aircraft appraisal

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

    EDGEWATER, Md. – 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

    EDGEWATER, Md. – 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.

    ​Antares’ 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
    The Dos and Don’ts of Hiring Aircraft Appraisers see more

    NAFA member, Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services shares what you need to know when hiring an aircraft appraiser.

    The joy of taking flight is one like no other. The business of getting to that take off though can be another matter.

    The purchase or sale of an airplane isn’t exactly an everyday sale. For many buying or selling an aircraft, it’ll be their first time at the rodeo. That’s all the more reason to be prepared when getting into an aircraft transaction.

    Hiring an aircraft appraiser is an important part of the aircraft transaction process. If you’ve never worked with an aircraft appraiser before, it’s essential that you prepare yourself for the experience.

    Read on, and we’ll walk you through all the dos and don’ts of working with aircraft appraisers.

    Understanding Aircraft Appraisal

    If you’re going to get an aircraft appraised, hopefully, you understand why you’re taking such a step. But many potential aircraft owners simply call an appraiser up because they’re told to do so. They don’t take the time to understand the reasons behind the recommendation.

    A proper understanding of the aircraft market is hard to get. A big aircraft company is likely to have a team of appraisers on hand at all times who keep incredibly detailed track of aviation industry trends and costs. Those unlucky enough to not own a multi-million dollar company have to outsource to receive such expertise.

    An aircraft appraiser uses their unique knowledge of the aircraft and market trends to properly estimate the value of a given aircraft. Appraisers are held to a high standard and must be able to back up their estimates with a huge amount of data.

    Their estimates must hold up to scrutiny even in a court of law.

    You might need an appraisal for a variety of reasons. You can use an appraisal to properly find the right selling price for an aircraft or to see if the buying price for another is reasonable.

    There are many other reasons to have aircraft appraised. You might be refinancing a loan, looking at an insurance policy, or just curious about the current value of your aircraft.

    It’s important to understand the purpose of your appraisal. This way, the appraiser you hire can take special care to analyze discuss areas most closely related to those goals.

    Do Find Someone Qualified

    The aircraft appraisal industry is unregulated. That means that anyone out there can technically give a value amount for an aircraft since there are no required standards for training or experience.

    That doesn’t mean you should throw a dart at the wall and hope you hit someone who knows what they’re talking about.

    The Appraisal Standards Board develops and publishes a set of standards on behalf of appraisers. Ensuring that your appraiser lives up the standards of that publication can be important.

    There are two organizations in the aircraft appraisal world that are known for their great reputation. They are the N American Society of Appraisers (ASA) and the International Society of Transport Aircraft Trading (ISTAT) and they both have long histories. VREF has a substantial staff of Senior Accredited Appraisers through both the ASA and ISTAT. It is important to note that hiring an appraiser is hiring his knowledge and experience. If the appraiser is not qualified to appraise the asset then he/she should bring in an appraiser that is qualified, or the report would not be considered USPAP compliant.

    Both organizations provide a wealth of training for their members. A badge of certification from one or both of these organizations can mean a lot in terms of an appraiser’s credibility.

    Regardless of who you go with, you should ensure that the appraiser you hire qualified and experienced when it comes to the kind of aircraft under consideration. Ensure that a field visit is part of their process.

    An appraisal is a tricky business and there are many ways to come to a final number. The last thing you want is someone who doesn’t know what they’re talking about giving you a number that will lead you in the wrong direction.

    Don’t Get Too Subjective

    A proper appraisal of an aircraft will be an objective evaluation of the aircraft. You are filling out a balance sheet, not a sales pitch. As such, don’t be surprised when certain selling points don’t add up to the valuation you might wish for.

    Having the wrong floor plan or missing critical equipment for compliance might be a recipe for lower than anticipated values.

    Just because you have a certain taste for a design or feature, doesn’t mean that aspect will add value to your aircraft. There are certain aspects you might find cool about an aircraft that actually detract from the value.

    Enjoyment is subjective after all, and it’s important to keep this in mind when it comes to appraisal.

    Do Consider Databases Used

    An appraiser will need to pull and use a certain market database for their analysis. Publications are consulted frequently by aircraft appraisers, but not all these publications paint the same story about the state of the market or industry.

    VREF Aircraft Value Reference & Appraisal Services, delivers aircraft and engine data through online subscription services and published quarterly digests. VREF provides valuations, appraisals and advisory services to a world-wide client base of aviation professionals including, banks, financial institutions, lessors, manufacturers, aircraft operators and suppliers. VREF Aircraft Value Reference & Appraisal Services plays a key role in informing decisions and identifying opportunities within the aviation industry. VREF is also the official Valuation Guide and Appraisal company for the AOPA.

    The database used for reference can have a huge impact on the final estimated value of an aircraft. As such it’s important that you, as the hiring party, stay well informed.

