Welcome to GlobalAir.com | 888-236-4309    Please Register or Login
Aviation Articles
Home Aircraft For Sale  | Aviation Directory  |  Airport Resource  |   Blog  | My Flight Department
Aviation Articles

Retail Owners: BUY, SELL or HOLD?

by Chris Meisner 3. July 2018 13:48
Share on Facebook

As an inventorying-dealer, we are often asked by aircraft owners “Does it pay to make a move now?

The truth is, whenever you buy or sell an asset, there are unavoidable costs associated. Selling a home can be one of the best examples of an expensive transaction with often little monetary value gain. Moving costs, furniture damage, endless time spent cleaning/showing the home, agent commissions often eat up your anticipated fortune. 


An aircraft transaction however, has an overwhelming amount of justified reasons to invest. Whether for business or for personal use, aircraft as we all know are time machines which can also bring value to an owner’s employees, their families, the employee morale at a distant store or a face-to-face meeting with a vendor about an issue.  I would even argue the efficiencies a properly advised owner can create during a transaction can make for large gains in monetary value at times. No, I’m not suggesting you go buy a Falcon 10 and wait for the market to rise, however there ARE opportunities in this current active market, to make smart financial gains in your aviation transaction both for the short-term & long.


Whether it means you are a new private pilot moving up from your first 172 to a faster Cirrus, or whether you are a large corporation looking to sell your Citation XL and get into a large-cabin Falcon, I believe this is a good time to move! With pre-owned aircraft inventories shrinking daily & firming prices, we are already at pre-2008 inventory levels again and first-time buyers are entering the market which we haven’t seen in a decade. Only a couple years ago, we would commonly advise clients the selling would be the tough part, but the buying is easy. Now that is almost opposite in some late-model jet markets where buyers are waiting patiently for months at asking price while the seller tries to locate their new aircraft.


What should you do? Get the advice of a trusted and seasoned professional. If you aren’t already working with a broker or dealer, I recommend starting your search for one at National Aircraft Resale Association From there you’ll have the freedom to rely on your broker’s market intel, along with your good business sense which likely allowed for you to buy an aircraft in the first place. Good hunting and God Bless.


Chris is the Vice President of Meisner Aircraft who has served companies both small and large for over 30 years.  They have built their reputation of providing good sound business advice for clients around the world.  Whether it was a customer purchasing their first single engine aircraft or the larger flight department who needed a company with the experience and expertise to handle a complicated transaction process.  Family owned and operated they have successfully been involved in over $900 million in aircraft sales.  

Tags: , , , , , ,

Aircraft Sales | Chris Meisner | Aircraft For Sale

Does The “As-Is” Language In An Aircraft Purchase Agreement Make A Difference?

by Greg Reigel 2. July 2018 12:33
Share on Facebook

It isn’t uncommon in aircraft purchase agreements to see language stating the parties are agreeing that the aircraft is being purchased “as-is” or “as-is, where-is.” Oftentimes the agreement will go on to also say that the seller is not making, nor is the buyer relying upon, any representations or warranties regarding the condition of the aircraft. And it may also specifically state that the buyer is only relying upon its own investigation and evaluation of the aircraft. But what does this really mean?

Well, from the seller’s perspective, the seller wants to sell the aircraft without having to worry that the buyer will claim at a later time that the aircraft has a problem for which the seller is responsible. So, the seller does not want to represent that the aircraft is in any particular condition (e.g. airworthy). When the deal closes, the aircraft is sold to the seller in its existing condition without any promises by the seller about that condition.

Here is an example of how this works: If the first annual inspection of the aircraft after the sale reveals that the aircraft is not in compliance with an airworthiness directive (“AD”) that was applicable to the aircraft at the time of the sale, the buyer could claim that the aircraft was not airworthy at the time of the sale and demand that the seller pay the cost of complying with the AD. But if the purchase agreement has “as is” language, then the chances of the buyer being able to actually force the seller to pay are low.

