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High-Wing Vs. Low-Wing Aircraft

by Tori Williams 3. May 2017 17:28
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One of the first things an aspiring pilot learns is that not all aircraft are created equal. At least, not in the eyes of other pilots. It doesn’t take very many conversations with a pilot to find out exactly what type of aircraft they love and hate. Some pilots have good reasons for preferring one type over another, while others just have a soft spot for a certain type they trained in or became infatuated with.

The disagreements cover a variety of aircraft types. Tailwheel verses nose gear, retractable versus fixed gear, G1000 versus the historic six-pack. Each of these has been debated between pilots for years and I’m sure they will continue to be debated. Another popular category is high-wing verses low-wing aircraft. I personally have a preference for high-wing, as the vast majority of my flight time has been in Cessna 172s and a Stinson 10A.

I was curious what the general consensus was on where the best location for the wings is, so I took to the Internet and… Found no clear answer. It seems that there are pros and cons to both configurations, and it almost always boiled down to preference over hard facts. I have compiled a few major things to consider if you are in the scenario where you must choose between a high-wing or low-wing aircraft.

Visibility

Visibility was one of the first things pilots commented on when debating between the two. High-wing aircraft simply give pilot and passengers a better view of the sky around them and ground below them. They are ideal for an introduction flight, cruising around for fun, or flying on missions that require a clear view of the ground. Low-wing aircraft offer outstanding views of the world above the cockpit, but the wings can block anything below.

Accessibility

When fueling on the ground, it is usually much easier to access the tanks on a low-wing aircraft. Most high-wing fuel tanks require standing on a ladder to reach. However, the flip side of this is that it is more difficult to reach the fuel drains and visually inspect the underside of the wing on a low-wing aircraft.

Ground Clearance

Pilots of low-wing aircraft have to be more conscientious of any obstacles on the ground. This includes taxiway lights, tie-downs, and airport signage. The high-wing pilot still has to watch out, but has the ease of knowing their wings are not in such close proximity.

Safety

In the event of an emergency landing, low-wing aircraft have the advantage of being able to absorb some of the crash impact in the wings instead of the fuselage. They also help in the event of a water landing, having the potential to float above the water for a short period of time.

Some pilots love having shade under their wings on a hot summer day. Other pilots prefer being able to set maps or logbooks on the wing during preflight. Some pilots hate having to walk on the wing to get into the aircraft.

At the end of the day, there is no clear winner. It seems that it mostly comes down to personal preference and familiarity with the type of aircraft. Do you prefer high-wing or low-wing? What do you think makes one better than the other? Let me know in the comments below!

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Aircraft Sales | Aviation Safety | Flying | Tori Williams

Five Tips for Aircraft Financing/Leasing

by David Wyndham 3. May 2017 14:39
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There is money available today if you are interested in financing or leasing a business aircraft. Interest rates are still low. Here are five rules for getting financing or leasing.

Rule #1. Dance with the one you brought.

Relationships matter. Financial institutions are looking for long-term relationships. If you have done significant business with one institution over the years, they are the first ones to approach for any aircraft financing or leasing. One private banker told me "If you have $300 million in assets with (my bank) there is no way we won't do an aircraft deal with you." Part of this is the significant investment the financial institution has made in keeping you, and your cash, in the bank. The other is that in cultivation and supporting your business, they have a very good idea as to your character.

Rule #2. Character counts.

The Four C's of financing are Character, Credit, Collateral, and Cash Flow. Do you have the credit available for the deal in mind? Aircraft deals can be far more complex than other assets. Any financial institution needs to manage and measure their financial risk and it starts with your credit. Another part in managing the risk is what other assets do you have to guarantee the aircraft deal? Standalone, the financial institution may not want to do interest-only financing, but if you have cash, stocks, and other investments well in excess of the aircraft value, then the risk is lessened. Can you keep the aircraft flying? For $2 million you can buy a 15-year old turboprop or a 22-year old large cabin jet. However, the annual operating budgets are going to be vastly different. Can you afford the $3 million engine overhaul on the jet? Character, whether are you a person of your word, counts more than all the above.

Character ties into rule number one above. The financial institution wants to know, not only from a balance sheet perspective, but from who you our your company is, will you stand by the deal? Given enough money for lawyers, it seems like most contracts can be broken or amended. The financial institution is looking for a trustworthy account.

Our company founder and dear friend, Al Conklin, told me that he measured every sale by the value of the person's handshake. If he didn't trust the person, no amount of legal contracts and forms would make him feel good about the deal.

Rule #3. Get what you need, don't overbuy. 

Aircraft are wonderful business tools. They get you to many places far faster than any other mode of transportation. They enable you to make the out of every minute and do so in a safe and secure environment. Given the availability of pre-owned aircraft you can easily step up in size nod capability for not a lot more money. Get the aircraft that does the majority of your flying in a cost effective manner. Need or want the big cabin plane? Then charter one when necessary. 

I had one client who would not consider a plane in which he could not stand up in the use the lavatory! The smaller cabin jet was less costly to own and operate, but he wanted and was willing to pay to stand. He ended up not buying and continuing to charter. If you do decide to upsize, make sure you understand the ramifications of the budget and are willing to pay.

