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What You Should Know About eBay Aircraft Sales

by GlobalAir.com 12. February 2018 14:06
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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

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The Aircraft Acquisition Plan - Sources Of Information

by David Wyndham 12. February 2018 11:00
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In the two previous issues, I discussed that the foundation of the Aircraft Acquisition Plan is to understand the aviation mission. That understanding leads to identifying the key missions of the aviation function. Those most important missions are what allow you to derive a set of objective evaluation parameters. Those mission-specific parameters can include payload, passenger seats, range, runway performance etc.

Given a set of parameters, you will need to find out which aircraft are capable of meeting those parameters. For example, if you are an Emergency Medical Services (EMS) operator, you may need to carry 2 liter patients plus two attendants. You may also need to lift that load from a 3,000 foot elevation on an 86F (30C) day. You know the capabilities of your current EMS helicopter. Where do you get the information about possible replacement helicopters? What about performance on specific trips such as London City airport to Cairo, Egypt? What about the maximum payload you can depart Eagle, Colorado and make Charlotte, North Carolina non-stop? There is generally available data and specific data calculations. 

There are three generally available categories of published sources of information and data. Trade publications, off-the-shelf databases and the manufacturer published data.

Trade Publications. There are a number of excellent publications that publish surveys, list performance reviews/pilot reports, and have new aircraft pricing. These magazines are readily available via subscription. In addition to hard copy, many have electronic copies and some maintain past issues on their website. The cost to receive them is nominal. This is a good first step to get general information. The ones with pilot reports may have more technical information versus general product reviews. These articles may not answer your detailed questions or cover all the aircraft models you are interested in.

Published Databases. There are a number of databases published in the US that can provide a great deal of useful information. They cover four areas: acquisition costs, operating costs, performance and specifications, and specialized data. While trade magazines usually do a good lob of listing new aircraft process, they don't have a lot of information on pre-owned process. Information that is published on acquisition costs relies on sellers or buyers reporting their transactions to the publisher. Not every transaction is reported and there is a time lag in the reporting of a transaction and the ability of a publisher to analyze and publish their data. When markets are changing rapidly, this data has less value than in a stable used market.

Operating cost databases focus on the day-to-day costs of owning and operating aircraft, including taxes and fixed costs such as insurance.  Operating cost databases also have limitations. No two operators operate their aircraft in the exact same way.  Some operators do much of the routine maintenance in-house while others use a service center. Unscheduled maintenance is just that, unscheduled. There is no way to predict unscheduled maintenance save for using generalities and defining assumptions. Guaranteed hourly maintenance programs may help, but each manufacturer or program seller will use different assumptions and many allow for some variability in charging based on utilization. As they say with automobiles, “your mileage may vary.” These databases can be a valuable tools for comparing relative costs, but aircraft costing is not an exact science!

Performance and specification databases are useful provided that the person using them is knowledgeable about aircraft performance.  They go into more detail than many magazine articles and they tend to have standardized formats for each category of aircraft. These generally come in software versions. Unless you buy the flight manuals or subscribe to a database that offers that level of detail, the ability to change the data for your exact mission can be limited. Again, as a relative comparison tool, they can be invaluable. 

Costs of the above databases vary from several hundred dollars to over $1,000 for complete sets. They tend to offer a fair amount of detail, are impartial, and given the time involved in gathering each bit of information on your own, a very worthwhile investment. Our company has published a number of these types of databases for over 30 years.

Other specialized databases do exist. They can be for things such as charter listings, aircraft for sale listings, airport databases, and en route winds and temperature statistics. Depending on your mission, they still may not answer the very specific question that you may have.

Manufacturer's Data. The information from the aircraft manufacturer can range from the sales brochures' optimistic, best case information, to very specific performance analyses. Be cautious reading generalized sales information as they may or may not conform to standardized criteria. They may also be out of date. The flight manuals are the best source for specific calculations. Buying them for one-off comparisons can be quite expensive, especially when researching a number of different aircraft models. 

