Should a buyer consider a used aircraft previously used in Part 135 charter operations? Is the value impacted? Such aircraft can mean different things to different buyers. Jet Tolbert addresses some of the preconceptions…
A used aircraft ‘For Sale’ that has previously been utilized for Part 135 charter operations can mean different things to different buyers. Jet Tolbert addresses some of the preconceptions…
Some buyers may assume that purchasing an aircraft previously used for charter means it will be ready to go straight into charter service and begin generating revenue for them. Other buyers may harbour reservations over the quality of the interior.
What is the truth about used aircraft previously engaged in charter, and what should a potential buyer keep in mind when considering their purchase?
The Pros of ex-Part 135 Aircraft
It is a fact that the FAA requires aircraft operated on a Part 135 charter certificate to meet a high standard of compliance. From a maintenance perspective that means the aircraft must comply with maintenance items that would only be recommended under Part 91 operations.
Furthermore, the current operator must show traceability for parts, keeping certifications and tags in addition to the maintenance records that are required for non-charter aircraft.
As regards the interior, all components of the aircraft must be fire-retardant to a standard that the FAA considers safe, and the records must substantiate this, in accordance with a stricter guideline than for Part 91.
Simply put, an aircraft operated under Part 135 must meet more stringent maintenance and operational standards that may only be the recommendation for operators of private Part 91 aircraft.
The Cons of ex-Part 135 Aircraft
On the flip side of the argument, the less connection the passengers have with the airplane, the less likely they are to take care of it during travel, leading to faster deterioration of the interior and amenities.
Likewise if the crew is changed regularly, there exists the potential for a diminished sense of ownership from the pilots operating the airplane, along with a possible lack of accountability. If this has indeed been the case in the aircraft ‘For Sale’, these factors will result in higher costs (from brake wear, to fuel consumption, to other maintenance items).
The reason the airplane was put onto a Part 135 certificate could also impact the way it has been operated and maintained – which will ultimately lead to varying levels of quality in the asset when time comes to sell.
As an example, an owner who used the charter revenue as a means to offset their cost of ownership may seek to lower the maintenance costs in the short-term, thus a prospective buyer could find there are deferred maintenance items and cosmetics that are serviceable, rather than exceptional.
An owner who is not using their aircraft very often could be less inclined to invest in the upkeep of cosmetics in the same way an owner using their aircraft more often might be more inclined to invest in their asset. The prudent buyer will need to be thorough in assessing this aspect of their prospective purchase.
Questions for the Discerning Buyer
Note from the above that the underlying issues essentially revolve around the condition of the aircraft. The discerning buyer would be well advised to obtain the ownership history of the aircraft, and establish how much the current owner has been using it (versus the amount of time it has been available for Part 135 hire).
Why did the current owner make it available for charter? Is the owner upgrading to another airplane, or getting out of the business? Answers to these types of questions will help provide a fuller picture of the aircraft, adding a little more color and dimension to your understanding of the asset.
While it is true that the very pristine gems at the highest end of the market are likely to have a history of private use only, the vast majority of Part 91 and Part 135 aircraft could fit into a similar value category, with some slightly above and others below the standard.
The Part 135 aircraft that can demonstrate a good history is going to be worth more than the privately-operated aircraft that can’t.
The only real way to identify the best value will be to identify all of the factors surrounding condition and determine the impact on costs going forward.
This is a time-consuming process, but a good advisory team will help you see the wood for the trees, overcome misperceptions, and purchase an aircraft you can be truly happy with – whether formerly Part 135 or Part 91.