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

What You Should Know About eBay Aircraft Sales

by GlobalAir.com 12. February 2018 14:06
Share on Facebook

We considered listing this plane for sale on eBay
One of the aircraft we considered listing for sale on eBay

When it comes to making any large purchase, being thoughtful and thorough is of the upmost importance. This is true for homes, cars, and especially for airplanes. An airplane is an investment that will hopefully last you years, and absolutely must keep you safe to the best of its abilities when you fly it.

In general, people are wary of where their large ticket items come from. They like to have a full description of the item that is without any deception or misinformation. Typically it is preferred to have a way to inspect the purchase up close, but with aircraft and other online purchases this may be difficult because it is located far away.

One might be surprised to learn that in a Google search for “Aircraft for Sale,” eBay is one of the top results in the first page. Of course, when you search for any number of things followed by “for sale,” eBay also appears on the first page. They’ve been in the business of connecting sellers to buyers for 22 years now. While some may be quick to discount eBay as an unreliable or sketchy source for aircraft sales, there are certainly pros as well as cons to purchasing through their site.

After consulting a few industry experts, reading online forums, and browsing the selection of aircraft for myself, I have come to the conclusion that you just might find a perfectly good aircraft listed on eBay. However, you may have to proceed with more caution than on specific “aircraft for sale” websites. Let’s break it down into the pros and cons.

Pros and Cons of buying Airplanes of Ebay

For the Buyer

Con:

It may be difficult to inspect

As mentioned earlier, the perfect deal is likely not sitting in your backyard. Aircraft can be list a few states away, and without having the ease of heading over to inspect it up close, you may end up buying it sight unseen. eBay did think of this, and you can hire the people are We Go Look to inspect your purchase for you, typically for less than $100.

https://wegolook.com

Pro:

The bid is non-binding.

When you place a bid on eBay Motors, which includes all of their aircraft listings, the bid is non-binding. This simply means that your bid expresses interest in the airplane, but it is not a binding contract between you and the seller. That can be comforting when you want to get your foot in the door but you would still like to read over all the paperwork associated with the plane before you dive in with a purchase.

http://pages.ebay.com/help/policies/non-binding-bid.html#fineprint

For the Seller:

Con:

It may be expensive to list

The terms and conditions on eBay’s site says that there is an $125 fee on listings that are more than $5000 if you list less than 6 vehicles per calendar year. Additionally, the seller has to pay more to have extra photos, extend the listing for more than 7 days, to have their header in bold, and a few other extra features. These numbers can add up quickly, as compared to other aircraft for sale websites where the first listing is often free, and the following ones are at a steep discount. http://pages.ebay.com/help/sell/motorfees.html#volume

Pro:

Your plane is exposed to a larger audience

Although eBay is not as big as it used to be, it does still have a large following. Some old-school aircraft purchasers still check the site, as is evident by the aircraft buyer forums I browsed. Having extra exposure across multiple buying platforms can help your aircraft get noticed and sold, which is the ultimate goal.

Regardless of if you’re buying or selling, you must have your paperwork in order. Any purchase should still be contingent upon a title search showing clear title and a satisfactory pre-purchase inspection.  If you opt to purchase it without a pre-purchase inspection, you are taking a risk that may not be worth it. Some of the most repeated advice for aircraft purchases is to be patient. It may seem like your dream airplane but being thorough with paperwork and inspections is vital.

Another more practical way to utilize eBay is to purchase aircraft parts. You can find some pretty good deals on old parts that only need a little work to look new. If you look at the storefront for Universal Asset Management, you’ll be able to find authentic, rare parts from decommissioned commercial airliners. I found a Russian “EXIT” sign, a flight recorder, and a parking break panel. They have hundreds more treasures listed on their site that do not carry quite the amount of risk involved with purchasing an entire plane.

http://stores.ebay.com/Universal-Asset-Management/_i.html

One more thing:

You may find some hidden treasures.