Not only does this “as-is” language protect the seller, but it also protects other parties involved in the sale transaction such as seller’s aircraft broker. A recent case provides a nice explanation of the legal basis for this result.

Red River Aircraft Leasing, LLC v. Jetbrokers, Inc. involved the sale of a Socata TBM 700 where the aircraft owner/seller was represented by an aircraft broker. The buyer and seller entered into an aircraft purchase agreement that included not only “as-is, where-is” language, but it also provided that the buyer was accepting the aircraft solely based upon buyer’s own investigation of the aircraft.

During the buyer’s pre-purchase inspection of the aircraft, the buyer discovered certain damage to the aircraft. However, the buyer accepted delivery of the aircraft in spite of the damage based upon alleged representations by the broker that the damage was repairable. After closing the buyer learned that certain parts were not repairable. Rather than sue the aircraft seller, presumably because the buyer recognized the legal impact of the “as-is” language in the purchase agreement with the seller, the buyer instead sued the aircraft broker alleging that the broker negligently misrepresented the aircraft.

In order to succeed on a claim of negligent misrepresentation under Texas law (the law applicable to the transaction), the buyer was required to show (1) a representation made by the broker; (2) the representation conveyed false information to buyer; (3) the broker did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the buyer suffers pecuniary loss by justifiably relying on the representation.

In response to the buyer’s claim, the broker argued that the “as-is” language in the purchase agreement waived the buyer’s right to be able to prove that it justifiably relied upon any alleged representations by the broker. The buyer primarily argued that the purchase agreement language did not apply because the broker was not a party to the agreement. But the Court disagreed with the buyer.

The Court found that

the purchase agreement contains clear language evincing Red River's intent to be bound by a pledge to rely solely on its own investigation. And, because it appears that the parties transacted at arm's length and were of relatively equal bargaining power and sophistication, the court concludes that the language in the purchase agreement conclusively negates the reliance element of Red River's negligent misrepresentation claim.

So, even though the broker was not a party to the purchase agreement, the Court still held that the buyer was bound by the statements/obligations to which the buyer agreed in the purchase agreement, even with respect to third-parties. As a result, the Court granted the broker’s summary judgment motion and dismissed the buyer’s claims against it.

Conclusion

“As-is” language will continue to be common in aircraft purchase agreements. Aircraft sellers and those working with them will certainly want to include and enjoy the benefit from this language. Conversely, aircraft buyers need to be aware of the scope and impact of “as-is” disclaimer language in an aircraft purchase agreement. If a buyer is unhappy with the condition of the purchased aircraft, the presence of this language in the purchase agreement will significantly limit the buyer’s remedies and recourse.

Tags:

Aircraft Sales | Greg Reigel

59th Annual National Waco Club Reunion

by Tori Williams 1. July 2018 11:48
Share on Facebook

Last weekend my husband and I had the opportunity to fly my father-in-law’s 1931 Waco ASO into Mount Vernon, Ohio for the National Waco Club’s 59th annual reunion. Despite some dreadful weather in the area, 13 incredible Wacos were able to fly in to Wynkoop Airfield for at least part the four-day long event. This was my second year attending and it was just as thrilling as my first!

Part 1: The Pilgrimage

Getting ourselves to the fly-in turned out to be more difficult than anticipated. We were planning to head out after work Friday, but the ceilings were too low so we had to wait until Saturday. Ideally the clouds would have moved overnight so we could have an early start but we woke to an 800 foot ceiling. This was one of those incredibly annoying times for VFR pilots when our airport seemed to be the only one reporting IFR in our area. A few miles in any direction, and it was clear, open skies. We are officially blaming the large lake we live beside but sometimes I think things like this happen so we pilots stay humble.

After waiting several hours and listening to the AWOS practically on repeat, it was finally reporting broken ceilings and VFR so we made a break for it. This was around 2pm but that didn’t stop us. Even if we would only be there for the tail end of the festivities we were determined to make it. You don’t miss out on an opportunity like this. It’s practically unethical.

