business jet

  • Tracey Cheek posted an article
    What Is The Typical Down Payment Percentage on a Jet? see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, answers your questions about jet down payments.

    Q: What is the typical down payment percentage on a jet? Possibly a CJ3+?

    A: How the aircraft is being used will be a primary factor in determining the required down payment. For Part 91 personal/business use lenders typically will finance up to 85% of the purchase price or aircraft value, whichever is less. Part 135 charter or other commercial usage generally requires larger down payments. 30% down is typical for this type of usage. How the loan is structured can also play a factor in the down payment. AOPA Aviation Finance can offer solutions such as interest only, asset based, or longer fixed term structures. Larger down payments are typically required for these types of loan structures. Please give us a call, we’d be happy to discuss your situation in further detail.

    This article was originally published by AOPA Aviation Finance Company on September 18, 2019.


  • Tracey Cheek posted an article
    Why 'Pre-Owned' Private Jets Can Be Surprisingly New see more

    NAFA member, Chad Anderson, President of Jetcraft, discusses why you should buy a pre-owned aircraft and where to find them.

    Pre-owned, vintage, used…from sports cars to designer clothes and beyond, these words don’t usually indicate ‘new’.

    But, according to Jetcraft, the world’s leading aircraft sales specialist, pre-owned private jets don’t have to be ‘old’ – in fact, the savviest buyers are now picking up these airplanes after less than a year of use.

    So how do buyers find an almost-new aircraft? And what’s bringing these jets to the market in the first place? We asked Chad Anderson, president of Jetcraft.

    Why should I buy a pre-owned jet?

    Pre-owned aircraft allow buyers to find the long-range or large-cabin model they need at the best possible price. Private jets are valuable but expensive assets, so it’s important you invest in an aircraft that suits your needs and will retain value. With the sophistication of upgrades and renovations available today, pre-owned planes are every bit as attractive as new ones.

    Why are these almost-new aircraft available?

    As many businesses ‘go global’, and more and more private jet owners fly greater distances for work or leisure, demand is growing for spacious, fast jets that can span half the world without stopping. The top jet manufacturers are responding to this need by releasing new large-cabin aircraft. This influx is driving some buyers to sell their airplane after only one or two years of ownership, so they can upgrade to an even newer model. 

    Indeed, this summer Jetcraft sold the world’s first pre-owned Gulfstream G500 – an aircraft that only came onto the market in 2018. The speed of this sale shows how demand for almost-new long-range models is at an unprecedented high.

    How do I find a pre-owned jet to buy?

    There’s a lot of competition for young, pre-owned jets. In fact, our recent market forecast anticipates four times more pre-owned transactions a year than new deliveries by 2023 and we’re seeing many aircraft that are correctly priced, marketed and positioned are sold before they even hit the market. If you’re planning to purchase a pre-owned aircraft, it’s important to work with a consultant you trust and who has a pulse on the market and the latest available inventory. 

    Which jet should I choose?

    Today, most buyers are looking for an aircraft that can fly direct from London to cities such as Seoul and Singapore. If you’re regularly travelling long distances, you want a fast jet that allows you to be in the office or at home with your family as much as possible. Choosing between types at the very top of the market, such as the Gulfstream G500 and G600, the Bombardier Global 7500 and the Dassault Falcon 7X and 8X, can be difficult. Speaking with an experienced professional is invaluable in finding an aircraft that perfectly fits your needs.

    This article was originally published in Luxury Lifestyle Magazine on September 24, 2019.

  • Tracey Cheek posted an article
    Painting the Financial Picture see more

    NAFA member Adam Meredith, President of AOPA Aviation Finance Company, shares what items you need when preparing to finance an aircraft. 

    "You don't really need all of this financial information, do you?" It’s a question often asked by AOPA Finance clients. Yes, yes we do. If you want the lowest rate, the most competitive structuring, the least amount down, and the lowest payment, an exhaustive analysis of your credit worthiness must be made.

    Financial Documentation

    IRS Schedule Cs or Schedule Es are not enough. While they may indicate whether the ownership structure has any pass-through income on an individual's tax return, the description of that pass-through income is summarized as a line item or two. Likewise, K-1s only indicate percentages of a shareholder’s income and liabilities. Line items and percentages don’t tell the whole story. Full tax returns do.

    Global Cash Flow

    Your tax summaries may show cash going from one related entity to another. But are you actually taking from the “left pocket and putting it in the right pocket?” If so, that isn't real money, is it? The lender will net that out of your “global cash flow.” Global cash flow—also known as a Consolidated Statement of Cash Flows—is a listing of all the various entities in which a person has ownership and what their net cash flow from all the entities is.

    And then there’s the global debt schedule.

    Global Debt Schedule

    What is a global debt schedule? It’s a comprehensive list of all the ownership entities. It’s a listing of the actual total debts of each entity in which the individual has ownership. It details what the total amount owed is, and to whom. What the monthly payments are. How much is interest versus how much is principal. It also includes maturity dates for all debt.

    Depending upon what one’s business relationship is with his partners, the lender may require additional documents to help fill in holes in the financial picture. Those might include hypothecation, subordination, or even side agreements.  A hypothecation agreement could be submitted from the controlling party acknowledging the CEO emeritus is entering into a financial relationship.

    Speaking of partners, imagine a borrower has two partners and he owns one-third of the business. Some lenders may require the other two partners’ to be party to the transaction.

    For some, that’s just too much. They’re only going to have the loan for three years so the “pain-in-the-neck” factor is not worth their time and effort. Other folks just don't want to disclose all their financial information for personal reasons. Still others have obligations with lenders elsewhere that restrict them from guaranteeing debt or have covenants in place from other business debt. For these individuals, a collateral-based loan might be the more appropriate option. The trade-off is simplicity for a little bit higher interest rate.

    Collateral Based Loans

    A collateral-based deal might proceed more quickly from initial inquiry to funding but it does come with a different paperwork burden. Even so, the process is usually far less onerous. Banks will conduct an exhaustive search on the quality of the individual as well as on the aircraft. For the individual, they want to know if this person has filed bankruptcy. Do they have tax liens against them? Are there pending lawsuits on them, for any reason? A person applying for a collateral-based loan should be crystal clear how good or bad their character looks on paper.

    Every time an AOPA Finance advisor must request additional information because our client’s paperwork is incomplete adds additional stress to the process. Bottom line-- there are no shortcuts. A transparent, painless credit deal requires in-depth financial paperwork.

    This article was originally published by AOPA Aviation Finance Company on June 12, 2019.

  • Tracey Cheek posted an article
    How Long Should You Keep Your Business Jet? see more

    NAFA member, David Wyndham, Vice President with Conklin & de Decker, discusses your plan on how long you should keep your business jet.  

    When buying a business jet, it’s important to have an idea of how long you will own the aircraft. But where do you begin your analysis? David Wyndham assesses not only why, but how you should build a plan…

    A client was recently looking at how the cost of owning their first business jet compares to a jet card or block charter. Their expected annual utilization is 350 hours and they plan to operate between two continents, requiring a Large Jet. They ultimately chose not to purchase the aircraft.

    Why did they choose not to own an aircraft? In short, their expected utilization period only covered the next two-to-three years. After that the client expected to retire and fly substantially fewer hours. In this case, a very short-term of ownership, combined with the projected decline in the aircraft’s residual value, meant the total ownership costs favored a well-structured jet card program over outright ownership.

    There is no ideal length of time to own a business aircraft, however. The ideal will differ from one prospective owner to the next. So what are the key considerations that a buyer should take into account when determining the length of ownership?

    Mission Changes

    Changes in the primary mission will often dictate a change of aircraft to one that is a better fit. For example, one flight department suddenly needed to fly much longer trips following a merger. The existing aircraft lacked the necessary non-stop range, creating the need for a replacement aircraft.

    Likewise, if the need to carry a certain number of passengers changes then an equipment change could be required. Mission requirements could dictate a smaller aircraft or a larger one. 

    For example, there's no need for a 12-passenger Long Range Jet if the primary mission changes to short hops with fewer passengers.

    When the mission changes, it's important to establish if these are for the short-term or will be more permanent. A short-term change in mission or hours to be flown might be well-served by charter or a jet card. As a part of your acquisition process, you will need to see if any foreseeable mission changes are likely to occur, and if so, when and for how long.

    Changing Costs

    As an aircraft ages, it requires more maintenance to stay reliable. The time needed to perform that maintenance tends to increase. The costs of operating a newer aircraft are therefore lower than older examples. If the economics of the newer aircraft are lower than the older one, it can further support a change.

    For business-use aircraft, taxes may be another consideration when deciding how long to keep the aircraft. There are some companies that maximize the tax depreciation of the aircraft as aggressively as the tax law allows and, once depreciated, these companies often elect to replace the aircraft.

    Part of this discussion depends on the profits of the corporation and the need for tax deductions. Taxes should never be the sole reason to buy or sell your jet, but they can be a significant decision point. It's always a good idea to consult with a tax expert for further guidance.

    Maintenance, Technology and Parts

    Maintenance Factors: Calendar requirements for travel, advances in technology and the ability to obtain spare parts after an aircraft has been out of production for many years are among the other considerations for determining how long you should plan on keeping your jet.

    If the aircraft is flown a lot, the increased calendar availability of a newer aircraft needs to be factored into the equation. Older aircraft can be down for maintenance more than 50% of the time, which necessitates significant supplemental lift. 

    How might an aging aircraft fit with your projected mission needs five years from the time of purchase?

    Technology Factors: New technology that is required for ATC, navigation and increasing safety may not be cost-effective when modifying older aircraft. For some business jets, updating systems to a modern ‘glass cockpit’ suitable for global navigation can exceed $1m or more. For the older global jet, it may not be worth spending that money. This must be assessed at the time you’re buying a jet.

