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

Used Aircraft Buying Tips

by David Wyndham 1. January 2009 00:00
Share on Facebook

The pre-owned aircraft market has swung dramatically from being a seller driven market last year to a buyer driven market today. If you are thinking of acquiring an aircraft (or downsizing what you have), how do you go about finding the one for you? Here are some tips to help in the process.

 

The first tip, as always, is to do your own research as to what your true requirements are. You need to quantify your requirements, separating must-have from nice-to-have items.

Things to consider in framing your requirements are:

 

·        Range

·        Passenger Loads

·        Baggage Requirements

·        Runway Requirements, especially short runways or high altitude runways

·        Support

·        Costs to operate

·        Compatibility with your existing aircraft, if you have more than one

 

In the most recent reports from pre-owned publications such as Vref and the Aircraft Bluebook Price Digest, prices have dropped about 10% to 12% from the previous quarter. Will prices drop another 5% or 10%?

 

Selling price isn't everything. On a used business jet, the acquisition cost is only about one-third of the total cost to acquire and operate the aircraft for 10 years. If you factor in the residual value, the ownership cost (acquisition less residual value) is down to 10% to 20% while the operating costs command the remainder of the budget. Good quality pre-owned aircraft are always in demand. Long term, you are better off finding the aircraft you want, versus waiting for the price to drop and then finding an aircraft.

 

Factor in upgrades. If the aircraft is a popular model that has been around for a long time, there is likely to be a number of upgrades available. In general, performance enhancements that make the aircraft go faster on the same fuel, or engines that burn less fuel, can be desirable. Another item that adds value may be winglets that can reduce your fuel consumption as well and increase speeds. Adding additional baggage certainly helps if you need the extra storage, and the model you are evaluating is a bit short on room.

 

Look for a used aircraft with many of the upgrades already installed. This will save you time in entering the aircraft into service, and the previous owner will have already absorbed some on the "new features" depreciation.

 

Work with a broker or consultant who knows the aircraft type(s) you are looking for, has knowledge of the market, and has connections. If someone you know has recently bought or sold an aircraft, ask them for their recommendations. A skilled broker will know the process and be able to guide your acquisition team through the myriad of procedures and negotiations that a successful acquisition entails. Many times the best aircraft is not located in your country. Look for someone with experience in importing/exporting aircraft.

 

Once you have a candidate aircraft identified, get a thorough pre-buy inspection on the aircraft.  As a condition of the sale, the aircraft needs to be "opened up."  Make sure the facility performing the inspection is not the one who routinely services that specific serial number aircraft. They should be a disinterested third party with regards to that aircraft.

 

Doing your research in advance, knowing your true requirements, and having an idea of what aircraft meet those requirements is all part of being an educated consumer. There are some great aircraft available at great prices. Prepare yourself and choose wisely and you will end up with an aircraft that will provide many years of good service.

 

Are you going to be acquiring an aircraft in 2009? Whether replacing what you currently have, or adding on, please let us know.

 The pre-owned aircraft market has swung dramatically from being a seller driven market last year to a buyer driven market today. If you are thinking of acquiring an aircraft (or downsizing what you have), how do you go about finding the one for you? Here are some tips to help in the process.

 

The first tip, as always, is to do your own research as to what your true requirements are. You need to quantify your requirements, separating must-have from nice-to-have items.

Things to consider in framing your requirements are:

 

·        Range

·        Passenger Loads

·        Baggage Requirements

·        Runway Requirements, especially short runways or high altitude runways

·        Support

·        Costs to operate

·        Compatibility with your existing aircraft, if you have more than one

 

In the most recent reports from pre-owned publications such as Vref and the Aircraft Bluebook Price Digest, prices have dropped about 10% to 12% from the previous quarter. Will prices drop another 5% or 10%?

 

Selling price isn't everything. On a used business jet, the acquisition cost is only about one-third of the total cost to acquire and operate the aircraft for 10 years. If you factor in the residual value, the ownership cost (acquisition less residual value) is down to 10% to 20% while the operating costs command the remainder of the budget. Good quality pre-owned aircraft are always in demand. Long term, you are better off finding the aircraft you want, versus waiting for the price to drop and then finding an aircraft.

 

Factor in upgrades. If the aircraft is a popular model that has been around for a long time, there is likely to be a number of upgrades available. In general, performance enhancements that make the aircraft go faster on the same fuel, or engines that burn less fuel, can be desirable. Another item that adds value may be winglets that can reduce your fuel consumption as well and increase speeds. Adding additional baggage certainly helps if you need the extra storage, and the model you are evaluating is a bit short on room.

 

Look for a used aircraft with many of the upgrades already installed. This will save you time in entering the aircraft into service, and the previous owner will have already absorbed some on the "new features" depreciation.

 

Work with a broker or consultant who knows the aircraft type(s) you are looking for, has knowledge of the market, and has connections. If someone you know has recently bought or sold an aircraft, ask them for their recommendations. A skilled broker will know the process and be able to guide your acquisition team through the myriad of procedures and negotiations that a successful acquisition entails. Many times the best aircraft is not located in your country. Look for someone with experience in importing/exporting aircraft.

 

Once you have a candidate aircraft identified, get a thorough pre-buy inspection on the aircraft.  As a condition of the sale, the aircraft needs to be "opened up."  Make sure the facility performing the inspection is not the one who routinely services that specific serial number aircraft. They should be a disinterested third party with regards to that aircraft.

 

Doing your research in advance, knowing your true requirements, and having an idea of what aircraft meet those requirements is all part of being an educated consumer. There are some great aircraft available at great prices. Prepare yourself and choose wisely and you will end up with an aircraft that will provide many years of good service.

 

Are you going to be acquiring an aircraft in 2009? Whether replacing what you currently have, or adding on, please let us know.

 



Archive



GlobalAir.com on Twitter