aircraft appraisal

  • Tracey Cheek posted an article
    Nardone and Company, Inc. Joins National Aircraft Finance Association see more

    FORT LAUDERDALE, Fla. – Dec. 4, 2018 – National Aircraft Finance Association (NAFA) is pleased to announce that Nardone and Company, Inc. has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Nardone to our association,” said Ford von Weise, President of NAFA.

    Nardone & Company, Inc., is a Veteran owned corporation in their 25th year of business. Experience within Nardone & Company exceeds 40 years in the salvage industry and since their establishment on July 8, 1993, they have been dedicated business partners, producing the highest salvage return on the sale of damaged goods - quickly and cost effectively. The company’s Aviation Technical Services focuses solely on aircraft-related salvage, sales/recovery, current market values, inventory loss, and damage evaluations.

    The company’s President, George Nardone, Jr. is a member of the National Aircraft Appraisers Association (NAAA).  Mr. Nardone has Airline Transport Pilot Ratings and over 40 years of aviation experience. Their staff of highly experienced and dedicated professionals, with senior certified aircraft and USPAP compliant appraisers, pride themselves on immediate response and rapid reporting with complete documentation on all assignments. 

    Aircraft appraisals by Nardone and Company’s professionals provide the buyer or seller with onsite inspections, valuation utilizing current market conditions and their sophisticated NAAA appraisal that measures every aspect of the aircraft's value at a reasonable cost. They can also manage pre-purchase inspection and provide consulting services to help match clients with the appropriate aircraft to meet their specific requirements. 

    Much like NAFA, Nardone and Companyupholds the highest standards in aircraft appraisal throughout the aviation industry as dedicated partners with their clients. “We provide credibility and trust every time,” said George Nardone, President and CEO. Nardone and NAFA are committed to fostering the education and experience necessary to develop the aviation industry as a whole.

    For more information about Nardone and Company, Inc., visit www.nardoneandcompany.com

    About NAFA:  

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

  • Tracey Cheek posted an article
    Antares Jet Appraisals Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. – Oct. 16, 2018 - National Aircraft Finance Association (NAFA) is pleased to announce that Antares Jet Appraisals has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Antares to our association,” said Ford von Weise, President of NAFA.

    Antares Jet Appraisals provides aircraft appraisal services for all types of aircraft, specializing in business jet and turboprop appraisals. With a team of accredited senior appraisers from the American Society of Appraisers, they comply with the Uniform Standards of Professional Appraisal Practice (USPAP), putting their more than 40 years of combined experience in the aviation industry to work for banks and financial institutions, insurance companies, and aircraft owners among others.

    ‚ÄčAntares’ appraisers are certified by the American Society of Appraisers(ASA), comply with USPAP, and have access to recognized aircraft databases in the industry like Vref, Amstat, Jetnet, etc. The company performs full appraisals and inspections, desktop appraisals, future value estimations, orderly liquidation values, marketability analysis of aircraft, aircraft maintenance cost analysis, and personalized market studies.

    Much like NAFA, Antares Jet Appraisals promotes quality aircraft appraisal solutions, fostering continuity and safety throughout the aviation industry. Antares and NAFA are committed to the education necessary to maintain the highest of standards inaviation appraisals.

    For more information about Antares Jet Appraisals, visit https://www.antaresjetappraisals.com/.

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

     

  • Tracey Cheek posted an article
    Scaling the Heights see more

    NAFA member, Brian Proctor, President and CEO of Mente Group, reflects on a record 2018.  

    Q: It seems that 2018 is turning out to be a year when a lot of aircraft get bought and sold, how has it been for you and Mente Group? 

    BP: We are having a record year, both as far as buying and selling aircraft are concerned. We are already up on the whole year 2017, and we still have the fourth quarter in front of us. At this rate, and with the transactions already in the pipeline for the fourth quarter, I would expect 2018 to be around 40 percent better than last year, for us.  

    At the same time, our appraisals business is up around 200 percent on last year. We started this business two years ago and it is growing rapidly. That is a good sign because it means that the banks and finance companies are seeing a lot of demand from people who want to finance aircraft transactions. 

    Q: Is it mostly the banks and insurance companies that you are doing appraisal work for? And is that mostly for pre-owned?