    Parts Availability: For much older aircraft with fewer left flying, the ability to find spare parts, irrespective of cost, makes the aircraft less able to meet its schedule. A rule of thumb is that if less than half the fleet is still flying, the aircraft can be considered an ‘end-of-life’ model – in which case, you may need to develop a plan for the aircraft’s scrappage once your planned term of ownership is finished.

    In Summary

    If the long-term mission needs are not likely to change, then the decision should center on costs. The costs of keeping or replacing the aircraft should be calculated using a life-cycle cost approach to arrive at the best financial solution.

    This approach considers not only the operating costs but also current and future values. It may also include taxes and the cost of capital.

    In summary, there is not one right answer for how long to own a business aircraft. The timing depends on the age of your aircraft and on the costs of owning and operating it. I’ve seen owners who change aircraft every five-to-seven years and some who keep an aircraft 20 years or longer.

    This article was originally published by AvBuyer on March 6, 2019.

  • Tracey Cheek posted an article
    How to Refurbish Your Jet With Maximum Appeal (Part 1) see more

    NAFA member, Gary Crichlow, Director of Aviation Finance with Arc & Co., discusses business jet refurbishment.

    How would you upgrade your jet to optimize appeal on the resale market? 

    When refurbishing your business jet, how far should you go? How can you anticipate appealing to future buyers, and what should be the priorities with a sale in mind? Arc & Co’s Gary Crichlow shares the insights of Tobias Laps and Iain Houseman.

    Refurbishing or upgrading an aircraft is a very different investment proposition compared to refurbishing a property. While property generally appreciates in value over time, aircraft are fundamentally depreciating assets. Outside of very specific, often unpredictable market conditions, aircraft will lose value as they age.

    Any investment into a business aircraft therefore needs to be looked at from the point of view of slowing that value loss as much as possible and extracting maximum utility, rather than expecting a positive financial return.

    The most effective way to slow natural depreciation is to ensure the aircraft is desirable to the market so it sells quickly when the owner decides they want to upgrade or generate some cash.

    Mainstream, sought-after aircraft models in top maintenance condition that have undergone a high-quality cabin refit don’t tend to stay on the market for long (unless they’re unrealistically priced).

    What Makes an Appealing Interior?

    Naturally, when considering how to fit out the cabin of a private jet, it’s crucial to make choices that not only align with your current needs and desires, but also account for your future buyer’s mindset as much as possible.

    Decisions made now often have a sizeable impact on the future point of sale. The one similarity with selling property is that a well-executed interior should enable the buyer to visualize himself or herself in the cabin with little or no change rather than having to consider the cost of ripping it all out and starting again.

    Following are several themes that are important to consider when it comes to the perceived value that a well-executed cabin refit generates at the point of sale from a buyer’s perspective.

    Note: With our use of the term ‘value’, we encompass not only the actual return by way of an increased sale price (which tends to be the exception rather than the rule), but also the impact on the time it takes to sell the aircraft, thereby minimizing the detrimental effects of depreciation and time on the market.

    Aircraft Condition Over Aircraft Style

    Generally, aircraft in better condition tend to be easier to sell. A relatively new interior that’s in good condition can markedly increase an aircraft’s appeal, but its impact will be very much dependent on the basic aircraft ‘metal’, i.e. its age, hours and maintenance condition.

    Tobias Laps from Comlux Management AG notes that on Large Jets and Bizliners, the design of the interior, the layout and materials tend to have a much bigger impact on the buyer’s decision-making than on smaller aircraft.

    “In our experience, when buyers walk onto an aircraft, they typically know within the first few minutes whether the interior will work for them or not,” Laps explains.

    “If they don’t like the interior at all, they will often walk away from the deal. If there are only certain aspects of the interior that they don’t like, they will then have to decide whether changing those aspects would be worthwhile.

    “It is at this point that they weigh up their view of the basic aircraft, the metal versus the cost of changing the interior to better suit their needs. If the metal is relatively new, in good condition, and is worth significantly more to the buyer than the cost of the interior upgrade, then that’s what will tend to drive the decision,” Laps continues.

    It is therefore of key importance for a seller to understand the interplay between the technical and the cosmetic, which will depend heavily on the specific details of the aircraft.

    Do Cabin Cosmetics Matter?

    There are important aspects of the cabin prospective sellers can address to give buyers a first-class impression of the aircraft’s condition, and according to Laps that begins with choosing an interior layout with resale value in mind well before the actual sale, including “mainstream” color and veneer choices.

    “In terms of specification, wireless connectivity is a trend whereby passengers can connect their own devices while on board,” he adds. “Upgrading a wireless entertainment system is easier because the interior does not have to be removed to rewire components.”

    Know Who You’re Trying to Impress

    Regardless of the layout and specification, Laps emphasizes that the first thing you must do when selling your jet is to prepare to impress the principal’s technical representatives.

    “Make sure the maintenance records are up to date, well-organized and presentable and the aircraft is clean and fully serviceable,” he details. “It’s a very good idea to clean the landing gear, bays and externally-accessed compartments.

    “Only after the representative has examined the technical condition of the aircraft and records and is satisfied will the principal typically come to assess the interior and overall cosmetic condition and make the final decision.”

    In preparing for the principal to come and view the aircraft, it will need to be cleaned. “The exterior should be spotless, and the flight deck and cabin should be deep-cleaned, including the galley, lavatories, carpet and sidewalls,” Laps concludes.

    “Everything should look fresh and up-to-date. Soft goods and furnishings should invite the principal to visualise himself or herself using the aircraft.”

    Age Before Beauty?

    Iain Houseman of Elit’Avia, meanwhile, believes the interior will be a lot more important if the aircraft is older. “If it’s a newer aircraft, then the interior is usually still in pretty good shape and, in that case, it comes down to how appealing it looks to the buyer,” he notes.

    “If the interior has been designed in a way that appeals to a limited group of people (as an example, red leather seats or a carbon fibre interior instead of veneer) that can be a deal-breaker, because buyers will have to spend time and money to change it.

    “For older aircraft, the interior condition can be important for the same reasons – if the interior has recently been redone or is in good condition then the aircraft is more appealing because it doesn’t need significant rework,” Houseman observes.

    “Additionally, there is a need to understand the current technology systems and the proximity of major inspections for the aircraft that will allow upgrades to be incorporated and save considerable costs. 

    "For example, we estimated a major inspection for an owner’s aircraft of $1.1m and got the cost down to just under $800k – and managed to include some key avionics upgrades, internal improvements and soundproofing enhancement, which proved very useful in getting the aircraft ready for sale.”

    In Summary…

    Upgrading and refurbishing an aircraft is a significant investment that can strongly enhance your experience while on board. Nevertheless, when planning for the investment, it’s important to have a realistic view of the value a refurbishment creates.

    A well-executed cabin refit should not only meet your immediate needs in terms of space, aesthetics, utility and connectivity. It should appeal to the broadest possible range of potential buyers when the time comes to move the aircraft on.

    In ‘Part 2’ we’ll explore the current trends in cabin design as owners seek to maximize utility, comfort and style, gaining input from renowned interior designer Celia Sawyer, while also considering the importance of maintaining paperwork and ensuring the design is properly certificated to enhance the chance of selling your aircraft at the best price. Stay tuned…

    More information from

    This article was originally published by AvBuyer on August 12, 2019.




  • Tracey Cheek posted an article
    JetNet Sees Mixed Signals for Bizjet Market see more

    NAFA member Paul Cardarelli, Vice President of Sales at JetNet, discusses the current state of the business jet market.

    Business aviation data provider JetNet is fairly optimistic about the state of the business jet market, but sees some warning signs on the horizon, the company said in a state of the business aviation market presentation on Tuesday at EBACE 2019. While GDP has long been associated with business jet usage, JetNet v-p of sales Paul Cardarelli said his company's analysts have noted a bit of decoupling in GDP growth between the U.S., which has been above 3 percent for the past two quarters, and the Euro Area, which has remained flat at 1.2 percent for that span. Cardarelli placed some of the blame on the protracted drama of Brexit, which is estimated to be impacting the UK economy by £19 billion a year, among other factors.

    He noted that the business jet fleet remains “geographically concentrated,” with approximately 61 percent of the world’s business jet fleet based in the U.S., and that the 22,138 business aircraft in service today had 4.5 million cycles in 2018. The last time the fleet was at that level of utilization was around 2005, when the in-service fleet numbered approximately 14,000.

    “So we’re about one-third more aircraft than we were in ’05, and yet we’re operating about the same number of cycles,” Cardarelli noted. “This is one of the things that gives us some concern. We have an oversupply situation and we have underutilization going on.”

    Another metric of the health of the market lies in the preowned segment. An inventory of less than 10 percent of in-service aircraft is considered by many as indicative of a seller's market and, as of the end of March, the numbers according to JetNet’s data were 9.3 percent for business jets and 6.7 percent for turboprops, the lowest levels since before the global economic downturn.

    Yet, the company noted there were 513 retail jet sale or lease transaactions in the first quarter, compared to 641 a year ago—marking a year-over-year decrease of nearly 20 percent. Cardarelli attributes the discrepancy to a variety of reasons, including the partial U.S. government shutdown in January and stock market turbulence. Another factor could be the limited choice in the marketplace as buyers finally jumped in at the bottom of the market and have removed most of the choice aircraft.

    On the new aircraft side, all five of the major business jet airframers have shown an increase in backlogs in the first quarter, an aggregate 5.5 percent rise, with book-to-bill ratios all above one while Embraer and Bombardier are approaching two. “We feel good about that—that’s a good metric for the industry,” said Cardarelli. “We’re always conservative at iQ, we do want to call them as we see them, but we’re actually bullish, particularly for the OEMs."