    The Dos and Don'ts Of Aircraft Appraisers

    Aircraft appraisal can be a tricky business. If it’s your first time working through an aircraft transaction, it can take a minute to get used to working with aircraft appraisers. But with the above tips, you’ll be well on your way to a proper valuation.

    Need more info about aircraft ownership? Feel free to contact us with any questions.

    This article was originally published by VREF Aircraft Value Reference & Appraisal Service on April 18, 2019.

  • Tracey Cheek posted an article
    Why You Should Involve a Professional Aircraft Appraiser During Purchase see more

    NAFA member, Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services, shares his tips on using a professional aircraft appraiser when making your next aircraft purchase.

    Depending on the type, an aircraft can cost as much as $21,000,000.

    That’s a heck a lot of money!

    So why would you want to risk all that for an aircraft with hidden damages?

    Getting an aircraft appraiser is the best way to ensure that you get value for your money. You get to avoid overpaying for insurance and other related taxes. The appraiser will also help you better understand the type of aircraft you want to buy and what you can expect in terms of performance.

    That aside, here are more reasons why you should seek an appraiser’s professional help during purchase.

    1. Appraisers Have a Better Understanding of the Market

    Appraisers are well-versed with the aircraft market. They’ll analyze the market and give comprehensive findings on the actual market value of an aircraft. This is something you’ll hardly find in most publications or websites.

    Additionally, an appraisal report can provide a basis for negotiating the price. It’ll vividly highlight the issues to be addressed before making any transaction.

    2. Aircraft Appraisers Are Experts in What They Do

    Determining an aircraft value involves more than plunging the model, make, and manufacture year of an aircraft into a publication or web tool.

    Before an appraiser can attain the accredited member designation, they’ll need to have a college degree or its equivalent and at least two years’ experience.

    Appraisers with more than five years of experience qualify for an accredited senior appraiser designation. With such experience, you can expect better appraisals for your big investment.

    3. Aircraft Appraisers are Certified

    Before appraisers are able to give any report to the public, they should have undergone special training. They also have to meet the minimum requirement for certification set out by the ASA.

    This organization is one of the oldest and largest global institutions that focuses on documentation and evaluation of aviation aircrafts including helicopters, business jets, and turboprops.

    Members of this association work on a strict code of conduct to ensure that they act in an unbiased manner. These requirements are unique and vital in the appraisal industry. They make the difference between an accurate valuation and an estimate.

    What’s more, members who receive training as “buyer’s agents” help buyers with the selection of aircrafts that are in line with their requirements and budget. While at it, they maintain impartiality in their analysis. This isn’t the case with most traditional dealer/brokerage agreements.

    Choosing an Aircraft Appraiser: Final Thoughts

    Considering the benefits above, an aircraft appraiser will certainly help you make a good buying decision on your huge investment. Without an appraiser, you may spend money on a faulty aircraft, which is not only a loss of money but also a safety hazard.

    If you’re looking for professional appraisal services, look no further than VREF. We offer USPAP-complaint aircraft appraisals and full inspections to ensure you get value for your money.

    This article was originally published by VREF Aircraft Value Reference on May 13, 2019.

  • Tracey Cheek posted an article
    What Is the Income Approach to Aircraft Appraisal? see more

    NAFA member Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services, writes about the income approach method when determining the value of an aircraft.

    It can be difficult to find out the process that goes into learning the value of an aircraft, and that leaves many aircraft owners confused as to what steps they should take, especially when they need to know the income approach.

    Luckily, the actual process isn’t very challenging at all to do. In fact, we’ve managed to break it down for you and place it into this article for you to learn the proper steps for the appraisal. Keep reading to learn more.

    Learn the Income Approach by Knowing Your Definitions

    For every piece of personal property, there is an official way of determining its appraisal or value. The ASA Personal Property Committee is the one that determines the value of personal aircraft.

    There are three ways to determine aircraft value are known as definitions. These are the sales comparison approach, the cost approach, and the income approach.

    We will be focusing on the income approach definition in this article.

    Determining Aircraft Appraisal Through Income

    The income approach method is unique in comparison to the other two definitions.

    Whereas the sales comparison approach and the cost approach determine value through the property price of a similar property or through the cost of the materials it takes to build the property, income appraisal does things differently.

    By appraisal through income, one doesn’t determine value through the property itself. Instead, they look at the anticipated monetary benefits of the property.

    Let’s break it down. Every piece of property comes with a certain amount of value attached to it. In this manner, each of these properties has the ability to bring in a certain amount of income based off of its current value.

    There a number of things that factor under these anticipated monetary benefits, such as the current market price, the expected increase or decrease in value over the years, and the stream of income.

