourth leg. The first three practice areas that we brought to market were: first, our aviation consulting and strategic planning. Here we provide general consulting, fleet planning services and the like.

The second arm of the business is transaction advisory and execution. This involves helping our clients to acquire assets across a whole range of categories, from jet cards and fractional membership to large cabin aircraft and fleet acquisitions. We recently assisted a client in the purchase of six business jets for their fleet, in a transaction that was close to $160 million.

The third leg to the stool is what we call operational consultancy. This consists of helping, for example, corporate clients who want to build their own in-house flight department. Here we would hire the pilots for them, help them figure out the right equipment that they will need, write and set up the flight operations procedures and practices. This division also does best practice audits and ISBAO certification work to help them demonstrate to their clients and the world that they have achieved best practice standards.

We have recently rolled out a new service offering for aircraft owners, specifically lenders and operators with large fleets. Our new Asset Valuation tool allows aircraft owners to constantly know the value of their investments. We spend a lot of energy and resources studying asset values, specifically future residual values. In the years before the 2008 global financial melt-down, there were times when you could have bought an aircraft, operated it for five years, then sell it for more than you paid for it. Those days are over. The manufacturers had such a long lead time on new aircraft that people were prepared to pay a premium just to get their hands on an aircraft. Again, those days are gone. The market today is still seeing residual values falling at a much faster rate than ever before, so the decision about whether to buy pre-owned or new now has to take full account of the kind of depreciation the buyer is going to have to deal with. Residual values do matter today and we can add real value here for our clients.

All our employees have a long history with the aviation sector. They understand the lifecycle of aircraft ownership, from pre-purchase right through to the eventual sale and disposal of the aircraft. Our team includes pilots, former mechanics who have maintained a range of different aircraft types, safety auditors and top industry sales people. Richard Emery, for example, was head of sales for Gulfstream, before joining us. He brought a wealth of knowledge of the aviation sales process and is very well connected with aircraft sales operations around the world.

Q: How is business right now?
A: Things are looking very good. We have ongoing transactions in both the new and the pre-owned jet markets. We are acting for several fleet operators right now who are replacing and upgrading aging fleets of aircraft, and that is very exciting. Plus, every corporate department that buys a new jet always needs to have some kind of supplemental lift
arrangements in place, so we are busy helping them sort that side of things, as well.

What makes us so different from other consultancy organizations is that we are very much a client-centric company. We focus first on trying to understand our client and their needs, then we work back from there to determine the type of aircraft that will best suit their requirements. One of the clients we worked with recently, for example, needed two aircraft to replace the two aging aircraft they currently owned. They had two different aircraft types and were thinking of consolidating by buying two identical aircraft. However, when we spoke to them it was clear that they had two very different mission profiles. They needed a light jet for regional and local trips and a long range jet for coast to coast flying across the United States. That mandated two different aircraft types and we were able to show them why standardizing just on the long range model would not have been cost effective for them. After working with us, our clients begin to understand how different our firm is from the competition. Almost everyone our clients talk to, as far as suppliers are concerned, are trying to sell them something, whether it be an aircraft or a service. We take a different approach. We first seek to understand their needs and their current situation, so that we can direct them to the best solution and outcome for them. What gives the client confidence is that he or she can see that we have nothing which would create a bias in our advice. We are independent and neutral and are simply looking for the best possible solution for them.

Q: How does your actual revenue stream break down between transactional work and consulting?
A: The two are very closely linked. What I mean by that is that the revenue split is probably of the order of 70/30 in favor of transaction-based revenues. But what drives those transaction deal flows is the consultancy, so it doesn’t make sense to split them out and to think of them as two separate lines of activity. The one drives the other and vice-versa. By constantly doing deals we are able to bring invaluable expertise to the table when our clients are thinking of buying, selling or upgrading their aircraft.

Q: When you add on additional staff, what kinds of people are you looking for?
A: We always look for deep experience. The sales team we’ve hired in the western part of the US, for example, are guys who have worked for years at the OEMs. Vince Restivo, for example, used to be head of completions for Gulfstream. His arrival has added a whole new dimension to our business and he puts us in a great position to be able to monitor refits and major upgrades for our clients, helping them through any build process. We hired Jeff Dorrough from Bombardier, where he had a major role in asset advisory services, and that again, adds a dimension to our game. He is a certified ASA appraiser, so we can provide valuations to the industry as a consultant. We also work very closely with lenders now for appraisals, and we see this as a primary growth area for the business. We are well placed to help lenders be more efficient in the way they manage their books and portfolios.

All of our new team members have vast connectivity experience and expertise. Working with their former partners will help us to extend our footprint internationally. We expect to have our operations in the US fully built out by the end of 2017 and we are already looking to work with our international partners to gain a larger international presence.