    Since 2011, JetNet iQ has conducted its quarterly surveys gathering 500 responses in each for approximately 17,000 results from 132 countries. JetNet iQ founder Rollie Vincent shared the latest data from the company’s second quarter survey, which is 85 percent complete. The survey asks respondents to describe the current market conditions for business aviation as either not yet at the low point, at the low point, or past the low point, and establishes a net optimism score by subtracting the first number from the last.

    In the second half of last year, that number hovered around 50 percent, but plummeted to 27 percent in the first quarter of this year, and with the majority of responses received for the second quarter, optimism seems to have eroded further to 24 percent. In North America, more than 50 percent of the respondents either somewhat or strongly believe there is increasing risk for a global economic slowdown in the next 12 months, while in Europe that rate exceeded 70 percent.

    “It’s all across the market, the mood has changed,” said Vincent. “We think this is a caution sign, and it’s going to affect preowned sales first, which we think are coming down.” Also in Europe, nearly 60 percent of the respondents believe to some degree that uncertainty over Brexit has affected their aviation activities.

    The survey typically asks respondents several topical perception questions, and among them this quarter was if they are experiencing difficulties recruiting and retaining aviation-related staff. In North America and Europe, 77 percent and 67 percent agreed from somewhat to strongly that they were, adding more evidence of an industry-wide talent shortage.

    Asked about their belief that all their aircraft would be ADS-B-compliant by the Dec. 31, 2019 deadline in the U.S., enough respondents indicated strongly that they would not, leading the company to speculate that thousands of aircraft could be affected. That could perhaps to a long overdue mass retirement of aging aircraft, Vincent said.

    For the first time in eight years of surveys, JetNet noted the percentage of intent to purchase light jets, which had been as low as 11 percent, has finally exceeded 30 percent, meaning a long-awaited improvement in the segment is under way, fueled by the Pilatus PC-24. That aircraft model earned the most responses to the question “what model were you most interested in for your next purchase?,” beating out the popular Gulfstream G500, G650/650ER and Bombardier Challenger 350 over the past three surveys.

    Vincent updated the company’s 10-year forecast to 7,100 jet deliveries worth $237 billion through 2028. For the first time, the company included the category of supersonic business jets (SSBJ), which he expects will make an appearance sometime around 2026. Based on the survey results, more than 75 percent of the respondents in North America, and nearly 50 percent of those in Europe, believe to some degree that SSBJs will be in service in the next decade.

    This article was originally published by Curt Epstein on AINonline on May 22, 2019.

  • Tracey Cheek posted an article
    Closing Before the Aircraft is in the Delivery Condition - Exploring the Risks see more

    NAFA member Amanda Applegate, Partner with Aerlex Law Group, explores the risks associated with closing before the aircraft is ready. 

    More often than I would have thought possible, buyers and sellers are motivated by a variety of reasons to close on the purchase and sale of a pre-owned aircraft before the pre-purchase inspection is complete or before the inspection discrepancies are rectified. Sometimes it is because the buyer wants to close in order to start a major refurbishment to the aircraft and there is a long lead time on the correction of certain discrepancies and/or it would be more efficient to fix the discrepancies simultaneously with the refurbishment. Other times the seller wants the aircraft sold by a specific date for financial reasons, to make room for their newly acquired aircraft, or so the seller’s crew can leave for training on a replacement aircraft. Regardless of the reason, as a buyer there are certain risks that should be considered. 

    If the inspection isn’t complete at the time of closing, the risk to the buyer may be substantial because there could be unknown issues with the aircraft which haven’t yet been discovered. Additionally, if closing takes place while the discrepancies are in the process of being repaired then additional, significant discrepancies could be found, but the buyer no longer has the option to walk away from the purchase. 

    If the parties understand the risks and elect to move forward and close before the aircraft is in the contractually agreed-upon delivery condition, then there are two options. The parties can agree on a purchase price reduction based in part on the estimated cost to repair the discrepancies or the parties can agree on a holdback amount to be held by the escrow agent after closing, with those funds used to pay for the repair the outstanding discrepancies. 

    A reduction in purchase price allows the parties to complete the transaction and have no further dealings with one another. The price reduction should not only be for the amount of the outstanding discrepancies but should also include an amount that represents the risk that the buyer is assuming by accepting an aircraft which is not in the required delivery condition at closing. A short amendment should be drafted and signed by the parties which indicates the buyer is accepting the aircraft even though it does not meet the delivery conditions in exchange for the price reduction. The amount of risk being assumed under this option depends on the status of the inspection and/or the extent of the unrepaired discrepancies. One understated benefit of the price reduction over a holdback is that the transaction is completed, thus the seller has no further responsibilities and the buyer is free to do whatever they want with the aircraft going forward. 

    A holdback allows the seller to remain responsible after closing for paying the cost of the repairs necessary in order for the aircraft to meet the delivery conditions. If the holdback amendment is drafted properly, there is far less risk for the buyer under these circumstances. The buyer should make sure the seller remains responsible for not only the known discrepancies but any new discrepancies found during the completion of the repairs. Furthermore, the holdback amount should be enough so that collecting for the repairs from seller does not become an issue. I recommend the holdback amount be 150% of the estimated cost of the repairs. Additionally, the funds should be released automatically when the invoices are submitted to the escrow agent without further approval by the seller and if the holdback is not enough to cover the cost of the outstanding repairs, seller should remain liable. The escrow agent should be a party to the holdback amendment and they should confirm they understand the terms prior to execution. This will help avoid a dispute over when or how an invoice is paid. The parties will continue to work together until the repairs are complete and the remaining holdback amount, if any, is released to the seller. 

    There can be legitimate business reasons to close on a pre-owned aircraft prior to the aircraft meeting the delivery conditions as originally agreed upon between the parties. When the parties desire an early closing, it is important that the risk allocation is considered in the financial terms and that the agreement of the parties is clearly documented, including, if necessary, the post-closing obligations of the parties and the responsibilities of the escrow agent.

    Please contact Amanda Applegate at 310-392-5200 or

    This article was originally published by Aerlex Law Group in BusinessAir Magazine on July 15, 2019.

  • Tracey Cheek posted an article
    Used Aircraft Maintenance Analysis – June 2019 see more

    NAFA member, Tony Kioussis, President of Asset Insight, shares the June 2019 Used Aircraft Maintenance Analysis.

    Average Ask Prices for Asset Insight’s tracked fleet decreased in June to just above the 12-month low figure while asset availability rose near to April’s YTD high. Tony Kioussis explores which models were impacted most.

    Asset Insight’s June 30, 2019 market analysis covering 96 fixed-wing models and 1,680 aircraft listed for sale, revealed a Quality Rating only slightly better than the 12-month worst figure, but remained within the ‘Very Good’ range after decreasing from 5.212 to 5.196 on a scale of -2.5 to 10.

    At the same time, our tracked fleet’s Maintenance Exposure figure (an aircraft’s accumulated/embedded maintenance expense) improved 3.1% last month, and 1.1% for the second quarter of 2019.

    June’s Aircraft Value Trends

    The average Ask Price for Asset Insight’s tracked fleet fell 1.1% in June, as all four groups lost ground:

    • Large Jet values posted a new record low figure, decreasing 5.5% in June and 8% during Q2;
    • Medium Jets lost 1.3% over the last 30 days but registered a 7.5% overall increase during Q2;
    • Small Jet values decreased 1.2% for the month and 1.8% for Q2; and 
    • Turboprops suffered their third consecutive monthly Ask Price decrease, posting a record-low figure with a 1.6% reduction, and a total decrease of 2.4% during Q2.

    June’s Fleet for Sale Trends

    The total number of used aircraft listed for sale within Asset Insight’s tracked fleet increased by 27 units in June.

    • Large Jet inventory increased 5.9% (21 units);
    • Medium Jet inventory increased 1.2% (6 units);
    • Small Jets was the only group whose inventory decreased (0.5%, or 3 units); and
    • Turboprops increased 1.2% (3 units).

    June’s Maintenance Exposure Trends

    Maintenance Exposure (an aircraft’s accumulated/embedded maintenance expense) for June’s inventory fleet mix improved 3.1%, decreasing to $1.4m from May’s $1.45m. Results for each of the four groups were as follows:

    • Large Jet maintenance exposure rose (worsened) 0.2% to remain just above the 12-month low figure. For Q2 the maintenance exposure improved 7.1%;
    • Medium Jet exposure fell (improved) 4% in June and 1.4% during Q2;
    • Small Jets posted a dramatic 11.4% reduction (improvement), but maintenance exposure ended Q2 6.7% higher;
    • Turboprop maintenance exposure increased (worsened) 2.5% in June and 6.3% during Q2.

    June’s ETP Ratio Trend

    Based on June’s maintenance exposure and ask price changes, the average ETP Ratio figure decreased (improved) to 65.4%% from May’s 69.8%, with all but the Turboprop group contributing to the improvement. Why is this information important…?

    The ETP Ratio calculates an aircraft's Maintenance Exposure as it relates to the Ask Price. This is achieved by dividing an aircraft's Maintenance Exposure (the financial liability accrued with respect to future scheduled maintenance events) by the aircraft's Ask Price.

    As the ETP Ratio decreases, the asset's value increases (in relation to the aircraft's price). ‘Days on Market’ analysis has shown that when the ETP Ratio is greater than 40%, a listed aircraft’s Days on Market increase (in many cases by more than 30%).