During my browsing of the eBay airplane listings, I also happened upon an advertisement for 10 hours PIC of multi-engine time in a Piper PA 30 Twin Comanche. In this case the seller is using eBay as a sort of classifieds, reaching a whole new audience that may be thinking about getting their Multi-engine add-on. This is a clever tactic and could be capitalized on if it isn’t against eBay’s terms and conditions!


We ended up choosing not to sell this plane on eBay

Tags:

Aircraft Sales | GlobalAir.com | Aircraft For Sale

The "Acquisition" Team

by David Wyndham 11. December 2017 13:37
Share on Facebook

Remember the old TV show called the A-Team? A rag-tag bunch of former soldiers travel around fighting criminals and righting wrongs. The A-Team was borderline psychopathic (especially their pilot), but they were always on the side of good. Regarding an aircraft acquisition, it takes your own A-Team: an Acquisition Team. You need to know these people and, if they are not within your organization, know where to find them! 

As the leader of this team, you are responsible for defining the mission. What is the key mission of the aircraft? What defines success for the aviation operation? Does everyone on your team know what this mission is? Most importantly, will the decision maker agree to the definition of this mission. This is used to define the minimum deliverable product in terms of capability and performance.

The next team member is the technical analysis person. This person is responsible for developing the measurable criteria for judging the ability of the aircraft to perform its key mission. If you are the pilot, this will be you. That person should be familiar with aircraft performance measures, and have available information that enables them to predict passenger loads, trip lengths, etc. There may need to be runway analyses, equipment needs, and for helicopters, the vertical performance measures necessary for the operation. The technical person needs to be able to have the data needed for this comparison. This person will help to identify candidate aircraft and then to analyze the aircraft against the mission.

Part of the technical analysis deals with maintenance requiorements. If purchasing a pre-owned aircraft, what may be required in terms of upcoming maintenance or upgrades? Where and who can do the pre-buy? If you have in-house maintenance, they are the best as they already know your operation. 

The next person to get on the team is the financial analysis person. That individual needs access to what it costs to own and operate aircraft. There are different ways to finance an aircraft, and if it is for business use, different tax ramifications. This person needs to understand Life Cycle 

Costing and be able to look at the total cost of owning and operating the aircraft.  If leasing, what are the return and buy-out options? Many leases have significant penalties for early returns, and most have specific return conditions that can add cost. Leases can be a great way to acquire an aircraft, but they aren’t for everyone. This person needs to understand the nature of operating costs and be able to communicate with the maintenance professionals regarding the costs of upcoming maintenance as well as then communicate and understand the costs as looked at by the Chief Financial Office or accountant.

A close ally of the financial analysis person is the tax/ownership advisor. Tax planning should begin well before the purchase, not after the closing. Aircraft, by the nature of their mobility, may be exposed to taxes in multiple states. You need someone familiar with taxes as they apply to aviation. How do you plan to structure the ownership of the aircraft? Things to plan for are where and when will you take delivery? Are there sales or use taxes due and if so, who is responsible for collecting and remitting them? 

With the aviation tax person should be an aviation attorney. This person will  need to be consulted to ensure that the contracts are appropriate and that the various regulatory issues are addressed. Are there leases, timeshare agreements, charter? A document that looks good from a basic business perspective may not be legal in the eyes of the FAA or other aviation authority. The FAA can be strict in enforcing the regulations regarding "for-hire" operators and you need to make sure that you are operating legally. 

Don't forget your insurance broker. They need to be kept informed as to what, when and how the aircraft is to be used. If you don't mention all the uses for the aircraft you may not be insured. What are your insurance company's requirements for the training and currency? Will it be different if you acquire a different aircraft? If the aircraft is to be on a management agreement, who and how are each of the parties to that agreement covered?

Next is the aircraft sales professional. This individual needs to know the state of the aircraft sales market, what the availability and lead times are for various models, who to contact about pre-buy inspections and appraisals, and what sort of time it could take to dispose of your current aircraft. Anyone with Internet access can "find" aircraft for sale. The aircraft sales professional needs to act in an advisory role and as a facilitator to make sure the deal closes with all parties happy as a result. 