    If we were to summarize this appraisal method, it’s basically looking into the future to determine the value of the property and how much money it could bring to the owner using mathematical and statistical calculations.

    Though it’s an indirect way of gauging the value of your aircraft, this method of appraisal still serves as one of the most popular ways to find property value.

    Get the Right Appraisal

    In order to get your income approach appraisal done right, you need to go to the people who have the knowledge and experience to do it right the first time. You won’t have to look any further than us.

    At VREF, we take our valuations seriously. We’ve helped to appraise thousands of personal aircraft and know everything there is to know about determining the value of each and every aircraft.

    Make sure to get one of our valuation guides so you can determine the price of your aircraft. We look forward to helping you with your appraisal!

    This article was originaly published by VREF on May 17, 2019.

  • Tracey Cheek posted an article
    Zilberbrand and Dufour Expand VREF Staff and Specialties see more

    NAFA member Jason Zilberbrand, President and CTO of VREF Aircraft Value Reference & Appraisal Services, announces expanding staff and specialties.

    VREF Aircraft Value Reference, the leading provider of aircraft valuations for the aviation industry expands staff and services.

    CHICAGO, IL, USA, June 3, 2019 /EINPresswire.com/ -- VREF Aircraft Value Reference, Appraisal & Litigation Consulting Services the leading provider of aircraft valuations for the aviation industry, continues its 25th Anniversary celebration by adding more staff and specialties to its management team to meet their expanding business requirements.

    VREF has been expanding its specialty expertise’s, which now includes aviation cyber security, airport security, avionics, avionics security, and ground equipment appraisal and Litigation consulting.

    “Offering expertise, consulting and appraisal work related to cyber security and avionics is not something we take lightly. It is a highly specialized field that requires years if not decades of training, certifications and experience to produce high quality and awe-inspiring results”, said Jason Zilberbrand President of VREF. 

    “VREF is the only Business Aviation and for that matter General Aviation firm that offers the breadth of expertise we do with a staff including lawyers, federal agents, teaching professors and A&P technicians and is the most knowledgeable appraisal team I have ever worked with,” said Ken Dufour CEO.

    Eric Pupye, Esq. joined VREF in March to oversee Cyber Security, Airport Security and Avionics Security Expert Witness and Litigation Consulting. Eric is an attorney and Federal Agent with The Department of Homeland Security and he has Top Secret Security Clearance. In addition to being an attorney, Eric is a certified Protection Professional (CPP) and a Professional Certified Investigator (PCI). Prior to joining VREF, Eric spent a decade in the U.S. Air Force working with the National Security Agency, Defense Intelligence Agency, and the Defense Threat Reaction Agency. Eric is a combat veteran and he was awarded the Bronze Star.

    “Eric brings a new skill set and specialties to the firm, we are not only honored to be working with him, but it also establishes VREF as the go-to company for all aviation related litigation support matters,” said Jason Zilberbrand, VREF President and CTO. Mr. Zilberbrand continued, “We are confident that Eric’s talents will be a huge part of our continued growth as we start taking on more sophisticated projects.”

    Additionally, VREF opened its third International Office and welcomed Neil Schiller, ASA of Sydney Australia to the team. This is the third International office opened in 2019 including Switzerland and Austria. Neil will be overseeing appraisal and expert witness work in the Oceania region and he has over 30 years of extensive experience in appraising aviation related assets including aircraft, helicopters, ground equipment and airport equipment. Prior to joining VREF, Neil was in charge of the GECC portfolio of Business aircraft for Australia and New Zealand.

    “Eric Pupye and Neil Schiller are welcome additions to VREF. The team we have assembled represents the best talent available in the industry and our commitment to the industry to drive transparency and ethics. We plan on opening additional offices to assist the existing client base,” said Ken Dufour, ASA and CEO of VREF.  

    About VREF

    VREF Aircraft Value Reference, Appraisal & Litigation Consulting Services, was founded in 1994 and is headquartered in Des Moines, Iowa with offices in Chicago, Rockford, Los Angeles, Boise, Daytona Beach, Austria, Switzerland, China and Australia.

    VREF delivers aircraft and engine data through online subscription services (SaaS) and published quarterly digests.

    VREF provides valuations, appraisals and litigation consulting services to a world-wide client base of aviation professionals including, law firms, banks, financial institutions, leasing companies, manufacturers, aircraft owners, aircraft operators and suppliers. VREF Aircraft Value Reference, Appraisal & Litigation Consulting Services plays a key role in advising decision makers within the aviation industry. 

    VREF is the official Valuation Guide and Appraisal company for the AOPA.

    For further enquiries or interviews please contact the VREF team.

    P: 844-303-VREF
    E: info@vref.com

    Jason Zilberbrand
    VREF
    3129610934
    email us here

    This press release was originally published by EINPresswire on June 3, 2019.


     

  • 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.