    So, for example, aircraft whose ETP Ratio exceeded 40% during Q2 2019 were listed for sale an average 71% longer than aircraft whose Ratio was below 40% (226 days versus 386 days on the market, respectively).

    By comparison, during Q1 2019 aircraft whose ETP Ratio exceeded 40% took 62% longer to sell (237 versus 384 Days on Market).

    How did each group fare during the month of June?

    • For the first time ever, Large Jets posted the lowest (best) ETP Ratio at 52.5% (which was also the group’s 12-month best figure);
    • Turboprops were not in first place for the first time since Asset Insight has been keeping records, due to the group’s all-time highest (worst) ETP Ratio at 56.6%;
    • Small Jets were third with a Ratio of 68.8%; and
    • Medium Jets improved slightly by decreasing to 75.2%.

    Excluding models whose ETP Ratio has remained over 200% during the previous two months (considered outliers), following is a breakdown of which individual business jet and turboprop models fared the best and worst during June 2019.

    Most Improved Models

    All of the ‘Most Improved’ models posted a Maintenance Exposure decrease (improvement). Interestingly, the Bombardier Learjet 31 did not experience an Ask Price change, while the Bombardier Learjet 35A, Cessna Citation ISP and Cessna Citation II experienced decreases of -$46,073, -$1,690 and -$30,399, respectively. Only two models posted price increases. They were:

    • Cessna Citation V Ultra   +$179,385
    • Bombardier Learjet 45 (APU equipped) +$395,875

    Most Improved Business Jets and Turboprops - June 2019


    Bombardier Learjet 31

    The Learjet 31 leads our ‘Most Improved’ list after placing second from the bottom on May’s ‘Most Deteriorated’ list. Although no aircraft traded in June, the model captured this spot complements of a Maintenance Exposure decrease (improvement) for the listed fleet that exceeded $226k.


    Nevertheless, while only four aircraft (11.5% of the active fleet) are listed for sale, the asset’s 118.6% ETP Ratio holds about the same minimal hope for sellers during the coming months as it did in June.

    Bombardier Learjet 35A

    In terms of a statistical recovery, it doesn’t get much better than the Learjet 35A’s leap from worst on May’s ‘Most Deteriorated’ list to the model’s ranking in June – and it’s all thanks to a Maintenance Exposure decrease exceeding $265k (a figure that overshadowed a substantive ask price decrease).

    One aircraft transacted in June, and two joined the inventory fleet to increase that number to 43. That only represents 8.6% of the active fleet, but the aircraft’s ETP Ratio (170.3%) is unlikely to find buyers for too many sellers.

    Cessna Citation ISP

    Three aircraft transacted in June, three were withdrawn from the market, and three were added to an inventory mix that now totals 53 units (19.9% of the active fleet). The model earned its way onto the ‘Most Improved’ list through a Maintenance Exposure reduction exceeding $131k, and the inventory fleet also posted a slight Ask Price decrease.

    The resulting ETP Ratio – approaching 102% - combined with high availability of this well-aged fleet is unlikely to generate sudden purchasing exuberance.

    Cessna Citation II Private Jet


    Cessna Citation II

    From May’s ‘Most Deteriorated’ list to June’s ‘Most Improved’ grouping, the Citation II’s reversal of fortune appears impressive – until you start to peel back the technical onion: No trades occurred during the month of June; the asset’s Ask Price dropped over $30k; 94 aircraft are listed for sale (16.8% of the active fleet); and the ETP Ratio stood at 109.1%, even after a Maintenance Exposure decrease approaching $148k.

    While a 17.7% one-month ETP Ratio decrease technically earned the model a place on this list, it’s unlikely to aid sellers seeking to dispose of a Citation II.

    Seller Advice: Carefully consider all offers, as prospective buyers will be few in number and are unlikely to be negotiation motivated.

    Cessna Citation V Ultra

    Sellers of this model have some opportunities, especially if their aircraft’s engines are enrolled on an Hourly Cost Maintenance Program. No aircraft transactions were posted for the Citation V Ultra in June, but one unit was withdrawn from the inventory and three were added, resulting in 26 aircraft listed for sale (8.4% of the active fleet).

    With the model’s average ETP Ratio falling below 65% by virtue of a Maintenance Exposure decrease exceeding $89k and an Ask Price increase exceeding $179k, both buyers and sellers have an opportunity to structure transactions offering good value.

    Bombardier Learjet 45 (APU-equipped)

    As with three other models on June’s ‘Most Improved’ list, we captured no transactions during the month of June. The 17 aircraft in inventory, when added to listed Learjet 45 units that are not APU-equipped, represent approximately 10.8% of the model’s active fleet.

    With the model experiencing a Maintenance Exposure decrease exceeding $67k, along with a sizeable Ask Price increase, the resulting average ETP Ratio should make many listed units (especially those enrolled on an engine HCMP) quite marketable – assuming a willing buyer can be located.

    Most Deteriorated Models

    All but two models on June’s ‘Most Deteriorated’ list (the Hawker Beechjet 400 and Hawker 800A) experienced a Maintenance Exposure increase (deterioration), and all six asset types posted Ask Price decrease, as follows:

    • Hawker Beechjet 400   -$125,250
    • Gulfstream GIV-SP (MSG3)  -$947,500
    • Cessna Citation V 560  -$7,538
    • Hawker 800A    -$73,714
    • Beechcraft King Air 350 (Pre 2001) -$97,019
    • Beechcraft King Air C90  -$21,228

    Most Deteriorated Business Jets and Turboprops - June 2019


    Hawker Beechjet 400

    The model earned the ‘Most Deteriorated’ position for June through a Maintenance Exposure increase exceeding $11k and an Ask Price reduction exceeding $125k. Only four aircraft are presently listed for sale (10.1% of the active fleet), and two aircraft traded during the past 90 days.

    However, at nearly 152%, the model’s ETP Ratio is too high for even engine Hourly Cost Maintenance Program coverage to help much on the valuation front – although it may make the asset slightly more appealing.

    Gulfstream GIV-SP (MSG3)

    We were somewhat surprised to find this model on the ‘Most Deteriorated’ list, but it earned its way here through a $570k Maintenance Exposure increase along with an Ask Price decrease approaching $945k. One aircraft traded in June and the seven remaining in inventory represent only 8.6% of the entire GIV-SP active fleet.

    As we have cautioned in previous reports, whenever a limited number of units are listed for sale, changes to one or two assets can radically alter the view. In this case, only two aircraft are posting an Ask Price and one asset dropped its price by nearly 22% in June.

    This model may be on the ‘Most Deteriorated’ list, but with an ETP Ratio of 60.3%, and with many units enrolled on engine HCMP, many sellers should have the opportunity to entertain reasonable offers.

    Gulfstream GIV-SP Private Jet


    Cessna Citation V 560

    Two units transacted in June, and the 27 inventory assets represent 10.2% of the active fleet. The model’s Maintenance Exposure increased nearly $117k in June, while value decreased as a result of two sellers lowering their Ask Price.

    The problem here is the aircraft’s economic usefulness and its ETP Ratio – neither of which is assisting its marketability.

    Hawker 800A

    The single trade we uncovered during the month of June left 40 aircraft listed for sale (16.4% of the active fleet). The model actually posted an almost $33k maintenance exposure decrease in June, but that was overshadowed by an Ask Price decrease of more than twice that magnitude.

    The real problem affecting sellers of these assets is how far prices have fallen leading to the model’s 188.1% ETP Ratio. Since most of this fleet is enrolled on engine HCMP, there few levers (other than price) that sellers can engage to help them compete for the limited number of buyers.

    Beechcraft King Air 350 (Pre 2001)

    The King Air 350 was another model we were surprised to see on this list, especially since its ETP Ratio is 44.4%. However, price reductions to a couple of listed assets, along with a Maintenance Exposure increase approaching $138k earned the asset its recognition.

    Three units traded in June and the 21 aircraft listed for sale now represents 5.3% of the active fleet. Many sellers should be well-positioned to negotiate a decent price, while many buyers will find sufficient selection to maintain the model’s fairly robust trading environment.

    Beechcraft King Air C90

    The story is a little different for the King Air C90, and we recorded no trades for the month of June with one addition to inventory. With 50 aircraft listed for sale (13.1% of the active fleet), buyers hold the stronger hand.

    The King Air C90 earned its spot on this list through a Maintenance Exposure increase approaching $18k and an Ask Price drop exceeding $21k that, combined, raised the model’s ETP Ratio past 124%.

    Considering that we’re dealing with aircraft aged between 37 and 48 years, the ETP Ratio is unsurprising. What is surprising is the sudden deterioration this relatively popular model has experienced.

    The Seller’s Challenge

    It is important to understand that the ETP Ratio has more to do with buyer and seller dynamics than it does with either the asset’s accrued maintenance or its price. For any aircraft, maintenance can accrue only so far before work must be completed.

    But as an aircraft’s value decreases, there will come a point when the accrued maintenance figure equates to more than 40% of the aircraft’s ask price. When a prospective buyer adjusts their offer to address this accrued maintenance, the figure is all-too-often considered unacceptable to the seller and a deal is not reached.

    It is not until an aircraft undergoes some major maintenance that a seller is sufficiently motivated to accept a lower figure, or a buyer is willing to pay a higher price and the aircraft transacts, ultimately.

    A wise seller needs to consider the potential marketability impact early maintenance might have on their aircraft, as well as its enrollment on an Hourly Cost Maintenance Program where more than half of their model’s in-service fleet is enrolled on HCMP.

    Sellers also need to carefully weigh any offer from a prospective buyer against the loss in value of their aircraft for sale as the asset spends more days on the market awaiting a better offer while simultaneously accruing a higher maintenance figure.

    More information from

    This article was originally published in AvBuyer on July 17, 2019.

