(Part 3 of 5)
Questions to Consider Before Purchasing an Aircraft
You’ve made the decision to buy and aircraft and you’ve found a great buyer’s agent / broker to help you. Now, it’s time to ask yourself some questions; so, here’s a list to help you get started. If you are a first-time aircraft buyer, you may not know the answers to some of these questions. That’s okay, just use your best judgment. Of course, these questions and your answers are just the start of the aircraft purchase process, but they will point you in the right direction, assisting you in your decision making and helping guide your agent toward the right aircraft.
1. What is the primary purpose for the aircraft?
2. Do you have an aircraft in mind?
3. What is your mission (How many passengers will typically be on board? How far are you going? To which cities/airports are you flying? How long will you stay? How often will you fly? etc.) ?
4. Is the aircraft you’re considering suitable for 80 to 90 percent of your missions?
5. What is your budget?
6. Will you be the pilot or the passenger?
7. Will you hire your own crew and manage your own aircraft or hire a professional management firm to manage the aircraft for you?
8. If the aircraft will be used for both business and pleasure, what is the percentage for each use?
9. Are you trading an aircraft?
10. When would you like your new aircraft to be in service?
If you will typically need to carry eight to ten passengers with their bags, you can begin to narrow your purchase choices because you will require a larger aircraft. Maybe you will need to visit three to four cities a day but stay in each for only one to two hours. In order to do that, you may require a faster aircraft. If you plan to land at high-altitude or short runway airports, that will help narrow the field for you, as well.
It is not uncommon to get mentally stuck on the few trips per year that an aircraft cannot accommodate for one reason or another, which is why it’s important to remember that the aircraft you buy should be suitable for 80 to 90 percent of your trips. Unless you have an unlimited budget, buying an aircraft is a trade-off between dollars and capability.
Out of the Box Thinking
Don’t get caught in the all or nothing mode of thinking. Maybe two smaller aircraft make more sense for you than one large aircraft. Maybe whole ownership along with fractional ownership of an aircraft is more appropriate. Chartering the right aircraft for those few trips for which your aircraft isn’t suited may be just the ticket to a smooth-running flight operation. Even the largest companies find that using an alternative aircraft for supplemental lift is more cost-effective than purchasing a big aircraft or expanding their fleets just to handle a few trips. Booking flights on a scheduled air carrier should be considered in your decision making, as well. Your buyer’s agent can help you determine the best options for you.
Assemble Your Team
While your agent can guide you in assembling a team to facilitate the purchase of your aircraft, you need to make sure this “mastermind alliance” is in place and working for your benefit: besides your agent, your team should include a certified public accountant (CPA) or skilled tax specialist, an attorney for limited liability company (LLC) formation and asset protection issues, an insurance professional, an escrow agent, a banker or lender, an inspection facility to conduct the pre-purchase, and possibly a pilot or pilots who can perform a thorough evaluation of the aircraft when it is in flight.
The Biggest Question of all
If you are purchasing a pre-owned plane, don’t expect it to be in the same condition as a new plane. There will be squawks. Just ensure your broker negotiates strongly on your behalf and guides you through the process. However, if you discover that the plane’s condition is not as it was represented or that the costs to put it into quality condition are too high, are you willing to walk away from the deal? Professional brokers and buyer’s agents rarely have deals fall apart after pre-purchase. Trust them to guide you through the solutions but be willing to walk away if it is the best course of action for you.