    BP: It is the banks and leasing houses that are keeping us busy. We do a lot of new aircraft appraisals as well. You have to remember that every negotiation with an OEM over a new aircraft purchase is different, and every aircraft is optioned differently. So, lenders want to make sure that what they are financing has the value that they have been led to believe it has. 

    Much of what we do is document driven rather than going out on site and actually examining the aircraft. The banks use our appraisal to work out the loan-to-value structure for the deal that they feel comfortable with.

    We started the appraisal business around two years ago and we have made significant investments in the business since then. We have added another experienced aircraft appraiser to the team, plus a data scientist who manages our online database. We have put a lot of money into this and it allows people to go online and manage their portfolio of aircraft. Last year our database quoted 700 aircraft transaction datapoints and it is up almost as much again so far this year. 

    Q: What are you using to drive data in this database?

    BP: We have a number of sources for the data, but most of it is driven organically by our own researchers and sales folk, plus the business development people. We qualify the database by the quality of the data source and we prioritize our own data, and that of our contacts, since we know this data is going to be good. 

    Q: How important to you is the appraisal business?

    BP: It has been very good for us and we are working at extending the reputation and reach of our appraisal service in the market. What is really good for us is that it touches a different clientele and is also more stable in terms of cash flow, so it is a very useful additional revenue stream for us. 

    Q: How much do you think Trump’s 100 percent expensing of new and pre-owned aircraft is driving the current deal flow?

    BP: It has been very significant. Remembering back, the Bill was signed off on the 18th of December 2017 and by the end of the year, or inside of two weeks, we had two clients come forward and buy aircraft. Moreover, those transactions were not even on our radar on December 18th. So that shows the kind of catalyst the Bill was for deals. 

    Right now, we have a number of clients working to get closure on deals before the end of calendar year 2018 so that they can claim the 100 percent depreciation against the current year’s profits. It is a huge incentive.

    However, we have two headwinds in the market right now. The first is that it has become increasingly more difficult to find good quality aircraft. The second is that when you do get them it is getting very hard to get them into an MRO to get pre-appraisal delivery work done on the aircraft. The MROs are all struggling with maximum capacity. Where it used to be possible to phone them up and get a plane booked within a week, now you are lucky if they can fit the job in next month or the month after. 

    Q: Playing Devil’s advocate for a moment, do you worry that sales are perhaps bunching up and you could be looking at a long at spell a bit further down the track as far as transactions are concerned?

    BP: What I say is bring on the sales. I never worry about sales bunching up. But there is certainly price pressure out there now. I have seen several clients who were looking for pre-owned aircraft, shift to considering new aircraft because the price differential between the two is no longer as attractive as it was.

    Clearly, it is becoming a very good time to be a seller, though finding a good replacement aircraft when their existing aircraft goes away, is likely to be a problem. We are not back yet to the crazy days of 2007, but I would liken the current period to what we saw in, say, 2004 or 2005. 

    Q: What are you seeing with respect to the slimming down of pre-owned inventory?

    BP: We have done six G550 transactions in the last two months. When we started the search for suitable G550s for a particular client back in February this year, there were about 30 of them on the market. We began to whittle the choices down and the numbers kept shrinking as we were evaluating them. We ended up with just three aircraft that we could show the 
    client. The point is that you cannot even say that there is, say, 3.2% of the fleet of a particular model available in the pre-owned market. If you have a discerning client  with  reasonable  constraints  on  what  they  are looking for, you could end up with just two or three aircraft to pick from, even if there was 10 percent of the fleet available. 

    Q: An impossible question, admittedly, but how long do you think the present upturn can last for?

    BP: North America is booming, and we are starting to see a lot more interest in aircraft acquisitions out of Western and Eastern Europe and Africa. The Middle East is still quiet and has yet to turn up. So, I would say there is at least a year of strong demand out there that has yet to make its way to the market. 

    Another point is that if you see the US dollar turning down, that will really stimulate demand for aircraft from Europe and Asia, since it will be tantamount to a big price discount on US manufactured aircraft.

    This article was originally published in Business Aviation Magazine, August 2018, p. 26. 