  • Tracey Cheek posted an article
    How to Know When It’s Time for a Private Jet Upgrade see more

    NAFA member, Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services, shares what to look for when determining if you are ready for a jet upgrade.

    If you’ve got a private jet, congrats. You’re one of a very select few people who do.

    Having a private jet is a unique joy. Skipping TSA security checks, avoiding cramped quarters, and traveling on your own schedule are all perks that justify any expenditure.

    But what if your experience is lacking? It might be time for a private jet upgrade.

    If you’re thinking it’s time to revamp your jet but aren’t sure, look no further. VREF will show you a few signs that it’s time to refurbish that baby.

    The Exterior Is Looking Rough

    Considering planes regularly soar through the sky for long periods of time over great distances, it’s understandable that they’d accrue a significant amount of wear and tear over the years. The most obvious form that wear takes is cosmetic.

    The day you bought your jet was probably a joyous occasion. A shiny, gleaming vehicle that was prepared to literally shoot you into the clouds. Only, these days, it might not be so shiny anymore.

    If you’ve found yourself less enthralled with how your jet is looking, it might be time for a new paint job. Sometimes, the only thing you need to reignite that initial love affair is a fresh look. It’s one of the simplest ways to get your jet looking brand new again, so if it’s looking worse for the wear, don’t hesitate to slap a fresh coat of paint on it.

    The Interior Isn’t Looking So Hot Either

    When your jet takes a beating on the outside, it doesn’t have much practical effect on your experience. It might not be as great to look at as it once was, but your trip goes as planned, you won’t be looking at the exterior of your jet during the flight.

    The interior of the jet is what really counts when it comes to having a positive flying experience. A rundown or outdated interior cabin can make travel a serious downer.

    It might be something as simple as cosmetics. If you just don’t like the look of your cabin anymore, revamp it. A sleek, modern update can often do wonders.

    That said, it might be an issue of actual convenience. After all, a private jet isn’t much fun without all the proper amenities.

    If your jet’s tech seems like it’s been lifted straight from a 60s Bond film…Well, actually, that sounds pretty cool. But you know what we mean. Your jet’s features should feel modern.

    Bluray players, up to date television technology and other little details can make or break a flying experience. Don’t let your jet live in the past. If it feels dated, it probably us. Give it a much-needed overhaul.

    Invest in a Private Jet Upgrade

    If you think you need a private jet upgrade, you most likely do. Don’t let your experience be ruined by an aging piece of equipment when all it would take is a fresh look to bring it into the modern age.

    On the other hand, you might be looking to sell your jet and get something new. If so, make sure you’re getting the job done right. Get a top quality professional appraisal right here.

    This article was originally published by VREF Aircraft Value Reference & Appraisal Services on April 22, 2019.

  • Tracey Cheek posted an article
    Business Aviation Industry Set To Grow In Size, Scale And Strength Over The Next Five Years see more

    NAFA member Chad Anderson, President of Jetcraft, discusses the two major differences between this year's market forecast and those from previous years.

    Last month we released our 5-Year New & Pre-Owned Business Aviation Market Forecast – the first report of its kind to take a precise, comparative and quantified look at both types of aircraft transactions.

    Aside from introducing pre-owned market predictions, we’ve updated our overarching methodology as compared to previous reports, making it even more precise. We’ve shifted to a five-year rather than a 10-year outlook, to better reflect the current aircraft ownership experience, and adjusted the overall population of aircraft analyzed to more closely align with our expertise. Furthermore, we’ve classified new deliveries as transactions only from date of entry into service and retrospectively normalized classifications prior to 2012, when all aircraft built were considered new deliveries. Finally, we’ve leveraged more of our own transaction data for a truly consolidated outline of how we see the industry behaving.

    The findings show that our industry will continue to grow in size, scale and strength over the next five years, hitting nearly $30bn per year in revenue by 2023 – a remarkable figure. This is the first time a value like this has ever been assigned to the industry. We also expect to see the business aviation fleet grow by 12.1% in that time frame.

    The forecast predicts continued and significant growth in the pre-owned industry, with an expected 11,765 transactions over the next five years, totaling $61bn in value. By 2023, we forecast four times as many pre-owned transactions vs. new deliveries, primarily due to the growing value proposition of these aircraft. Maintenance capabilities are increasing, and we are seeing greater accessibility, rapidity and cost-efficiency of high-quality refurbishment. This is resulting in higher demand for older or out-of-production aircraft, including amongst buyers who previously exclusively bought new models. Our forecast reveals that the average aircraft retirement age is now 32 years – nearly a decade older than previously thought.

    We continue to see a shift towards large aircraft types in both new and pre-owned markets worldwide. Buyers are looking for larger and longer-range models and as a result of this, manufacturers are focusing on producing aircraft almost entirely in the midsize segment and above.

    New unit deliveries are predicted to stay flat throughout the forecast period whilst generating higher revenues, due to the increase in large aircraft transactions. Over the next five years, we’ll see many more customers turn towards large jets rather than light jets, as the needs of business travelers evolve on a more global scale.

    On behalf of the team at Jetcraft, I am honored and excited to have produced the very first new and pre-owned business aviation market forecast, stemming from our 55 years’ experience in connecting buyers and sellers across the world. We hope you find it useful, interesting and insightful and we welcome your comments, questions and feedback.

    To download the full 2019 5-Year New & Pre-Owned Business Aviation Market Forecast, visit

    View video here.  

    This article was originally published by Jetcraft on June 28, 2019.

  • Tracey Cheek posted an article
    Used Jet Market Opinion: Chris Brenner, Jetcraft see more

    NAFA member, Chris Brenner, Senior Vice President of Sales at Jetcraft, discusses the used jet market.

    Whether it's buyer uncertainty or a lack of premium inventory, some analysts have noted a dip in the used jet market in the opening months of 2019. Rebecca Applegarth asks how Jetcraft’s Chris Brenner reads the situation.

    So far, 2019 has been a year of global uncertainty on many fronts, whether due to talk of potential Sino-American trade wars, Brexit, or political restiveness in Europe. 

    Has the political instability impacted the global used business jet sales arena? What else has affected used aircraft sales trends in the early part of the year? Various reports on the used jet marketplace indicated a slight slowing Year-over- Year for used aircraft transactions during the first quarter of 2019.

    Having been trading in the pre-owned Business Aviation marketplace since 1962, today Jetcraft has offices around the world, and in 2018 the company facilitated more than 100 aircraft transactions for the first time in its history. Understandably, the health of the market in 2019 is of special interest.

    “Several of the strongest markets for Business Aviation are currently experiencing political uncertainty,” Chris Brenner explains, “so naturally this is making buyers and sellers more cautious.”

    Brenner has been in the Business Aviation industry for the past twelve years, having originally joined Jetcraft as sales and marketing coordinator in 2009 from a small aircraft dealership that specialized in piston and light turbine aircraft.

    He has since held various sales positions within the organization and was appointed senior vice president, sales for the Americas in 2017.

    “Taking a longer-term view,” he elaborates, “we are still in a period of steady growth - so if there is a slight slowing, it is all part of the cycle.”

    Impacts of an Evaporating Pool of Inventory

    An additional consideration as to what brought about the slowing in sales during early 2019 is that less than 10% of the world’s fleet of jets is currently on the market, which historically is very low.

    The expectation is that with the leading aircraft manufacturers due to deliver some attractive newly-certified jets to customers later this year, some of those new aircraft owners will release their current jets onto the used market, thereby replenishing it somewhat.

    Until that happens, though, there remains an unusually low percentage of newer used jets in the market.

    A recent report from Hagerty Jet Group highlighted the resulting buyer frustration as a reason for an increase in off-market transactions (specifically in the Gulfstream G550 market, in the case of Hagerty’s analysis).

    But is this something that is being seen in the wider used aircraft marketplace – and if so, should it be of concern to anybody? “It has been widely reported that there is a lack of younger inventory, and buyers are having to turn to older aircraft,” Brenner reflects.

    “Many sales do take place before an aircraft has been marketed, which you could define as being ‘off-market’. However, this serves to demonstrate the demand for pre-owned aircraft in today’s market.

    “It should also highlight the need to work with consultants that have inventory visibility and can provide you with up-to-the-minute market insights,” Brenner explains.

    Though a buyer might like to find an off-market ‘deal’, the reality is that they may be less likely to find sellers prepared to accept an offer in keeping with the realities of the on-market aircraft values.

    “Buyers and sellers need to do their due diligence. Then transparency is not an issue,” Brenner says of selecting the best consultant to represent your interests in an aircraft transaction, whether it’s on or off the market.

    Stable, Sensible Pricing Essential

    So, what will be important if the market is to continue to thrive when the pace of transactions picks up again and the anticipated replenishment of inventory occurs?

    Speaking for both the near- and mid-term, Brenner concludes, “It is important that the market remains stable. For that to happen, pricing needs to remain sensible to avoid over-supply and maintain this period of steady, healthy growth.” 

    More information from

    This article was originally written by Rebecca Applegarth and published in AvBuyer Magazine, Vol. 23, Issue 6, 2019, p. 48.

  • Tracey Cheek posted an article
    Supplemental Lift - What's Best For You? see more

    NAFA member David Wyndham, Vice President with Conklin & de Decker, shares what supplemental lift is and how it can benefit you.

    Are there some business travel needs your aircraft can’t fulfill? David Wyndham explores the option of supplemental lift. What is supplemental lift, and how can you use it as an appropriate add-on in your current aircraft operations?

    Supplemental lift may be a logical alternative to your current aircraft. As the term implies, supplemental lift is an add-on to your current operation – it is not a replacement for your current aircraft. What it does is to achieve a means of expanding your operation without adding another aircraft, extra crew, and support.

