How to successfully purchase a business or private aircraft

Buying a business aircraft may be one of the biggest investments for any company or individual. With a wide variety of aircraft available for sale worldwide, finding the right one at the right price, with the right terms, and avoiding unpleasant surprises is a complex project that requires discipline, focus and persistent attention-to-detail.
A successful acquisition is a team effort requiring expertise in aircraft management operations, market research and analysis, legal, tax, insurance, finance and project management.  Here are some useful tips to planning and executing a smooth and stress free purchase.

Assemble the right acquisition experts.

A good acquisition team is the backbone to any successful transaction. The private aircraft buyer should first and foremost assemble and retain an experienced team to address the acquisition. Experts knowledgeable in brokering, taxes and technical subjects related to business aviation are essential. Buyers should note that business aviation has unique requirements, thus for a company, the team used to acquire land for a new factory may not be the best choice for advising on aircraft acquisition. By hiring the following key players, the buyer will receive the best advice regarding selecting the right aircraft make/model that fits the company’s mission profile based on technical specifications, layout, price, maintenance history and cosmetic appearance; and spotting potential legal and tax issues that may exist depending on where the private jet is currently located, where it will be based, and how it will be owned and operated.
    • Acquisition Broker: To manage the aircraft selection and coordinate the entire acquisition process including liaison with the seller;
    • Aviation Lawyer: To ensures proper documentation and closing mechanisms;
    • Technical Inspector: To Coordinate the pre-purchase inspections;
    • Aviation Tax Professional: To advise on tax issues.


Selecting the right airplane for the mission.

Defining operational requirements with an understanding of actual operational contingencies is necessary to avoid costly surprises and frustrations. For example, headwinds, ATC delays, customs port-of-entry requirements, and challenging destinations (mountainous terrain, hot/high elevations, runway length, etc.) can all adversely impact the optimistic ranges advertised by aircraft manufacturers.

Not Limiting your choice

Limiting your choice to one specific aircraft or aircraft model during the search and negotiation process would be a mistake; especially in the current market, where there may be others which offer better value.   When a seller becomes aware you have an emotional attachment to his or her aircraft, your negotiating position is substantially diminished. Keep your options open.

Completing a thorough pre-purchase evaluation.

Do not be penny-wise and pound-foolish. Even if purchasing the aircraft from a friend or colleague, inspect the most common problem areas of the aircraft and its logs and records. The records must be comprehensive and complete. The devil is in the details of documentation. Damage history, life-limited components, and conformance with the manufacturer’s maintenance program are just three key areas that could pose high-risk to an inattentive private jet buyer.

Buyer availability and timely response.

It is essential for the business aircraft buyer to be available to member of your acquisition team at milestone decision-points with clear, concise and direct communication. “Time kills deals”. Poor communication risks unpleasant surprises and misaligned expectations.

Applying early for financing.

If the buyer plans to finance the aircraft purchase, he or she should immediately engage in the process of soliciting loan proposals and identifying a preferred lender. The process of negotiating the loan terms is often an arduous and time-consuming exercise. While most lenders generally request specific information on the aircraft to be acquired, they are typically able to provide general financing terms in advance if certain specific private jet parameters are provided (such as model year, price range and aircraft type). Many aircraft transactions fail at the closing stage or get delayed because the private aircraft buyer procrastinated in arranging for financing.

Bottom Line.

Plan well and assemble the right team, and you will most likely be rewarded with a smooth and stress free transaction.
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