Rule #4. Communication is key. 

For the lessor, lender, or insurance broker to make sure you get the best service, make sure they understand how you plan to use the aircraft. Will you be doing charter? Will it stay in North America or spend a lot of time in other locations? Are their management agreements? If so, is the financial institution protected adequately in terms of a loss or lien?

Rule #5. Plan.

While a cash-only transaction can be done in the time it takes for a wire transfer to occur, even the aircraft registration process will take more time than that. A US-only financed deal can take three to four weeks at the absolute fastest. Better plan on a month or more. If there are two countries involved, if the Ex-Im Bank is involved in the financing, plan on three to four months minimum for the deal and the importation of the aircraft. 

Financing or leasing a business aircraft is complicated and involves significant finances. You should have qualified aviation legal and tax advice. 

 

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Aircraft Sales | David Wyndham | Aircraft For Sale

Private aircraft for sale under 5 million, what to buy?

by GlobalAir.com 19. April 2017 12:23
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What kind of private jet can I purchase for 5 million dollars?

We hear that question alot!  The quick answer, there are all kinds of private jets that can be purchased for 5 million or less.  But, there are many factors that you must consider first.  The most important decision you must make is what is your “Mission Profile”? Just like cars and trucks what are you going to do with it? You buy a truck to haul stuff, you buy a Volkswagen to save gas, you buy a van to haul kids. All three could be priced exactly the same given the year of manufacture and condition. If you don’t know your mission profile I will promise you that the 5 million will go right out the window and maybe without ever flying what you purchased.

Questions to consider (just to name a few); Are you carrying a lot of passengers or is it going to be you and your cat? Are you going to fly it or hire professional pilots. Are you flying cross country or over the Atlantic once a week or just going to a vacation spot once a year.

The second thing to consider is the cost to operate and cost to maintain. Most single aircraft (not all) corporate flight departments in general have an operating expense of one million US dollars per year (again depending on several different factors).

So with that all said here is a list that you can review:

Gulfstream IV - Priced in the 4–5 million dollar range. This aircraft can fly from Chicago to London non-stop on almost all conditions. Carries around 15 people in jetsetter style. Maintenance though is going to be well over a million plus each year.

Gulfstream IV private aircraft under 5 Million dollars

 

The new “Fly it yourself” aircraft the Cirrus Vison SF50 - holds 3.5 people comfortably and you fly it yourself. Other wise know as “Dr. Killers”. Around 3 million.

Cirrus SF50 private aircraft under 5 Million dollars

 

Another newbie on the block the Hondajet - Base price is about 4.5 million. Seats 4–5 comfortably and has a range around 1200 nm at about 420 knots.

HondaJet private aircraft under 5 Million dollars

 

If you are looking at an aircraft with less cost to operate but shorter in range and capacities then the Pilatus PC12 is a good choice.

Pilatus PC 12 private aircraft under 5 Million dollars

 

We could go on and on about what to buy for 5 million bucks. Bottom line there are several different types of aircraft to choose from. Your best bet right off the bat is to look on line at an aircraft for sale website like Globalair.com, and look at the many different type aircraft there are. Then do yourself a favor and hire a good qualified aircraft broker that can help you figure out what you mission profile is. That in itself will save you at least a million!

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Aircraft Sales | GlobalAir.com

Oldies But Goodies, the decision to buy a new aircraft versus old(er) aircraft

by David Wyndham 18. April 2017 15:32
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The majority of manufacturers of new turbine business aircraft are still having difficulties selling their new aircraft. Sales remain sluggish. According to GAMA 2016 was the worst year for business jet deliveries since 2004. Ref: http://aviationweek.com/bca/business-jet-shipments-lowest-2004-gama-says

When I talk to brokers of pre-owned aircraft, many are reporting that 2016 was a very good year and that 2017 is continuing the upward trend. Why is that? One reason is that there are still a lot of quality pre-owned aircraft for sales at prices that have not recovered since the last recession. 

A friend in the finance industry who frequently works with high net worth individuals reports that for them, buying new is not financially the best option. Ten, 15 or 20-year old business jets are safe, have relatively low time versus their life, and, if you understand the maintenance requirements, can offer years of excellent service. 

Business jets still depreciate at alarming rates. A rule of thumb for a new business jet? Try 8% to 10% per year! Sources like Vref and the Aircraft Bluebook Price Digest support this with historical data. For a number of models, you can easily buy a seven-year old for about half or less than acquiring new. The manufacturers' sales people stress the new aircraft have much lower operating costs due to the lower maintenance costs, have the latest avionics, and new aircraft warranties. They are right, but still - that market depreciation! Being a numbers person, I ran some numbers.

looked at several popular large cabin business jets and the below is an average of a couple models. I used Vref pricing and ran operating costs to include the costs aging aircraft maintenance using our Life Cycle Cost software. Here are a couple things to consider.

Acquisition

New aircraft list = $44 million 

7-Year old model = $7.5 million

15-Year old model = $3 million

 

Knowing that acquisition is only part of the costs, what about the variable operating costs - including all the older aircraft maintenance?

