Plane Conversations

(Part 4 of 5)

Pitfalls of Acquiring an Aircraft

You’re chosen your broker, set up your team and chosen an aircraft.  You’re well on your way, but you’re not out of the woods, yet.  Certainly there are many pitfalls in acquiring an aircraft, but these are some of the most common:

Pre-purchase inspection
Just having a pre-purchase inspection performed is not enough.  You need to be certain that the inspection facility understands the make and model of the aircraft that you are buying and is on the cutting edge of current and pending airworthiness directives (ADs) and maintenance issues.  How would you like to buy the only aircraft in your category without an engine program?  Once you’ve bought the aircraft, keep it well-maintained by a first-rate maintenance facility. 

Pending equipment mandates
You purchase an aircraft only to find out that the Federal Aviation Administration (FAA) has mandated additional avionics that will cost a significant percentage of what you just paid for your aircraft, which has happened to aircraft buyers. For instance, there have been FAA mandates on the reduced vertical separation minimum (RVSM), terrain awareness and warning system (TAWS), traffic collision avoidance system (TCAS), and emergency locator transmitter (ELT).  It’s important to learn about pending equipment mandates before you close the deal on your aircraft purchase.

Title issues
More than once I’ve heard buyers or sellers state that they really don’t want to mess with that “IR thing.”  If the FAA reports no liens or encumbrances on your aircraft and engines, but the International Registry (IR) does show an encumbrance, the good ole USA wins the day right?  Wrong!  Not all aircraft require an IR filing, but if your aircraft qualifies, you need to ensure filings are done for the aircraft and engines.  Trust an experience escrow company and agent, like Insured Aircraft Title Service, Inc.

Damage history
If two people sit down and read a log book entry, one might say, “Seems OK to me,” while the other might say, “Something is not right about this.”  The difference?   Experience!  Many sellers have sold their aircraft after representing it as “no damage” or “no known damage” (notice the litigation safeguard difference in the wording…we use it too!) and honestly believed they were telling the truth.  Damage is not always as easy to find as a log entry stating, “Aircraft rolled into a ball.  Repaired in compliance with factory maintenance manual.”   After a first reading of damage entries and several subsequent readings, I’ve sometimes asked myself, “So, was it damaged or …”  Damage can affect the value of an aircraft substantially (10 to 25 percent), so it’s important to determine the aircraft’s damage history.

Possibly the biggest mistake of all
I believe it is absolutely appropriate to aggressively negotiate the price of your aircraft. Pennies add up to dollars if you can save enough of them.  And you can save enough of them on your purchase price; however, if you take this approach in hiring your pilot, you are making a mistake.  You should be prepared to pay top dollar for a first-rate pilot. Aircraft occasionally break, systems fail, and the weather sometimes closes in, but none of these should be life-threatening when you are in the hands of a professional pilot.

Ask your insurance agent what underwriters require as far as a pilot’s minimum qualifications and training.  Then ask what your agent personally recommends.  The answer may be the same, but it may not be; so, ask.  Train your pilot(s) well.  It will cost you more to send your pilot to simulator training twice a year rather than once a year; but, if all hell breaks loose in the aircraft, who do you want in the cockpit?  A pilot who meets your underwriter’s “minimum standard?” Or one who may be over-trained? 

Some pilots are more interested in being able to occasionally use an aircraft than in receiving more pay.  Explore with them what keeps them happy and loyal.  I’ve met many pilots over the years, and the ones who are the most pleasant on the ground and in the air are typically the ones I like the best.  But even the most pleasant pilots may lose their calm if you try to convince them to do something outside of their best judgment.  You may be the boss on the ground; but, you should accept that when it comes to safety in the air, pilots are the boss.

Click on pen to