Lastly, don’t forget the a title search for used aircraft. They can also provide title insurance and provide the escrow entity for the closing as well as register the aircraft. The minor cost of this is well worth the piece of mind. 

If your are looking at large cabin jets, you may have requirements for crew rest, galley equipment, and internal baggage. If you have a cabin attendant, they need to be on the team. Same with the scheduler or dispatcher. Anyone with an interest in the successful outcome of the acquisition needs to be at least informed as to what is happening. Everyone has a different perspective and will see things that others may miss.

Acquiring an aircraft should never be done in a hurry. There are many issues to cover and remember the PPPPPP rule! (Prior Planning Prevents Pitifully Poor Performance). 


 

Tags:

Aircraft Sales | David Wyndham | Flight Department | Aircraft For Sale

What’s Good About Used Aircraft Sales? Market Changes Could Stimulate Used Jet Sales…

by GlobalAir.com 8. December 2017 12:02
Share on Facebook

Article written by and with permission:
Michael D Chase
Principal
Chase & Associates
1628 Snowmass Place
Lewisville, TX 75077
www.mdchase.aero
Cell: 214-226-9882 • Office: +1.972-966-1440
services@mdchase.com

Questions about the Business Aviation recovery still linger as there has not been much market movement to date. With most of 2017 behind us, however, we may be on the ‘cusp of change’. ‘For Sale’ inventories are down and aircraft transactions are up, while business jet prices remain weak.

Real gross domestic product (GDP) increased at an annual rate of 3% percent in Q3 2017, according to the ‘advance’ estimate released by the Bureau of Economic Analysis. In Q2, real GDP increased 3.1%. This is welcome news because, as we have historically seen, when GDP is at the 3% growth mark (or higher) Business Aviation traditionally does well.

These quarterly GDP changes between 2009 and 2017 can be viewed in Table A. Highlighted in yellow are the quarters that GDP was 3% or higher. Historically, we have not seen two back-to-back quarterly GDP increases of 3% or more since Q2 and Q3 2014.

 

 

The ‘For Sale’ Inventory

Chart A illustrates that the ‘For Sale’ inventory of Business Jets has decreased steadily from a high-point in July 2009 (2,938) to 2,225 jets in September 2017. That’s a reduction in the percentage of the in-service fleet from 17.7% in July 2009 to 10.4% now. This is a positive sign as the inventory ‘For Sale’ is dropping, albeit slowly.

Today’s market remains good for buyers because the aircraft ‘For Sale’ inventory remains over 10%. If jet owners are retaining their business jets longer since the downturn began in 2008, perhaps that would help explain why the used business jets ‘For Sale’ inventory has remained at such high levels since the Great Recession.

The percentage ‘For Sale’ has dropped from 11.0% in January 2017 to 10.4% at the end of September 2017. Indeed, most aircraft business jet dealers and brokers today would tell you that the pristine used jets that were on the market a few years ago have become more challenging to locate.

 

 

Used Full Sale Transactions (Including Whole Sales & Leases)

Further analysis of January-September 2017 shows mixed results for the six segments reported by JETNET in the September 2017 YTD Market Information release that included full sale transactions increase for business jets (5.9%), turbine helicopters (5.7%) and Commercial Airliners (8.8%) in YTD numbers (YTD September 2017 versus YTD September 2016).

The remaining three segments reported double-digit decreases in transactions with piston helicopters (-14.1%) showing the largest drop in YTD 2017 vs 2016.

Charts B & C depict the 12-Month used business jet and turbine helicopter moving average, displayed for the full retail transactions from January 2012 to September 2017.

From January 2012, used business jet transactions steadily increased until 2014—from 2,300 to over 2,800. A leveling-off followed in 2015, and 2016 produced mixed activity (while remaining well above the 2,800 line of transactions).

Since dropping to 2,652 transactions in January 2017 the used business jet market segment has shown a sharp recovery through September 2017 (2,833). This could be a result of built-up demand in the US after the newly-elected government administration finds its footing and the stock market continues to climb to record highs.