  • Tracey Cheek posted an article
    Appraising the Truth - Why Business Aviation Needs Accurate Aircraft Valuations and Appraisals see more

    NAFA member, Jason Zilberbrand, President of Vref, writes about why business aviation needs accurate aircraft valuations and appraisals. 

    Q: How did Vref get started down the road of providing prices and supporting data on aircraft?

    A:  The Vref story began roughly 25 years ago. The first Vref guide was published in January 1994. Vref was first published by Fletcher Aldredge, a former analyst at Aircraft Blue Book. He was unhappy with how information and data were being published, collected and updated so he started his own Guide. Fletcher created a platform that was ahead of its time and has the most trusted data in the industry. Vref is used by every bank, financial 
    institution, broker and aviation professional as one of the trusted resources they can depend on for accurate information on aircraft. By providing up to date real time values for helicopters, all fixed wing aircraft, and now engines and commercial narrow bodies; Vref is the predominant force in aircraft value data. 

    Q: So how did you and Ken Dufour, the CEO of Vref, get involved? 

    A: Ken and I were brought in to oversee the day-to-day business operations,  run  the  company  and  implement  new  services.  Ken and I have very different skill sets and backgrounds. I have spent the better part of my life in aviation, having come into the business when I  was  still in  college,  when  my  father  started  Jet  Support Services Inc. (JSSI), which we sold in 2008. For the last 15 years I ran an international aircraft dealership and brokerage. 
    My time at JSSI was invaluable in preparing me for what I now do at Vref, in that we were myopically focused on maintenance events and costs, and I was introduced to an amazingly diverse network of people in the MRO shops, the OEM community and in the aircraft financing and banking sectors.  Buying and selling aircraft further honed my skills, and by applying my maintenance and engine knowledge base to brokerage it created opportunities 
    that I might not have ever been able to identify. However, when the crash hit on 29 September 2008, a day I will remember forever since it was also the day my eldest daughter was born, we were holding some $320 million in aircraft inventory, in the form of 23 aircraft that we suddenly had no buyers for those were harsh times for many in the sector as deals dried up all over the place. We were able to reach fair solutions to those positions and moved on. However, what happened over the next few years as companies started shedding jobs was that large numbers of people decided to reinvent themselves as aircraft brokers. Simply by selling one aircraft a year they found they were doubling whatever they had been paid in their old jobs. What was once a career that you were lucky enough to get into or in most cases born into, was now nothing more then a cell phone, website and access to classifieds.  In that environment, being a broker no longer held out much interest for me. I was much more interested in the challenge of how one could go about gathering the data required to put a realistic and accurate value on particular aircraft. I was spending more and more of my time trying to determine where forecasts of values were going and appraising aircraft. It was apparent when I started doing more aircraft appraisals that Vref would be the perfect company for me to grow my career.  

    Q: I believe Ken came into it from an entirely different route?

    A: Absolutely. Ken is without question the foremost expert appraiser of aircraft in the US. He is a Accredited Senior Appraiser with the ASA and he has appeared as an expert witness in over fifty cases and has helped his side to win them all. I should mention that he has been mentoring me as far as becoming an expert witness is concerned, and I have now appeared as an expert witness in two cases, both of which we won. We now offer expert witness services as part of the Vref portfolio of services, be it via actual court appearances and testimony, or via deposition. 

    Q: Can you give us something of a flavour of the kinds of cases involving business aviation aircraft that call for expert witness testimony?

    A: A very common scenario is where you are acting either for the owner of an aircraft that has sustained damage, or for the insurance company or OEM. What you are trying to determine is what the value of the undamaged aircraft would have been at that point in time, and what its value is now that the damage has been sustained. It is a hugely complicated calculation, with a lot of moving parts. Ken is an absolute master at producing an evidence-based appraisal and his work has never been successfully challenged. That is part of the skill we bring to Vref.

    Click here to read the full article.

    This article was originally published in Business Aviation Magazine, Summer 2018, p. 78. 

  • Tracey Cheek posted an article
    Why an On-Site Jet Appraisal Is So Important - The Certified Appraisal versus a Desktop Valuation see more

    NAFA member, Jeremy Cox, Vice President of JetBrokers, discusses the importance of on-site jet appraisals and certified appraisals versus desktop valuations.