Detailed performance questions can be easily answered by the manufacturer. Contacting the manufacturer does inform them of your interest and usually generates sales calls and perhaps a visit form your local aircraft sales person.  If you wish to maintain your anonymity, you may wish to order a technical manual through the product support group. 

What are the other sources? Consultants can be paid to do all or part of the work in the Aircraft Acquisition Plan. When we do a study for someone, we work closely with both the aviation professionals and well as the end user to make sure all the right questions are asked, and answered. Other operators can be a wealth of "inside" information, as are maintenance facilities and training companies. When asking questions, be specific. Ask a general question, get a general answer. List price is not necessarily selling price, nor does a flat-rate cost for an inspection tell you what to allow for unscheduled and “over and above” maintenance.  

When gathering data, keep in mind the following:

What is the reliability of the source?

What assumptions went into the data?

How would specific information apply to your situation?

In general, starting with the publicly available data allows you to develop a short-list of candidate aircraft. If you want an aircraft with 2,800 nautical mile (NM) range, an aircraft with 2,300 NM is probably not going to be your top choice. Next time I’ll get into the analysis of the numbers.


 

 

 

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Aircraft Sales | Aviation Technology | David Wyndham | Flight Department

Key Missions & Evaluation Parameters

by David Wyndham 4. January 2018 13:05
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In the two previous issues, I introduced the Aircraft Acquisition Plan and your Acquisition Team. To be effective, your acquisition plan should consist 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. This issue, I’ll focus on the first two items. 

“Mission drives requirements”

The foundation of the plan is to understand the mission assigned to the aviation function. Where does the aircraft add value to your company or owner? Yes, it makes better use of time. To what end? What is the importance of that time, and more over, the value of that time? Connecting the corporate goals and aspirations with the use of the aircraft enables you to define (and defend) the use of the aircraft as a valued business tool. Identify the most important mission for the aircraft as it relates to the achieving the corporations goals and vision. That is the mission which enables the aviation department to select the right aircraft by defining the parameters the aircraft must meet in order to help the corporation succeed. 

In defining the mission, we get to the importance of quantifying the mission. While a decision maker may select an aircraft from emotion, we need to make sure that they have the information needed to quantify their decision.  We need to quantify the mission, the aircraft requirements, and the costs. The decision maker can allow emotions in the process, as advisors, we cannot. Quantify every requirement to the greatest extent possible. 

Be proactive. If today’s mission is likely to change, focus your planning on what will come. While during times of rapid change, it is difficult to forecast, do it anyway. Ask the major users and decision makers for their inputs. Try to get a “probable” and a “best case” scenario. Or, if things are looking poorly, a “worst case” scenario.

Evaluation Parameters (Quantify!)

Evaluation parameters include cabin size, door size, cargo capacity, range, payload, etc. A key mission such as West Cost of the US to Asia could allow for a stop en route. If you can make it to Hawaii, every other over water leg can be made with less range.  The distance from the West Coast of the US to Hawaii is about 2,300 nautical miles (NM). Allowing for headwinds, you need at least 2,500 NM range to make it most of the time and 3,000 NM range to make it under almost any conditions. That Asia mission may require non-stop capability, but be aware of the available options.

Key missions allows you to define with the evaluation parameters needed to evaluate the possible aircraft. Identify aircraft that meet all the requirements and those that fall short in one or more areas. Include your current aircraft in this list as a baseline for judging other aircraft.  Once you have your aircraft criteria, it is usually good to list those in terms of “required” and “desired.” Required criteria are those which you must have to perform the key missions. Desired criteria are nice to have criteria that enhance the ability to perform the mission, but aren’t crucial to its success. 

If you don’t do your homework, you either end up with too much aircraft, or worse, end up with an aircraft that fails to do what was required. There is nothing worse than explaining to the boss why you can’t do the trip that was justification for the aircraft in the first place. Do this work up front and the rest of the analysis just falls into place. You’ll see. 

 

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The "Acquisition" Team

by David Wyndham 11. December 2017 13:37
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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). 


 

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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
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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.

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