Republic of China: Ace Pilot

Chapter 78, Section 77: Persuading Tung Oil Merchants – Wisdom of the Times: Aircraft Leasing
The first batch of flight apprentice training classes at Taishan Aviation Training Center have commenced.

Twenty apprentices are training in a small square next to the airport dormitory building.

The instructor who trained them was the same one who trained the security team.

These flight apprentices had never undergone military training and many were not suited to it.

But they can still manage to hold on.

Fang Wen and Shao Sichen walked over, watching the training and talking at the same time.

"Shao Sishen, don't worry. China Airlines has agreed to let us use this space for training. Our company's security team also completed their training here last time."

Unable to continue flying, Shao Sishen devoted all his energy to aviation teaching and took great care of everything at the training center.

"General Manager, I also need to report to you on other aspects of the aviation training center."

"Well, you said."

"The original manuscript of the accompanying teaching materials was sent to the Life Bookstore for printing. Later, one of our students said that his uncle could print them at a much lower price. Considering the need to save costs, I entrusted the printing of the teaching materials to Huatao Printing House."

"Is Huatao Printing Shop owned by Boss Yang?"

"Yes. He did mention that he and you were old acquaintances."

Fang Wen suddenly felt a headache coming on.

Back when Shanghai Night Flight was distributing flyers, they had them printed by Mr. Yang from Huatao Printing House.

As it turned out, that guy had printed an advertisement for their printing shop on the back, including his own name.

Since it's him, the student must be Pan Jiafeng.

Fang Wen had a very good impression of Pan Jiafeng. Back when he was piloting the Rheinland NYP-2 to drop bombs over the Huangpu River, this kid was a bombardier.

Although he is young, he is not afraid of anything and is not intimidated by dangerous situations.

So he carefully looked at the group of flight apprentices, looking for Pan Jiafeng.

From right to left, from low to high, Pan Jiafeng is on the far right, and is the tallest and strongest among the trainees.

He walked over and said something to the military instructor.

Immediately, the military instructor said, "Pan Jiafeng, step forward. The general manager wants to talk to you."

"Clang." Pan Jiafeng trotted out of line, came to Fang Wen, and immediately smiled. "Master."

"I'm not your master, don't call me that," Fang Wen quickly refused.

Although Pan Jiafeng had said he wanted to become his student to learn to fly when he flew night bombing, he did not agree at the time.

To be honest, it wasn't that Fang Wen didn't want to participate in teaching, but rather that he felt his basic theoretical knowledge was insufficient, and he relied more on mechanical perception.

How can a victory gained through ability be transformed into experience to be taught to others?

His words did not discourage Pan Jiafeng. Instead, he said something full of江湖 (jianghu, a term referring to the world of martial arts and chivalry) spirit: "I know I am not qualified yet, but one day, I will definitely be able to become your disciple."

This is somewhat like a scene from a martial arts novel. Fang Wen couldn't help but think of Fang Shouxin and his eight fellow disciples moving their master's grave and erecting a monument, and paying their respects every year. The master-disciple relationship in the Republic of China seems to be different from that in the future.

For some reason, he had a thought: "Alright, then study and train hard. If you're really qualified, I'll take you as my apprentice."

Pan Jiafeng clenched his fists tightly and shook them. "Thank you for giving me this opportunity. I'm going back to training."

Watching Pan Jiafeng run back to the line, Fang Wen turned around and continued chatting with Shao Sishen.

Are there any problems with the teaching?

"The theoretical teaching mainly covers basic flight principles, aerodynamics, aircraft structure, and flight performance. There are also meteorology courses to ensure safe flight under different weather conditions. With so many courses, I can only complete a third of them at most; the rest is beyond my capabilities."

"Don't worry about that. Actually, hiring foreign flight instructors isn't expensive. As long as the tung oil-for-aircraft project is finalized, I can get Boeing to provide a batch of professional flight instructors on a priority basis."

When it came to exchanging tung oil for airplanes, Shao Sishen couldn't understand Fang Wen's actions at all.

He asked doubtfully, "General Manager, I don't understand. It seems like nothing has been invested in this whole thing. Why are you so sure it will succeed?"

This involves many future business theories, which Fang Wen did not explain.

The tung oil-for-airplanes project has been questioned not only by outsider Shao Sishen, but also by the tung oil merchants themselves.

Fang Wen needs to have a good talk with the tung oil merchants in both the production and sales areas.