    There are real dangers in cutting corners on an aircraft appraisal.  Jeremy Cox draws on some of his real-life appraisal experiences to highlight the value of getting the job done properly.

    There are multiple reasons why an aircraft owner might need to know what his aircraft is worth on a specific date, including:  Making the decision to sell; wishing to put the aircraft up as collateral against a loan; divorce settlement; an estate sale; tax settlement; insurance claim; or charitable donation.

    Except for the situation of making a ‘sales decision’, all the other events listed require that the selected appraiser provide the owner with a certified appraisal instead of merely a market valuation.

    The Essence of a Certified Appraisal

    When an aircraft is being donated, a certified appraisal submitted to the US Internal Revenue Service (IRS) must meet specific requirements for it to be accepted. IRS Publication No. 561 states:

    “The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser’s demonstrated knowledge of the donated property. An appraisal must give all the facts on which to base an intelligent judgement of the value of the property.

    “The appraisal will not be given much weight if:

    • All the factors that apply are not considered;
    • The opinion is not supported with facts, such as purchase price and comparable sales; or
    • The opinion is not consistent with known facts.

    “The appraiser’s opinion is never more valid than the facts on which it is based; without these facts, it is simply a guess.  “The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service.”

    To prove ‘demonstrated knowledge’ of the aircraft that is the subject of the appraisal, the appraiser must physically see and evaluate the aircraft and all its logbooks, on-site and in person. In the unfortunate instance where the subject aircraft will be written-off by an insurance company due to the total-loss of the aircraft, it is still required that all logbooks are reviewed before an appraisal report can be written.

    The National Aircraft Appraisers Association (NAAA) asserts that “The walk around examination, and inventory of the aircraft, followed by the thorough study of the logbooks, and records, contribute approximately 85-90% of the data in our written report. The other 10-15% of our work is outside research.”

    A sales specification that has updated hours, landings and equipment hand scrawled on it, along with a handful of images, does not come close to being a suitable substitute for an on-site inspection. It is impossible to apply a rating to the condition of the paint and interior by only examining an on- screen, or printed image, in-place of seeing the actual aircraft in person.

    Why Have an Inspection?

    Rarely will a sales specification ever mention the existence of any damage history, or accurately assess current maintenance and inspection status. The only sure way to determine the overall condition of an aircraft, and ultimately its value, is by inspection. The logbooks are a critical part of the determination process.

    An excellent example of why an on-site inspection and log book audit is so vital to accurately report on an aircraft happened in an audit of a Dassault Falcon 900B I was involved with recently. The Falcon 900B was in the late stages of a work scope at a major MRO, and I was provided with a sales specification that was produced by an aircraft broker who had sold this aircraft a little over a year before the date of my audit.

    I also downloaded a CAMP Status Report after being granted ‘read-only’ access through my CAMP-Online account. If I had utilized this supplied specification and CAMP Report instead of creating my own, I would have been very wrong on multiple equipment and inspection status issues.

    For example, Collins TDR-94 Transponders had reportedly been installed, when in reality Honeywell MST-67 Transponders were the actual units onboard (installed over 10 years before). Furthermore, the ‘C Check’ date reported was later than the actual sign-off and release for return to service (another potentially very costly error). And while doing the audit, I even found two engine logbooks among the archives that did not belong to the subject aircraft...and never did at any time in its history...

    This was not an isolated incident. Other examples over the years have included:

    • A Learjet ‘wide’ cargo door (reported) versus the narrower executive door (actual);
    • Citation CJ2 ‘3-tube EFIS’ (reported) versus ‘2- tube’ (actual);
    • Falcon 20-5 thrust reversers (reported) versus ‘none’ (actual);
    • Gulfstream GV crew-rest compartment (reported) versus ‘none’ (actual);
    • Global Express with a ‘heads-up guidance system’ (reported) versus ‘provisions-only’, i.e. an empty box above the #1 pilots’ head (actual).

    I could go on, and on with tales of aircraft that were reported as ‘perfect’, only to find otherwise in the aircraft’s logs.

    The bottom-line: if the certified appraisal that you paid for and used to satisfy an official requirement was created without an on-site inspection and audit by an appraiser, even with disclaimers, it is questionable and probably unreliable.

    This article was originally published in the January 2017 issue of AvBuyer Magazine, p. 137.