    It may be that you have a specific need for short-term lift if an aircraft in your operation is undergoing a major maintenance event. Or you may need extra flight hours beyond what your current aircraft can support.

    Alternatively, there may be several unique missions on the horizon for which your current aircraft is unsuitable. Perhaps you simply wish to bridge the gap before acquiring another aircraft as your flight operation grows. Thankfully, there is a range of supplemental lift options available that offer a modest number of additional flight hours without the costs associated with actually owning an extra aircraft.

    Within this article, we will consider the following questions:

    • What are aircraft charter, jet cards and fractional ownership?
    • When does supplemental lift make sense?

    What are Aircraft Charter, Jet Cards and Fractional Ownership?

    Aircraft charter enables you to rent an aircraft for a trip. With charter, you pay the entire time the aircraft is flying (including any unoccupied i.e. ‘deadhead’ legs without you aboard). Therefore, charter costs are minimized with round-trip travel. Aircraft charter tends to work particularly well if one or more well-qualified providers operate the aircraft type you need close to your location.

    Jet cards are a form of pre-purchased charter. Some jet card programs are aligned with a major fractional ownership company (such as NetJets).

    Other providers offer a broker arrangement where they sell you the time and find the qualified operator for you. Most jet card providers offer both one-way and round-trip pricing.

    Fractional ownership enables you to purchase or lease a share of an aircraft in proportion to the additional flying that you plan to do. This may be a good way to bridge the gap between insufficient current aircraft availability and developing sufficient need to justify buying an additional aircraft outright. Operators who purchase a fractional share can choose to sell it back to the provider at the end of the contract.

    When Does Supplemental Lift Make Sense?

    As highlighted through the different options, supplemental lift can be a short- or long-term solution. The hours can vary with your needs. To illustrate, and also highlight how and when supplemental lift makes sense, following are some real-life examples.

    Extended Downtime: One operator I work with has an aircraft that’s almost 12 years old. They fly regularly and the aircraft is fast approaching a major maintenance check and engine overhauls. The avionics suite is outdated and the principal wants to add in-flight cabin connectivity. Additionally, the paint and interior are in need of a refresh.

    Having conducted a financial analysis, the operator concluded that the aircraft value prior to the work being done is lower than they would sell it for. Moreover, the cost of a newer replacement aircraft is more than they wish to spend. The plan, therefore, is for them to complete the overhauls and upgrades at the same time, with an expected downtime of at least four months. This means a temporary solution is required that effectively replaces their aircraft for the time it will take to complete the maintenance and upgrades.

    An estimated 120 flight hours will be needed over those four months, and the operator has chosen aircraft charter as the right option to fulfill this demand.

    Fortunately, they’re located in a city with several large charter operators nearby and were able to negotiate a block of hours with a local provider with a top safety rating.

    Expanding Mission Need: A different corporate client recently expanded operations to a distant city and their current aircraft cannot make that trip non-stop. The client estimates flying one trip per month for approximately eight flight hours, representing a 20% increase in their flying activity. To upsize to a larger aircraft would increase the operating budget by almost 90%.

    The cost to buy the larger business jet is nearly three times what their current jet is worth. Over the course of a year, the client would need less than 100 hours flying a longer-range jet and their demand analysis indicates this utilization is likely to remain steady and long-term. In addition, avoiding a fuel stop on 20% of the trips wouldn’t be worth the added investment in a new, larger jet.

    But what if the client were to supplement their operations with added lift?

    The client was able to find a fractional ownership solution to meet their needs at a fraction of the cost of replacing their current aircraft. When they near the end of their current contract, they will reassess their need and budget, revisiting the question of acquiring a larger business jet.

    Growing Operation: One last example is of a flight operation growing at 15% per year. Corporate projections indicate that this rate of growth will continue and there are new departments asking for use of the aircraft.

    In their analysis, the client’s aviation department estimates that they can meet the additional demand for the next 18–24 months by hiring a new pilot and combining a few trips each month. Acquiring another aircraft may take between six and nine months.

    The company hired a consultant who performed an aircraft needs analysis. The report confirmed the aviation department’s internal findings and recommended that a second aircraft be purchased within the year. The report also recommended adding supplemental lift within the next six months to maintain the department’s ability to meet trip requests without any disruption.

    Accordingly, they purchased a jet card offering them the additional projected flight hours. The card program includes price guarantees for 12 months with the initial purchase.

    Simultaneous Travel Needs: One more consideration might be the scenario where you occasionally need simultaneous aircraft. If you anticipate multiple overlapping requests for the aircraft, a supplemental option, such as a charter, jet card or fractional ownership might make sense.

    Next month we will continue our discussion with consideration of how to choose the right aircraft, and then manage the supplemental lift as you grow into another aircraft.

    This article was originally published in AvBuyer Magazine, Volume 23, Issue 6, 2019, p. 76

  • Tracey Cheek posted an article
    A Decade of Aircraft Finance Evolution see more

    NAFA member, Ford von Weise, Global Head of Aircraft Finance at CIti Private Bank, shares why now is a good time to buy your business aircraft.

    A decade ago, the question of whether or not you could finance your business aircraft acquisition had a complicated answer. With the economic crash of ’08, the bubble burst and the lending industry became harsh, especially for what were deemed illiquid investments, including business assets such as aircraft. Unless you met the significantly increased financial requirements, encompassing net worth and capital liquidity, as well as having “investment grade” credit and a well-established relationship with the bank, then financing an aircraft likely wasn’t an option for you.

    Many banks raised interest rates across the board or got out of aircraft lending completely. This move was due to much tighter regulations that more than doubled the capital reserves requirement (new Basel III loan reserves), along with the quickly declining market value of both new and used aircraft. With these developments, coupled with heightened loan covenants (restrictions on borrower activities that could jeopardize their ability to repay), lending decreased and fewer transactions resulted. If you still pursued that aircraft investment, you either paid with cash, or waited for the aircraft market to shift again.

    That shift began taking place with the recovering economy. The demand for light and mid-size aircraft increased. New (non-bank) lenders began filling the space in the middle of the aircraft market, capital started flowing back into aircraft finance, and loans on aircraft once again became an appealing investment. The diversity in lenders brought diversity in financing options, and opened up the aircraft market to older models (although mandatory avionics technology upgrades – cost-prohibitive for some – now had to be considered).

    More customized financing, in the form of capital leases, operating leases, or traditional loans with varied terms, became available. The big banks leaned toward financing new or “like new” aircraft with secured loans, while non-bank lenders trended toward more varied aircraft and types of loans. Credit quality, along with the aircraft’s residual value, still were big factors for both. However, credit requirements lessened and residual values rose, preparing the aircraft lending market to take off. It wasn’t an awful time to buy a business aircraft anymore, but it also wasn’t the best, yet. 

    The big variable in financing terms had to do with the unpredictability of aircraft residual values. While it became easier to know what an aircraft was worth (compared to the years following the recession), residual values still were inconsistent. This situation was largely informed by the increasingly faster technology cycles in avionics, combined with new manufacturers’ discounting. Because banks look at an aircraft as an asset and need to secure collateral for its underlying worth, the make, model, and technology with which it is equipped (among other factors) influenced residual value and financing terms accordingly. 

    Demand for business aircraft continued to grow, along with financing capital in the aircraft finance market. Combined with more varied loan options and increasingly favorable terms, competition in the space soared. Banks revised their risk acceptance criteria in order to buy more volume, reducing financial requirements even more. Now, with lower interest rates, lower market values for business aircraft, mostly stable residual values, and an increasing number of buyers, “covenant light” transactions are increasing. 

    The developments in the aircraft finance market during the last decade may be complicated. Yet the question of whether or not to buy a business aircraft no longer is complicated: there’s no better time to buy! While we’re not back to the crazy deals of non-recourse lending seen prior to ’08, there’s little reason to wait to make an investment in business aircraft. However, borrow with caution. If you’re on the verge of acquiring a business aircraft, be sure to seek a lender with aviation specialization.

    This article was written by Ford von Weise and originally appeared in Business Aviation Advisor May/June 2019.

  • Tracey Cheek posted an article
    Airplane Acquisition Checklist Series: Part Two: Purchase and Delivery see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, follows up with part two of the Airplane Acquisition Checklist covering Purchase and Delivery.

    In Part 1 of this series on airplane acquisition, we discussed the most efficient way to approach buying an aircraft by using three checklists—Pre-purchase, Purchase and Aircraft Delivery. We also detailed the Pre-purchase Checklist.

    You're now staring at your ideal airplane on your screen. Time to run the Purchase Checklist:

    • Escrow, Letter of Intent and Purchase Agreement
    • Notify Lender
    • Pre-purchase Inspection
    • International Registry (if applicable)
    • Insurance
    • Title Search and Background Checks

    Escrow, Letter of Intent and Purchase Agreement. Escrow appears in all three checklists. Before it was a reminder to get your down payment together. Now it triggers you to move money into an escrow account that you set up through your escrow agent. If you're unfamiliar, AOPA has a strategic partnership with Aerospace Reports and as a member you’ll get discounted pricing and we can help get things set up. Likewise, if you’re working with another escrow company AOPA Finance can help coordinate that too. Plan on a deposit of 5%-10% of the aircraft's asking price.

    The letter of intent puts a clock on the deal, enables you to withdraw from it without penalty under certain conditions you and the seller negotiate, and establishes the parameters for the final price.

    This is also time to have your aviation attorney to draw up a detailed purchase agreement. If you don't have one, AOPA has a sample purchase agreement you can view here. You may want to consider signing up for Pilot Protection Services which includes consultation with an attorney regarding your purchase of an aircraft specific to your state and the legal requirements there. What it covers includes, but is not limited to, purchase amount, refund terms, deadlines for the process, representations and warranties, even the location of aircraft delivery.