Two days later, the Boeing 80, having completed a day's routine round-trip flight, returned to its origin.

After getting off the plane, Fang Wen carried the shrine back to his residence.

Fang Shouxin brought over a suit.

"Young Master, the custom-made suit has been delivered. Try it on and see if it fits. If not, I'll have Cheng Li's tailor come over tomorrow to alter it."

After handing the shrine over to Fang Shouxin for safekeeping, Fang Wen took off his coat and put on a suit.

"It's alright, it fits well, no need to call a tailor to alter it."

After putting on a full suit and changing into leather boots, Fang Wen left his residence and headed to the Taishan Airlines office.

There are some important guests waiting there. If the deal goes well, the project of exchanging tung oil for airplanes can proceed as planned.

A few minutes later, upon arriving at the Taishan Airlines office, a staff member hurriedly reported: "General Manager, Mr. Neil is in your office. We have arranged for the others to wait in the conference room on the first floor."

Noisy sounds came from the conference room on the first floor. Fang Wen did not go in directly, but went upstairs back to his office.

There, Neil Toledo puffed on his cigar, his inner turmoil causing him to loosen his bow tie.

He dressed up specially for today's meeting, wearing a tuxedo vest.

Upon seeing Fang Wen arrive, he quickly stood up: "Fang, are you sure you can manage inviting so many people?"

"Whether it will work or not depends on what happens next." Fang Wen didn't give a direct guarantee. He brought out his future plan, which, although lacking the internet, could still be effective. However, that model wasn't initially well-received. Therefore, the key was whether he could convince the tung oil merchants in the upcoming negotiations.

The two went downstairs and pushed open the conference room door to enter.

In the spacious conference room, tung oil merchants from the southwest region and the Jiangsu, Zhejiang and Shanghai areas gathered together.

As soon as he entered, Fang Wen began to recite the prepared speech.

"Ladies and gentlemen, thank you all for coming to Taishan Airlines for this meeting. This is Neil Toledo from Boeing Trading Company." "Everyone is thinking about how to proceed with the tung oil-for-aircraft exchange, right?"

A tung oil merchant from Jiangsu and Zhejiang was the first to speak up and ask, "Actually, what we care more about is whether we can get paid after selling the tung oil."

Fang Wen glanced around and, judging from the reactions of everyone present, they all shared the same thought.

He nodded and turned to write on the blackboard.

"The agreement we reached between Taishan Aviation and Boeing Trading is for 1 tons of tung oil per year."

"According to the agreement, Boeing will provide Taishan Airlines with aircraft of equal value. These aircraft will be put into use immediately, and the profits generated will be used to pay for your goods."

"We can achieve three transaction methods with our tung oil suppliers:"

"The first option is to receive cash directly after the transaction, but the price will be 15% lower than the market price. After all, this is a large transaction, and we have to enjoy the wholesale price discount."

"The second option is to trade at the normal market price, but a six-month payment period is required, with full payment due after six months. This will be guaranteed by Taishan Aviation and Boeing Trading."

"The third option is also to trade at market price, but the payment will be calculated as aircraft rental. Tung oil suppliers who choose this option will obtain partial ownership of the aircraft, and Taishan Airlines will lease the aircraft and pay monthly rental fees."

After the three transaction methods were explained, a lively discussion immediately broke out in the room.

Fang Wen glanced at Neil Toledo, signaling him not to be nervous, and the two sat down at the front desk.

The discussion continues, interspersed with various dialects. The dialects of Yunnan, Guizhou, Sichuan, Jiangxi, Hunan, Jiangsu, Zhejiang, and Shanghai are all different, and many of those who can communicate with each other are from the same region.

Understanding it is not an easy task.

After a while, noticing that the discussion had subsided, Fang Wen stood up.

"Gentlemen, what are your thoughts on these three methods?"

When it comes to business matters, you have to ask the questions you need to ask, and several people immediately raised their hands.

Fang Wen randomly chose a seat.

The man started speaking in Sichuan dialect.

"The first option is okay for merchants like us from the southeast. We pay for the shipping ourselves to transport the goods here by sea and sell them. Even if the price is 15% lower than the market price, we don't lose money. But there's not much profit to be made, it's about the same as before."

"The second option, a six-month payment period, even if your Taishan Airlines is a large and powerful company that can guarantee it, my small business can't last six months. This is probably an option offered to big bosses in Jiangsu and Zhejiang."

