What Team of Experts Should You Consult Before Buying an Aircraft?

What Team of Experts Should You Consult Before Buying an Aircraft?

The decision to purchase an aircraft is significant, requiring ample research and planning, in addition to a large capital investment. Selecting a team of experts to walk you through an acquisition and take care of the details will ease the process and ensure you’re getting the aircraft that’s best for you.

Aircraft Acquisition Qualification

One common question that has come up among prospective owners is ‘at what point can I justify acquiring an aircraft.’ While there are many variables to consider, a key benchmark includes charter flight hours per year. As a rule of thumb, someone who flies fewer than 150 charter hours a year should stick with charter. If you fly over 150 combined hours for business and pleasure, acquisition of an aircraft could be right for you. When the latter makes sense, you can always help offset your expenses by chartering your aircraft.

Once you determine aircraft acquisition makes sense for you, consider including the following experts in your decision process.

1. Charter Operator and Aircraft Management Company

Most individuals considering purchasing an aircraft have previously been charter customers, sometimes for many years. When that’s the case, a discussion with your charter operator who is experienced in aircraft management is often the best starting point for discussion.

Your charter operator employs a team of people you trust – you’ve experienced their service and capabilities in scheduling for your business and family. They know the answers to these essential questions that determine types of aircraft that could work for you:

  • What destinations do you plan to incorporate into your travel?
  • How many people do you want to carry?
  • What does your typical flight look like?

Perhaps your business is located in a mountainous area and the nearest airport has a 4,000 foot runway, a set of conditions that some aircraft can’t handle. Your operator knows the specifics of your travel and the information needed for them to recommend a new or used aircraft, and a specific model or manufacturer for ownership.

2. Aircraft Broker or Aircraft Manufacturer’s Representative

Now that you have recommendations from your charter company, you willl need to speak with a reputable broker or aircraft manufacturer’s representative who will be able to give you details of the cost of acquisition of specific types of aircraft.

This person will work with you to figure out the numbers – fixed costs, trending history for maintenance, crew, and training costs, etc. They will be able to give you a realistic expectation of the financial commitment involved in owning and managing an aircraft.

3. Aircraft Lender

After you’ve determined the type of aircraft you will purchase and the total expected costs, you will meet with a lender who can give details on the specifics of how to finance your acquisition. He can explain purchase strategies and tax incentives, and he’ll also know upcoming anticipated changes. Perhaps something is happening in the market or there are proposed tax law changes that could affect your purchase. Your lender will help you determine if now is the right time to purchase or if it’s better to wait.

4. Aviation Attorney

Once the financial details are worked out, you will need to hire an attorney who will represent your legal interests in the acquisition of an aircraft asset. It is recommended that you consult with an aviation attorney who specializes in acquisition and drafting contracts.

The attorney will discuss terms of purchase and finance, as well as details about the pre-purchase inspection:

  • Who will do the inspection?
  • Who will bear the cost?
  • Where will it take place?
  • What they could find?
  • What would make or break the deal?

5. Charter Operator and Aircraft Management Company (again)

This is where it all comes together. You will want to circle back with the original team members, your charter operator and aircraft management company. Your legal team will come back to where you started, coordinating with your aircraft management company’s maintenance department personnel to conduct the pre-purchase inspection on behalf of the owner.

Some prospective owners opt out of a thorough pre-purchase inspection as a cost-savings measure, but this is a very risky move. The inspection can unearth significant problems, particularly in used aircraft, and there’s nothing that can be done if you discover a problem post-purchase.

Once the pre-purchase inspection is complete, it will be time for you to make the decision of whether or not to buy. With the help of the team from your charter company, a broker, lenders, and lawyers, you will have all of the tools needed to make the best choice for your travel needs.

If you are in the middle of this process or considering purchasing an aircraft and need some recommendations of people to consult, please do not hesitate to contact me.