    Notify Lender. The sooner you notify the lender, the sooner the lender can convert the pre-approval into an approval. Your lender will conduct background checks, damage history queries, etc. If the aircraft is missing logbooks, that may affect the stipulations of the pre-approval with the lender. Each has a set of tolerances for missing logbooks. Ask before you commit to a particular lender. AOPA Finance may be able to help.

    Pre-purchase Inspection. Even before you go to the airplane, have the logbooks sent to you. Nowadays, most sellers have their airframe and engine logbooks scanned into PDF format for ease of emailing. Get your mechanic started perusing those logs. You and your lender will want to know whether the logbooks are complete as soon as possible. An incomplete set can frequently impact the final price, and it may also affect the plane's insurability.

    In most instances, it's best that a mechanic other than the regular mechanic for that airplane perform the pre-purchase inspection. That may mean flying your assigned A&P to the airplane's location, with a hotel stay.

    International Registry. If your plane is subject to the Cape Town Treaty (see here for more info), you should begin the International Registry process simultaneously with contacting your escrow agent. It's complex and time-consuming and may affect the timing of your closing date. Subject to some exceptions, an aircraft must be registered with an appropriate aviation authority before it can be legally operated in any country. Suffice it to say, better to have your team of experts handle this checklist item.

    Insurance. As far as your lender is concerned, typically, they’ll require you to maintain full ground and flight insurance, as well as "Breach of Warranty Coverage" for the amount of the loan with a carrier acceptable to the lender.

    The lender must be named as "loss payee" and be protected by a "lien holder's endorsement." Once you have been placed with the appropriate lender, we will send you the specific insurance requirements for that lender.

    Title Search and Background Checks. Usually, this will be a straightforward process. If a plane has been in an incident, involved in an estate dispute or part of a bankruptcy, though, then things could get complicated. Your prospective insurer, your lender and your escrow agent may all play a part in these searches and checks. We've heard too many stories of airplane deals falling through at the last minute because of lack of due diligence by the buyer, so be thorough.

    All that complete, what's left is to take delivery. There's one last checklist to run—the Aircraft Delivery Checklist:

    • Punch List
    • Technical Acceptance
    • Escrow
    • Closing and Delivery

    Punch List. Here's where the due diligence of your title, escrow or insurance representatives pays off. They'll work with you to clear up any liens or estate claims. Similarly, the list of deficiencies and discrepancies your mechanic delivered will have been either rectified or negotiated into a lower price.

    Technical Acceptance. Once the Punch List is complete, the buyer then executes and delivers a Technical Acceptance Certificate to the seller. This says the buyer accepts the condition of the aircraft, subject to "no material damage and/or total loss affecting the aircraft upon or prior to arrival of the aircraft at the delivery location." The deposit usually becomes non-refundable at this stage.

    Escrow. The remaining purchase price is deposited into the escrow account, and the seller is paid.

    Closing and Delivery. The title is transferred and the aircraft is registered to the new owner, once the new owner insures it. Finally, the aircraft is turned over or delivered to you. Congratulations.

    Considering aircraft ownership? AOPA Aviation Finance will make your purchase experience as smooth as possible. For information about aircraft financing, please visit the website ( or call 1-800-62-PLANE (75263).

    Click here for The Acquisition Checklist: Part One

    This article was originally published by AOPA Aviation Finance Company on March 5, 2019.

  • Tracey Cheek posted an article
    Arc&Co shares top private jet interior recommendations for maximising aircraft resale value. see more

    NAFA member, Arc&Co, shares their top private jet interior trends and recommendations for condition, utility, history and transferability, with the view to maximise re-sale value. 

    Refurbishing or upgrading an aircraft is a very different investment proposition compared to refurbishing a property. Property generally appreciates in value over time, whereas aircraft are fundamentally depreciating assets: outside of very specific and often unpredictable market conditions, aircraft will lose value as they age. Any investment into private aviation needs to be looked at from the point of view of slowing that value loss as much as possible and extracting maximum utility, rather than expecting a positive financial return.

    The most effective way to slow that natural depreciation is to make sure the aircraft is desirable to the market, so that it sells quickly when the client decides that he/she wants to upgrade or generate some cash. Mainstream, sought-after aircraft models in top maintenance condition that have undergone a high-quality cabin refit don’t tend to stay on the market for long (unless they’re unrealistically priced).

    As a potential seller, it’s critical to realise that aircraft that languish with a “for sale” sign for a prolonged period of time tend to be increasingly penalised when it comes to their net realisable sale proceeds. This happens for a number of reasons:

    1/  Your aircraft becomes “marked”: potential buyers take note of how long the aircraft is on the market. They may start to question whether you are serious about doing a deal, or (worse) whether there is something wrong with the aircraft that the sales brochure is glossing over. They may also presume that you will be under time pressure to conclude a deal. The ramifications quickly compound:  in order to put their suspicions to rest the buyer will then be more likely to insist on a more comprehensive and detailed pre-purchase inspection scope than they otherwise might have. This will then almost inevitably lead to more findings that need to be rectified (at your expense), and the buyer will probably be less willing to compromise and more prone to demand price concessions to get the deal done.

    2/  Your aircraft will be led by, rather than lead, the market: if comparable aircraft sell ahead of yours, their selling prices will tend to set the maximum price expectation for your machine in the mind of potential buyers – regardless
    of whether your aircraft is, in fact, of higher quality. You should also keep in mind the fact that like cars, the model year of an aircraft matters. The market may view your aircraft on 1 January differently to how it viewed your aircraft 24 hours earlier.

    3/ Your aircraft continues to incur costs for its upkeep:even while your aircraft remains grounded, it needs to be hangared and looked after. A full mothballing exercise to suspend the aircraft’s scheduled maintenance is generally not practical, because of the time and effort required to de-mothball for a pre-purchase or test flight, so the aircraft needs to be kept flight-ready. This means performing scheduled maintenance, running the engines and systems, undertaking flights regularly and documenting those activities diligently – all of which rack up costs that eat into your aircraft’s net sale proceeds.


    So, when considering how to fit out the cabin of a private jet, it is crucial to make choices that not only align with your current needs and desires, but also take into account your future buyer’s mindset as much as possible. Decisions made now often have a sizeable impact on the future point of sale. The one similarity with selling property is that a well-executed interior should enable the buyer to visualise himself or herself in the cabin with little or no change, rather than having to consider the cost of ripping it all out and starting again.

    We have highlighted four themes that are important to consider when it comes to the perceived value that a well- executed cabin refit generates at the point of sale from
    a buyer’s perspective. Bear in mind that with our use of the term ‘value’, we encompass not only the actual return by way of an increased selling price (which tends to be the exception rather than the rule), but we also mean the impact on the time it takes to sell the aircraft, thereby minimising the detrimental effects of depreciation and time on the market.

    We approached leading experts in the aviation industry and asked them to comment on each theme.

    1/ Condition

    Generally speaking, aircraft in better condition tend to be easier to sell (all other things being equal). A relatively new interior that is in a good condition can markedly increase an aircraft’s appeal, but its impact will be very much subservient to the basic aircraft “metal”: the aircraft’s age, hours and maintenance condition.

    We asked Tobias Laps from Comlux Management AG – a leader in business aviation, transaction and completion services – for his thoughts on the importance of condition.

    Q/ Do you agree with our view on aircraft condition or does the interior become more of a driver of value for large jets and biz-liners?

    A/ On large jets and bizliners, the design of the interior, the layout and materials tend to have a much bigger impact on the buyer’s decision-making than on smaller aircraft where interiors are pretty much pre-determined by the manufacturer with limited scope of individualisation. In our experience, when buyers walk onto an aircraft, they typically know within the first few minutes whether the interior will work for them or not. If they don’t like the interior at all, they will often walk away from the deal. If there are only certain aspects of the interior that they don’t like, they will then have to decide whether changing those aspects would be worthwhile. It is at this point that they weigh up their view of the basic aircraft, the “metal” compared with the cost of changing the interior to better suit their needs: if the “metal” is relatively new, in good condition, and is worth significantly more to the buyer than the cost of the interior upgrade then that is what will tend to drive the buyer’s decision-making.

    But it’s important to bear in mind that this interplay between the technical and the cosmetic depends very much on the specific details of the aircraft.

    Q/ What are the most important points that a prospective seller should be aware of to give a buyer a first-class impression of the aircraft’s condition?

    A/ Ideally, you would have chosen an interior layout with resale value in mind well before the actual sale: mainstream colour and veneer choices. In terms of specification, wireless connectivity is a trend, whereby passengers can connect their own devices while on board – an added bonus is that upgrading a wireless entertainment system is easier because the interior does not have to be removed to re-wire components.

    Regardless of layout and specification, the first thing you must do when it comes to selling is prepare to impress the principal’s technical representatives. Make sure the maintenance records are up to date, well-organised and presentable and the aircraft is clean and fully serviceable. It is a very good idea to clean the landing gear, bays and externally-accessed compartments. Only after the representative has examined the technical condition of the aircraft and records and been satisfied will the principal typically come to assess the interior and overall cosmetic condition and make the final decision.

    The next step to be taken, once the aircraft has satisfied the technical expert, is to prepare for the principal: the exterior should be spotless, and the flight deck and cabin should be deep-cleaned, including the galley, lavatories, carpet and sidewalls; everything should look fresh and up-to-date. Soft goods and furnishings should invite the principal to visualise himself or herself using the aircraft.