"I didn't understand the third one, but it seems quite interesting. Could you explain it again?"

The man's words were clear and logical, and they reflected what most tung oil merchants wanted to say. Suddenly, fewer people raised their hands; everyone looked down at the text below, waiting for a response.

Having already prepared his answer, Fang Wen replied, "Let's make it even simpler. I'll sell your tung oil to this Neil Toledo over here. Since Neil Toledo doesn't have enough US dollars to pay me, he'll use the plane as collateral. Of course, it seems like you guys don't really need the plane, so you can lease it to our company to operate, and we'll pay you rent on time every month."

As soon as he said that, many people raised their hands to ask questions.

"Is the plane really ours? How can we prove it?"

"There will be aircraft sales certificates issued by Boeing Trading Company. Everyone who is willing to exchange tung oil for an aircraft will receive a certificate stating the amount of the goods and the number of shares in the aircraft exchanged. This certificate will then be published in major newspapers in Shanghai. Do you think such a certificate is acceptable?"

The person who asked the question smiled and nodded. Airplanes are rare things. To own an airplane, even just a part of it, as long as that ownership is recognized by everyone, is a matter of prestige, not to mention rent.

Another questioner has been selected.

How much is the rent each month? How do I collect it?

"The monthly rent mainly depends on the aircraft's selling price. We have printed out information about Boeing aircraft prices and the types of aircraft that Taishan Airlines accepts for leasing, and we are distributing it to you now. As for receiving the rent, it is not complicated. You come here on the 3rd of each month, and Taishan Airlines' general accounting office will arrange for someone to pay your rent."

After Fang Wen finished speaking, he opened the door and let the Taishan Airlines staff outside in to distribute the materials to everyone.

Some people were looking at the documents, while others still had questions.

Fang Wen chose another one.

"How can you guarantee that we will continue to receive rent? Also, what if something happens to your company?"

"Don't worry about that. Taishan Airlines is a very profitable business. Although I can't say exactly how much it earns each month, everyone should have a general idea. Besides, the rental fee is calculated based on the aircraft's selling price, and it's a fixed amount each month. It should take about three years to break even, and the rest of the time it's all profit. Do you really think Taishan Airlines can't operate for three years?"

After a pause, Fang Wen glanced at the tung oil merchants in front of him and said with a more serious tone, "I think you should be happy if Taishan Airlines goes bankrupt within three years. You own the aircraft, so you can buy the bankrupt Taishan Airlines and start your own airline, right?"

Yes, in those days, civil aviation was just emerging, and Taishan Airlines was known for its safety and stability, so business was booming.

If it goes bankrupt, its own tung oil business will probably have gone out of business long ago.

Amidst a burst of laughter, the tung oil merchants agreed with what Fang Wen had said.

Fang Wen then asked an airline staff member to bring him a stack of papers.

"This is a letter of intent. If you are willing to cooperate, you can sign it now, choose your preferred cooperation method, and leave your contact address for future communication. By the way, if you choose the third cooperation method, please specify the amount of tung oil you can provide."

Immediately, a tung oil merchant asked, "Why?"

"Because Taishan Airlines cannot accept too many aircraft at once, the quota for exchanging tung oil for aircraft in the first batch of cooperation is limited, with a maximum of 4 aircraft. Therefore, the third item is on a first-come, first-served basis, and will be suspended once the quota is full."

As soon as these words were spoken, a tung oil merchant snatched the fountain pen from the airline staff member, selected the third option, filled it out, and handed it to the staff member.

Seeing his expression, the others realized what was happening, and the meeting room suddenly became lively.

Neil Toledo, who had been standing by as a mere decoration and hadn't uttered a single word from beginning to end, watched this scene in astonishment.

He then looked at Fang Wen, filled with admiration for Fang Wen's series of actions.

The first phase of the tung oil-for-aircraft program was successfully completed.

A significant number of tung oil merchants opted for the third aircraft leasing and leaseback program.

Furthermore, this matter has spread throughout the business community.

Everyone was surprised by this peculiar operating mode and discussed it extensively.

But to be fair, exchanging tung oil for aircraft ownership and a stable rental income is a very worthwhile deal.

When we're at a party and chatting about what each other has, I'll mention that I have a plane ticket, and then the other person probably won't have anything to say in return.

Many businessmen are already inquiring about when the next round of the tung oil-for-airplanes program will be restarted. Even if they are not tung oil businessmen, they will try to get involved.

(End of this chapter)