 

 

Since reaching a low point in January 2017, the used turbine helicopter market segment has shown a very rapid recovery leading into September 2017 (see Chart C). This is great news, and could indicate better days ahead for the turbine helicopter market.

 

US Jet-A Fuel Price

As of November 6, 2017, US Jet-A average price was $4.76/gallon and appeared to be on the rise. This fuel cost increase could have a negative impact on some of the progress we have been making in business aircraft flight activity. Nevertheless, today’s price is still around $2.00 less than the 2012 record fuel price of $6.84/gallon, as shown in Chart D.

 

The past 12 months of flight operations from September 2017 have been running 2.3% ahead of last year. Flight operations have not reached the peak of 2007 yet, but the trend is a positive sign nonetheless.

 

 

In Summary

Historically, the fourth quarter of the year reflects the most sales growth over the other quarters. We expect to see further growth in Q4 2017 to round out a very good year for used business jets and turbine helicopters. ‘For Sale’ inventories are slowly coming down and sales transactions continue to trend in a positive direction. We keep our fingers crossed and will continue to monitor business aircraft activity through future articles.

Tags:

Aircraft Sales | GlobalAir.com | Aircraft For Sale | News

The Aircraft Acquisition Plan

by David Wyndham 8. November 2017 09:52
Share on Facebook

 

There are two fundamental reasons for acquiring new or different aircraft: (1) the current aircraft can no longer perform the mission and/or (2) the current aircraft is no longer the most cost effective solution.

Changes in mission need to be both quantified and qualified. For example, one client in the Southwest US was looking at significantly more travel to the West Coast. Their turboprop could not do the trip nonstop with the required passenger load. Their travel pattern was changing. Another client was looking at non-stop from the US to Asia. But this client was only flying that trip four to six times per year. 

If your company downsized or just sold the international division, then why continue to operate a long range aircraft? Maybe the mission has grown in a different direction. Rather than carrying a family of four on a heli-tour, you have an opportunity for electronic news gathering or have won a contract to haul a geological team to a remote site. The aircraft is a tool that enables you to get the job done. Sometimes, you need a different tool. 

You need to quantify to magnitude of the change. And, for the purchaser, what sort of value will changing aircraft the ability of the company (or individual) to be  successful? How important is non-stop versus one-stop? How much value is added by having a couple ore passenger seats? 

Economics also come into play. While the mission remains essentially the same, maybe your current aircraft is facing significant costs. Our studies and many others indicate that as aircraft age, the costs to maintain it increase. Along with the increase in cost comes an increase in the number of days per year the aircraft is in for maintenance. Additionally, for out of production aircraft, especially those with limited production runs or from manufacturers who no longer build aircraft, the availability and pricing of spares can be a serious issue. For a commercial operator, the loss of revenue from not being able to fly as many days can be worse than the added cost of maintenance. 

What is the long term cost of keeping the current aircraft versus replacing it with a newer one? I’ll discuss how to do this costing in a future article.

Whatever the reason for suggesting an equipment change and before making recommendations to senior management it pays to have a good Aircraft Acquisition Plan

To build up justification for changing or even acquiring an aircraft, you must have a plan. An aircraft acquisition plan must at a minimum:

- Identify and quantify the air transportation needs.

- Differentiate between "required" (or must have) criteria and "desired" (or nice to have) criteria.

>- Identify the aircraft best capable of meeting the transportation needs.

- Compare each of the aircraft against the requirements and rank order them.

- Contain an analysis of all the costs involved with acquiring an aircraft: acquisition, operating, and residual values. Also needed to be considered are taxes and market depreciation.

Just as a successful business has a plan for the future, so should the aviation operation. Once an aircraft is in operation, it usually is there for at least five years and often for much longer. Therefore your Aircraft Acquisition Plan should look out for at least a minimum of five years, or as long as you expect to operate that model. 

