NAFA member, Essex Aviation, shares top considerations when purchasing a new aircraft.
Private aviation offers several benefits, including comfort and convenience. If you or your client is considering private aviation for business or personal use, there are several considerations to take into account as you evaluate your options.
Advice for buyers when purchasing a new aircraft
Follow the 80/20 rule
When shopping for an aircraft it can be tempting to “over buy.” To avoid purchasing an aircraft that delivers more than you need, consider how you will be using the aircraft, a majority of the time. Will it just be you and perhaps a business partner traveling to meetings a couple states away? Or will you be traveling internationally with your entire family monthly? The aircraft you choose should meet your mission requirements roughly 80 percent of the time. So, if you will only be traveling internationally once in a while but will be using your aircraft primarily for short business trips, consider purchasing an aircraft that best supports the business trips and consider utilizing charter or purchasing a fractional share to meet your international travel needs.
Weigh your options: New vs. Pre-Owned
Spend some time determining whether a new or pre-owned aircraft is the right option for you. Depending on your needs, a pre-owned aircraft may be a more affordable choice and will offer you the option of doing various types of refurbishments, upgrades or customization to the aircraft to meet your needs. A new aircraft can be fully designed but the lead time for delivery will be anywhere from 12 – 18 months or longer.
Bring an unbiased aviation advisor on demo flights
Before deciding on an aircraft, often you can do demo flights on different planes to assist with your evaluation of the various options. It can be extremely beneficial to bring a professional and unbiased aviation advisor along with you on the flight to assist with your review of the aircraft and the various options each aircraft type provides. Each demo flight will provide an opportunity for you and your aviation advisor to work together to determine which aircraft type best meets your needs and requirements.
Decide what’s important to you — speed / range / cabin size?
While every aircraft owner would like to say I want it all, the reality is that most aircraft can meet many, but perhaps not every desire of the purchaser. Your aviation advisor can assist you with the evaluation of how each aircraft model can meet your defined requirements. An aviation advisor can also assist you with navigating all of the available information so that you can truly understand each option, including the pros and cons of each and ultimately make as informed a decision as possible.
If you’re financing, start the process early
Since a loan or lease for an aircraft purchase is an involved process, the financial institution you choose to work with will need time to perform their due diligence. So, if you are going to compare rates and request proposals from multiple lenders it’s important to leave yourself time. The initial review and due diligence process to receive a formal proposal typically takes about a month and sometimes longer.
Determine how you will be using the aircraft
If you are primarily using your aircraft for business purposes you may be able to benefit from certain tax benefits. Your aviation advisor can recommend an aviation specific legal and/or tax advisor to work with your internal advisors on properly structuring your aircraft ownership and utilization to maximize the use of any tax benefits.
The new aircraft acquisition process
The process of acquiring a new aircraft typically includes:
The initial evaluation and aircraft identification
There are many choices when it comes to purchasing a newly produced aircraft — starting with the decision to purchase an aircraft that allows you to choose the floorplan and all the specifications and materials or a “white-tail” aircraft, which has already been produced and gives you very limited opportunities to make changes. Your aviation advisor can work with you to evaluate different aircraft options based on your specific needs and desires.
The design phase
Once you have identified an aircraft for purchase you enter the layout and design phase. Your aviation advisor can assist you throughout the series of specification meetings to assist with any questions.
The production phase
With a final and approved design in place the aircraft production process is launched. The production process for a new aircraft can take up to a year or longer depending on several variables. Your aviation advisor can provide regular on-site representation to review and monitor the on-going production process.
Final delivery and acceptance
When your aircraft is ready for final delivery your aviation advisor along with the owner’s existing flight crew will work through the formal delivery and acceptance process with the manufacturer. Once the aircraft has been accepted the final delivery and transfer of title will be completed.
The aircraft acquisition process can get complicated and has several parties involved. Retaining an unbiased aviation advisor to represent you and manage the complete process will provide you with both value and comfort throughout the acquisition process.
If you would like to speak with an experienced aviation advisor who can provide unbiased advice and help you through the aircraft acquisition process, contact Essex Aviation.
Essex Aviation Group, Inc. was founded in 2013 with the primary goal of providing clients with the most current industry knowledge and experience, a vital component in evaluating business and private aviation transportation needs.
Representing clients in a wide range of services, Essex builds client relationships through dedication to trust, integrity and a level of responsiveness not found anywhere else. Services include new or pre-owned aircraft acquisitions, new aircraft completion management, pre-owned aircraft refurbishment and upgrade management, block and ad hoc charter services, and much more.
This article was originally published on Essex Aviation's blog.