The last hurdle between us and a fun weekend of biplanes was the outside air temperature. Following several excruciatingly warm days we had a cold front blow through just in time for our flight. The temperature on the ground was 63 degrees Fahrenheit. Not terrible but cold for a day in late June. However, we must remember that atmosphere thing where temperature decreases by (approximately) 3.5 degrees F per 1,000 feet of altitude. By the time we got to cruising around 3,000 feet it was 10 degrees colder. Coupled with the inherent windiness of an open cockpit airplane, it was COLD. Thankfully this realization came to us before we left the house, and we both had on our sweaters, scarves, and mittens. In June!

The flight itself was relatively uneventful, and we each spent an hour at the controls. We don’t have modern luxuries of autopilot (or really even a solid elevator trim) so it can be tiring to fly after a while. Dan still says he married me because he needed an autopilot for long trips in the Waco. Har har. Thankfully, we had a tailwind that gave us a ground speed of 120 knots, almost 30 knots faster than our regular cruising speed. We were booking it!

Part 2: The Festivities

The atmosphere provided by the airfield itself is one of the best things about this fly-in. Wynkoop Field is well-maintained grass strip with two runways oriented in a V-shape. There is no fence or control tower, but there are runway lights and a few hangars. Grass strips always make me feel nostalgic for a period of aviation history that I never experienced firsthand: the barnstorming days. How fitting that these 1930s and 1940s aircraft have their reunion at such a place.

I overheard the owner of another Waco put it into words I will now attempt to paraphrase: “If you find another grass airport where you can park your car and walk right up to so many historic aircraft, please give me a call. I have not found anything else like it in my life.” It’s so true!

Despite our late arrival, there were still official (and unofficial) Reunion activities to partake in. My husband loves giving rides, so he was back in the air with a passenger before I even realized it. Evidently the weather had been bad for most of the day, but the sun came out right as we landed. Other Waco pilots began starting their engines to take advantage of the last few hours of daylight. It’s always fun to see them taking off one after another. My father-in-law graciously invited me to fly with him in his Cabin Waco, so soon we were airborne as well.

I can only imagine what the townsfolk in Mount Vernon think of this whole ordeal. Suddenly for a few days every summer biplanes start flying around everywhere. I spoke with a few locals who said they aren’t always sure when the biplanes are coming, but they see them from town and know they’re finally there! A local photographer named Matt Plahtinsky visited during the day and took some breathtaking photos of some of the planes which can be found on his Facebook Page.

After my husband gave who knows how many rides, it was finally time for the banquet and auction. I’m a big foodie, and I have to give props to the catering company for an excellent dinner. Roast beef, chicken, green beans, mashed potatoes, mac and cheese.. my mouth is watering just thinking about it! Following that we had a live auction with some great items to raise money for future National Waco Club events. We had great fellowship with our Waco friends from years past, then drove to the hotel after it was too dark for any more flying.

Part 3: It’s Over Already?

Less than 24 hours after we left Indiana, we were loading up the Waco to head back. I couldn’t believe it. We waited all year for this event and it was over before we knew it. That’s the nature of these things, I suppose. We were just thrilled to have reunited with our Waco friends at Wynkoop for any amount of time. Unfortunately our tailwind heading over turned into a nasty headwind coming back, and it took over 3 hours enroute. Plenty of time to reminisce on our short weekend trip and discuss plans for next year.

Epilogue: Come Next Year!

This year was great, but next year is going to be the 60th Anniversary of the National Waco Club Reunion. It was announced at dinner that the goal is to have 60 Wacos fly in for that one. 60! That number seemed unreal to me but I was told that for the 50th Reunion they had 50 Wacos! Totally doable, then!

This event clearly had a big impact on me and I have since made it my mission to invite everyone to the Reunion next year. Check out the website for the National Waco Club for more information on next year’s event, and I certainly hope you can make it!

Tags:

Aviation History | Tori Williams



Archive



GlobalAir.com on Twitter