Your plan should be void of emotional issues and stay as far from subjective criteria as possible. Having firm numbers doesn't remove all questions, but it does offer a justification based on reasoned thought. If someone wants to adjust the numbers, it is far easier to reflect that change in an updated plan and to see the effect on the results. 

The final decision maker may make a final decision that leaves us pondering the result. Those emotion-led decisions are are fine to those who can accept 100% of the risk and 100% of the reward. As an advisor, we need to have a well thought out, analytical plan. 

In detail, an effective plan consists of the following elements:

- The organization's real aircraft needs.

- Key missions and evaluation parameters.

- Sources of information.

- Technical analysis and ranking.

- Fleet size.

- Financial alternatives.

- Financial analysis and ranking.

- Tax Planning.

I'll address all these over the next months as a continuing series. 

 

Tags:

Aircraft Sales | David Wyndham | Flight Department | Aircraft For Sale

Leading Edge Aviation Solutions - Teams up to provide key benefits to clients

by GlobalAir.com 16. October 2017 13:19
Share on Facebook

KEY PLAYERS IN THE AVIATION INDUSTRY COLLABORATE WITH BROKER/DEALER LEADING EDGE AVIATION SOLUTIONS TO PROVIDE BENEFITS TO LEADING EDGE CLIENTS

Some of the most prestigious aviation firms in our industry--Argus, FlightSafety International, Marsh, and MedAire—together with broker/dealer Leading Edge Aviation Solutions announced at the National Business Aviation Association Exhibition and Convention in Las Vegas on Wednesday, October 11, 2017 that they have collaborated with Leading Edge Aviation Solutions in an exclusive benefits program. All were present at MedAire’s booth at the NBAA convention to make the announcement.

This program will offer discounts or other benefits for certain of their products or services to Leading Edge Aviation Solutions’ clients who are buying or selling their aircraft through Leading Edge and/or utilizing Leading Edge technical or consulting services in the buy/sell process. Leading Edge calls this benefits opportunity for their clients “THE EDGE – Benefits”

Leading Edge Aviation Solutions

THE EDGE® is Leading Edge Aviation Solutions’ complete suite of services for buying, selling, technical services, and consulting for aviation. We couldn’t be prouder to now include “THE EDGE-Benefits” in our service offering.

Joe Carfagna, Jr., President of Leading Edge Aviation Solutions said, “We are proud of THE EDGE-Benefits program for our clients, and most especially we are delighted and privileged to work with some of our industry’s key players in effecting and maintaining the program.“

“MedAire is excited to offer industry-leading travel safety solutions to THE EDGE--Benefits program,” said Vice President Strategic Partnerships, Jeffrey Dickey. MedAire has over 30 years of expertise providing medical and security advisory services, medical kits, and first responder training to give you the resources to take the best possible care of passengers and crew members — wherever you travel, whatever may happen."

“ARGUS is proud to be part of this exciting program”, said Joe Moeggenberg, President & CEO of ARGUS International. “THE EDGE--Benefits will continue to provide value added products and services to Leading Edge clients long after the transaction is completed.”

Dave Davenport, Executive Vice President, Commercial said “FlightSafety International is pleased to serve as the preferred training provider for THE EDGE--Benefits program . We look forward to providing Leading Edge customers with the highest quality training, outstanding service, and value they deserve and expect from FlightSafety.”

Joseph Braunstein, General Aviation Practice Leader, for Marsh, said: “Marsh is proud to be the preferred insurance broker for Leading Edge and assist its clients in the placement and servicing of their aircraft hull and liability insurance.”

Leading Edge Aviation Solutions is one of the aviation industry’s premier private aviation broker/dealers with over 28 years of experience in the aviation marketplace. Leading Edge is a leading expert in the sale, purchase and valuation of corporate, business and private aircraft with over $10 billion in total aircraft sales,acquisitions and new aircraft deliveries and acceptances in that period. We also offer consulting and technical services where we advise some of the world’s most successful people and companies in various aspects of private aviation.

Tags:

Aircraft For Sale | Press Release



Archive



GlobalAir.com on Twitter