Variable Cost Per Hour (on engine hourly maintenance program)

New aircraft = $3,800 per hour 

7-Year old aircraft = $4,900 per hour

15-Year old aircraft = $5,100 per hour

$1,300 per hour in operating cost is a lot - 34% greater than for the new model. The new jet, $44 million and you are good to fly right away. The 15-year old might need $2 million to $4 million in upgrades, new paint & interior, ADS-B, and some engine work. Even the 7-year old will need some upgrades. 

But when you look at residual values as a financier does, that difference in the operating cost budget pales in comparison to what (may) happen to the value. After seven years, that new jet may be worth half of new (or less) based on recent history. That $44 million jet may decline by $22 million! The older jet's value will be dependent on the maintenance status, especially the engines. It's possible that after seven years the now 15-year old may still get $2 million or more if the engines are in good shape. Even if you park the 15-year old jet after seven years' use, you are only out $4 to $6 million. 

One area not covered in these numbers is availability and utilization. A aircraft age, they require more maintenance and the extra maintenance burden requires more downtime. When the aircraft is in for maintenance, it is not available for flight. I you need high utilization, that older aircraft will likely make it difficult to maintain a busy flight schedule. But, for the lower utilization owner, such as many high net worth individuals, 200 hours a year is plenty and that 15-year old jet can easily keep up that schedule. 

Can you keep an older jet flying 30-hours a month? Maybe but not every month. I don't have an exact number as there are too many variables, but maintaining consistent 500-600 annual hours will be very difficult in all but newer models. A new aircraft can sustain that use with ease. That seven-year old model can probably sustain that level save for the "once every 8-year" type of heavy maintenance. 

Consider a company like NetJets. They need to minimize downtime. NetJets and the other fractional aircraft providers all tend to operate newer models. They do this to be able to offer the 800-occupied hours per year for their share owners. They cannot consistently get the revenue hours with older aircraft. 

can't ascertain that the new aircraft sales are going to the high utilization operators while the infrequent-fliers are buying the older models. But that can be one reason while the pre-owned aircraft brokers are enjoying a good year. 


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Aircraft Sales | Aviation Technology | David Wyndham

When you "assume"

by David Wyndham 3. February 2017 15:00
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The old saying goes that when you assume something it makes an "ass" out of "u" and "me." That's been demonstrated numerous times. The word assumption does have several definitions. The one in reference above is listed first below. I want to discuss the second definition in relation to the first.

1. a thing that is accepted as true or as certain to happen, without proof

2. the action of taking or beginning to take power or responsibility

The key term to the first definition is "without proof." If we invoke definition two, and take responsibility for defining and offering a level of proof to the assumption, then we have a powerful tool for communication and negotiation. 

In a talk given by James Lara of Greystone Partners at the 2016 NBAA annual meeting, he was discussing the difficulties many of us find in developing a budget. Many times we get into struggles or face the limits of "do more with less." James stated that if you agree on the assumptions to use in developing the budget, the rest becomes straightforward.  With respect to the budget, first agree what the assumptions are. How many trips or hours are needed this year by how many passengers? How many days on the road are needed? What standards do we train to and what are the crew-rest and time-off policies? If fuel cost, salaries, insurance levels, and other costs are mostly a given, then all that remains is the calculation of the total costs to deliver the transportation, safety, and service levels we have just agreed to (assume). If there is a disagreement on the numbers, refer back to the agreed-to assumption that leads to the number. 

This applies to all sorts of communications and relationships. What are the assumptions we are dealing with and are we in agreement? We had this recently at work. We were discussing an issue with one of our software products. When several of us got on a call to discus it, we first had to decide whether it was a problem with the software feature not working correct or whether we didn't communicate to folks what the feature was supposed to do. Once we decided that the issue was the feature didn't do what it was supposed to do, we then set out to reconfigure the feature. And yes, to communicate with our customers better is needed, too. We avoided a lot of wasted time by agreeing what the assumption was in relation to the software before we went down the path to fix it.

This also helps in our relations with other people. With one client, we were tasked to look at their staffing. One area where the assumptions were quite different was in respect to the "free time" when the pilots were on the road. If the aircraft owner went to Barbados for a week, the plane and crew stayed down there as well. On one hand, it sounds good to have a few days in Barbados.  But the pilots are not with family. They are not able to be totally free with their time in case the aircraft owner changes plans. So is this assumed to be work or time off? 

If you are creating a new position or moving someone into a new position, you need to make sure they understand what the job duties and performance criteria are. Helping a client select an aircraft? Do they assume a single-engine turboprop is a safe and cost-effective alternative or are they nervous fliers who want two engines and two pilots at all times? 

Too often we assume the other person has the same assumptions, goals, and reasons for being as we do. When we run into resistance, we can be taken aback to find that is not always true. Checking that your assumptions are in alignment with the other person can avoid many issues and miscommunications. Make it your responsibility to check in with the other person to at least agree on what the baseline considerations are. It's time well spent.

 

 

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Aircraft Sales | David Wyndham | Flight Department



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