Whether you’re buying your first used jet, or preparing for the latest arrival to an already established flight department, savvy buyers make the right decisions early in the process
The five-point checklist every used jet buyer needs
Whether you’re buying your first used jet, or preparing for the latest arrival to an already established flight department, savvy buyers make the right decisions early in the process, asserts Jet Tolbert, American Aircraft Sales. Here are notes to help with your decision-making…
The crucial early steps of an aircraft acquisition set the stage to ensure you’re buying the right aircraft at the right price, and that regulatory procedures are correctly followed to ensure the newly acquired jet is put into service as soon as the money clears the bank.
Setting Yourself Up For a Fall?
Lately I have become increasingly aware of buyers who are relying on non-aviation-savvy vendors they trust in other facets of their business for the purchase of an aircraft. These vendors are undoubtedly very well versed in their respective areas of expertise, but make no mistake: they are not proficient in dealing with the intricacies of aircraft transactions.
I have seen buyers using non-aviation proficient vendors who have had their jet grounded and flights cancelled as the result of unforeseen problems that a vendor specialized in aviation could have seen or anticipated.
While an aircraft purchase can be a very smooth process, and sometimes may even seem easy when managed by seasoned professionals, you should never underestimate the dozens of crucial decisions that are made throughout the acquisition process. Getting any one of them wrong could result in regulatory problems after the purchase.
Setting the Stage for a Predictable Outcome
In 99% of the smooth-flowing transactions I have been involved with, the buyer and seller had both bought into the idea of creating an environment that was managed by aviation professionals. When outside help was needed, only aviation-specific contractors were used, most often as referred by another trusted aviation professional.
Keep in mind those with well-established firms that regularly handle aircraft transactions will have their own internal checklists and processes to ensure their performance is exact and dovetails to the input offered by other advisors. Those firms will also have a deep well of industry connections from which to draw, and refer other advisors.
Your Checklist: Building Your Advisory Board
A good acquisition team is the backbone to any successful transaction. While it’s true there are experienced aircraft sales agents who will go out of their way to ensure the entity buying their aircraft has all their ducks in a row, there are too many sellers who are not prioritizing the buyer’s needs.
As the buyer, you should make sure all of the ‘t’s’ are crossed and the ‘i’s’ dotted by building a team around you and getting the right advice throughout the process from the following key players:
- The Buyer’s Agent: Manages the aircraft selection and coordinates communication internally (including with the seller);
- Aviation Attorney: Ensures proper documentation and closing mechanisms;
- Technical Inspector: Coordinates the inspection and analyzes the inspection report;
- Escrow Agent: Manages funds and documents;
- Aviation Tax Professional: Advises on sales tax as well as tax-deferment strategies.
Aircraft transactions move quickly. Sellers are reluctant to take their aircraft off the market without an offer that indicates a clear and efficient timeline for inspection and closing. Before any offer is tendered, however, the buyer should be well prepared with their financing in place, documents and closing processes vetted by aviation counsel, aviation tax advisor and aircraft technical inspector, ready to go.
Having a relationship with a trusted, long-established broker or acquisition agent will help make sure the process is handled smoothly from start-to-finish, with the right advisors guiding you with the right decisions every step of the way.