    We also asked Iain Houseman from Elit’Avia – a private jet company specialising in aircraft sales, management, charter and lease as well as lifestyle concierge and travel booking – for his thoughts on the importance of condition.

    Q/ How important is the quality of the interior to an aircraft acquisition vs the aircraft’s age, hours and maintenance condition?

    A/ I think it depends; the interior will be a lot more important if the aircraft is older. If it’s a newer aircraft, then the interior is usually still in pretty good shape and, in that case, it comes down to how appealing it looks to the buyer. If the interior has been designed in a way that appeals to a limited group of people (e.g. red leather seats or a carbon fibre interior instead of veneer) this can be a deal breaker, because buyers will have to spend time and money to change it.

    For older aircraft, the interior condition can be important for the same reasons – if the interior has recently been redone or is in good condition then the aircraft is more appealing, because it doesn’t need significant rework. Additionally, there is a need to understand the current technology systems and the proximity of major inspections for the aircraft that will allow upgrades to be incorporated and save considerable costs. For example, we estimated a major inspection for

    an owner’s aircraft of $1.1 million and got the cost down to just under $800,000 – and managed to include some key avionics upgrades, internal improvements, and soundproofing enhancement. This proved very useful in getting the aircraft ready for sale.

    To conclude, yes the interior is important, but increasingly so are the technological communication suites and entertainment systems, as well as the cabin’s in-flight environment.

    2/ Utility

    The first consideration is, of course, to have an aircraft that does what you want it to do in terms of the cabin layout, amenities, entertainment, connectivity, privacy, etc. However, it is also important to think about the end buyer – how likely is it that your aircraft will be able to meet their needs as well? The most value-enhancing upgrade options tend to be the ones that result in a demonstrable enhancement to utility: for example, they enable the aircraft to fly longer distances; they certify the aircraft to land at certain airports, in certain countries or on more efficient routings; they allow full in-flight connectivity for all users including streaming live; or they have different zones for privacy/ rest/work for principals, entourage and crew.

    We asked Celia Sawyer – who runs her own interior architecture and design firm, and provides private and commercial clients with bespoke, luxury interiors for private jets and helicopters – for her thoughts on utility.

    Q/ What are the things that clients typically look for, from a layout and design point of view, when it comes to evaluating whether an aircraft meets their needs?

    A/ It is different with every client. My Middle Eastern client wanted a lot of gold inside and also wanted the interior to be very opulent, with only the best Italian leathers, a good boudoir to sleep in and a large shower room. A client’s aircraft would be adjusted internally to suit the individual if it was not purchased from new and designed for them personally from the off. Another client of mine wanted no frills, just a contemporary, functional interior with good technology on board; more like a flying board room with a living area next to it that he could work from. So, it really is dependent on the client’s needs and their priorities.

    Q/ How much of a selling point are amenities that might not be for the principal, but strongly appeal to the buyer’s spouse/family/ entourage, such as private family suites, catering facilities, showers, broadband that can accommodate streaming videos/ gaming, additional baggage/stowage space, etc?

    A/ They all want the highest level of technology: that’s something that is always requested, whatever the size of the aircraft. The other amenities on your list are very important to some clients – if they have a family they travel with, they need to have everything available. Of course, it will depend on the size of the aircraft as to whether they can have a shower, or what sort of catering facilities and how much additional baggage space is possible. These design requirements will in turn be driven by what sort of trips they intend to make.

    Q/ What are the top design trends that aircraft owners are choosing?

    A/ I am pleased that my clients are thinking of the environment, with many of them requesting more fuel-efficient aircraft with lower emissions. New and upgraded engine and aerodynamic technology is key in this respect. In keeping with this “green” trend, on the aesthetic side my clients are insisting on lighter-weight interior furnishings and fittings than they may have done previously, but still choosing materials and designs that deliver on comfort, quality and style.

    3/ History

    Buyers prefer to purchase aircraft where the history of ownership, operation and maintenance is simple, well-documented and clear. All of the records – including the installation and certification of the interior, right down to the last detail – should be organised in such a way that a buyer can immediately see and take comfort that everything is in order.

    We spoke to Mr Houseman of Elit’Avia about his views on the history of aircraft and the impact of aircraft records on a sale, asking about his experience in situations where details of the aircraft’s history were poorly organised, as well as situations where a comprehensive and clear suite of documents made for smooth sailing. Mr Houseman comments:

    “In an ideal world, all aircraft purchases would come with the correct documents, such as
    a comprehensive history of ownership and maintenance. Interior installs from the factory are usually well documented, but problems occur in service when the owner decides to change something and does it at their local facility"

    I have seen a number of aircraft that had work done where the paperwork wasn’t in order. This has meant the aircraft could not be moved onto a different registry because you cannot show the history of modifications.

    This is why it is so important for the owner to have an approved operator with quality maintenance and care processes in place to ensure paperwork is properly kept.

    4/ Transferability

    The clarity and completeness of the records are key to the aircraft’s transferability when the time comes to sell, especially if the buyer intends to re-register the aircraft in a different jurisdiction. Different countries have different certification regimes and requirements that do not always overlap: an interior that has been outfitted on a German- registered aircraft under EASA regulations, for example, needs to have the necessary paperwork to allow it to be accepted onto the USA’s aircraft registry under the FAA’s oversight.

    We again spoke to Mr Houseman from Elit’Avia about transferability and asked him the following questions:

    Q/ Is dual certification/release from the major regulatory authorities (FAA/EASA) at the point of installation possible and a practical risk mitigant? How do you go about ensuring that it happens and is it typically more expensive?

    Q/ Is retrospective certification possible and, if so, is it practical?

    Q/ What advice can you give a client who wants to sell an aircraft with, say, an FAA-certified interior, to a European buyer who wants to transfer it to an EASA register?

    Given that the vast majority of private aircraft are built and operated in the US, most will have installations that are FAA-approved. On the flip side, many will have no foreign certification. Therefore, when you go to switch a US aircraft to another jurisdiction such as EASA, it cannot easily be done because the modifications are not EASA- approved – and this can take months to resolve. I saw one case where modifications were done in the US, but the EASA application was not filed, so the aircraft sat for six months getting work done.

    When the owner wanted to put it on an EASA registration, he couldn’t because the EASA approval for the modifications was not complete. He had to put the aircraft on the Isle of Man registry (which accepts both FAA and EASA certifications) and wait a further six months for the EASA approvals to come through.

    I had another situation where a client decided to replace the carpet – it sounds easy, but the carpet was also attached to the seat bases. Burn certification paperwork is required, not only for the carpet, but also for the glue to attach it to the seat base and approval from the seat manufacturer. In total, it took eight weeks for a one-week install!

    In terms of the lessons learned for interiors being installed on new aircraft, you can usually pay the manufacturer to provide EASA certification alongside the FAA’s, because pretty much all the aircraft being built will come with FAA approval on the interior in the form of an STC. There is usually an upcharge for EASA, but from a seller’s perspective, it could make sense to get this for resale purposes.

    It also depends on the model: larger aircraft with an international market would more obviously benefit from more certification to help with resale. However, for smaller aircraft that are predominantly sold in the US, foreign certification may be a nice-to-have rather than a must-have. Multiple certification can be important in older aircraft – if an aircraft has spent its entire life in the US and has had modifications done under FAA STCs that are not EASA-approved then all of the STCs would need EASA approval to import the aircraft onto an EASA registry.

    It’s also important to make the distinction between private or commercial use. The requirements for commercial use vary between countries, so an aircraft that has EASA-only approved modifications could still go on the US registry for Part 91 private operations, but if it’s missing certain equipment mandated specifically by the FAA, it cannot do Part 135 commercial operations. For example, on a Global 6000 requires a $300,000 Crew Force Measurement System to operate under FAA commercial Part 135 rules.


    Upgrading and refurbishing of an aircraft is a significant investment that can strongly enhance your experience whilst on board. It’s important, when planning for the investment, to have a realistic view of the value it creates – a well-executed cabin refit will meet your needs in terms of space, aesthetics, utility and connectivity, as well as have the benefit of appealing to the broadest possible range of potential buyers when the time comes to move the aircraft on. A well-executed cabin refit will not generally result in a positive financial return outside of a very narrow and oft-unpredictable set of market circumstances.

    Doing your homework and enlisting competent expertise is key: an interior refit is a complex project that requires detailed planning and oversight, and strict adherence to a plethora of regulations. Delays and mistakes can be costly and time consuming. You should keep potential future buyers for your aircraft in mind; not just in terms of aesthetics and technology, but also in terms of certification, with the aim being to ensure maximum transferability with minimum headache. Finally, investing in a quality operator is crucial to make sure that paperwork is properly organised and maintained.

    FAA: Federal Aviation Administration, the national aviation authority of the United States, responsible for regulating all activities pertinent to civil aviation in the US, including certifying aircraft for operation and approving modifications to those aircraft.
    EASA: European Union Aviation Safety Agency, the supranational aviation authority for 32 states including all EU members, Switzerland, Norway, Iceland and Liechtenstein.
    STC: Supplemental Type Certificate – the certificate issued by an aviation authority certifying that a major modification to the aircraft e.g. a complete cabin refit has been approved. It is a regulatory requirement to have the correct approval in place that aligns with the aircraft’s registration e.g. EASA-registered aircraft must have EASA approvals.
    Part 91/Part 135: FAA rules that govern aircraft operations for general non-commercial private (Part 91) and commercial charter (Part 135) use. Most countries defer to either these rules or parallel EASA rules.

    Thanks to our contributors: Tobias Laps from Comlux the Aviation GroupCelia Sawyer one of the leading Private Jet Interior Designers and Iain Houseman from Elit'Avia

    This article was originally published by Arc&Co on June 10, 2019.