buying an aircraft

FOR IMMEDIATE RELEASE: July 11, 2024 

Contact: Tracey Cheek 
tlc@nafa.aero  
405-850-1292 

Scott Oshman 
info@oshmanaviation.com 
817-661-0234  

NAFA Welcomes New Member: Oshman Aviation 

Edgewater, MD –July 11, 2024—The National Aircraft Finance Association (NAFA) is pleased to announce that Oshman Aviation has recently joined its network of aviation professionals. Oshman Aviation is an IADA-accredited aircraft dealer that provides aircraft sales, management and consulting services. 

“NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Oshman Aviation to our association,” said Ed Medici, President of NAFA. 

About Oshman Aviation:
Established in 2017 and based in Fort Worth, Texas, Oshman Aviation is an IADA accredited aircraft dealer providing aircraft sales, management, and consulting services. The company specializes in business jets and turboprops, focusing on Beechcraft King Air and Cessna Citation models. Operating as an inventorying dealer, Oshman Aviation acquires and sells aircraft from its inventory while offering global brokerage services to its clientele.

“Oshman Aviation is proud to join NAFA as the industry-leading association for aircraft finance,” said Scott Oshman, Oshman Aviation’s President. “We look forward to partnering with NAFA members and are committed to providing current market data to NAFA members and their clients, facilitating informed decision-making in aircraft transactions.” 

When purchasing or selling an aircraft, assembling a team of trusted and experienced professionals is important for ensuring a smooth and successful transaction. This team should be vetted to ensure the highest ethical standards and levels of experience. Oshman Aviation is dedicated to providing its clients and partners with ethical, comprehensive and value-based services. 

To learn more, visit oshmanaviation.com. 

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for over 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

If an engine upgrade makes sense for your aircraft, you don’t necessarily have to foot the bill up-front. Gerrard Cowan, with AvBuyer, speaks to a selection of industry experts to find out when financing might make the most sense, and how to approach this.

There can be significant benefits to an engine upgrade for business aircraft where they are available. Operational performance is enhanced, fuel consumption lessened, and resale value can be boosted. But how can owners considering an engine upgrade set about financing their upgrade?

This is a complex area, with an owner’s decisions likely to be influenced by a variety of factors, such as their demands for the aircraft in the long-term, the age of the platform, and any existing financing arrangements.

For many business aircraft owners, it could make sense to simply acquire an entirely new aircraft. But for some, a good option is to remove their existing engine(s) and replace it/them with another.

Blackhawk Aerospace is a specialist provider of such engine upgrade work through its XP Engine+ Upgrade program. As of May 2024, the company had upgraded over 1,000 Beechcraft King Air, Cessna Caravan, Conquest and Piper Cheyenne aircraft with factory-new Pratt & Whitney Canada engines.

Edwin Black, the company’s President, explains that the company develops Supplemental Type Certificates (STCs) to take the stock engine out of an aircraft and install a brand- new engine with more horsepower.

“The demand is strong because everyone wants to go faster,” he says. “We are seeing more demand now than we ever have in Blackhawk's 25-year history and it’s because of the convenience of flying private vs commercial, especially when you are flying for your business.”
 

When is it Easiest to Finance an Aircraft Engine Upgrade?

The easiest way to finance an upgrade is “if you don’t have an aircraft already and are in the market, because you can buy the aircraft and engines at the same time and roll them into the same loan,” he suggests.

When you already have an engine, however, it takes more effort to get financing, though Blackhawk has been working with providers who have offered such solutions for just the engine for some time. “Financing helps customers enjoy the benefits of flying faster sooner rather than later,” Black adds.

Pratt & Whitney Canada (P&WC) has worked closely with Blackhawk for over 20 years, explains Geoffrey Corbeil, Executive Director for Commercial Services at the engine manufacturer, highlighting that Blackhawk celebrated its 150th upgrade of a Cessna Caravan in October 2023 with two options available: XP140 and Vy conversions, featuring P&WC PT6A-140 and PT6A-42A engines, respectively.

According to Corbeil, financing options will naturally depend on the owner’s circumstances. But, even when financing is involved, there can be a significant increase in aircraft value, he adds.

More broadly, Corbeil says owners should consider enrolling in an engine program, such as P&WC’s ESP.

Read full article here

This article was originally published by AvBuyer on June 24, 2024.

FOR IMMEDIATE RELEASE: June 27, 2024 

Contact: Tracey Cheek  
tlc@nafa.aero  
405-850-1292 

Tim Pollard 
Managing Member 
(817) 626-7000 
opportunity@apogeefinance.com 

NAFA Welcomes New Member: Apogee Finance  

Edgewater, MD –June 27, 2024—The National Aircraft Finance Association (NAFA) is pleased to announce that Apogee Finance has recently joined its network of aviation professionals. Apogee Finance, founded in 2013 by industry veteran Tim Pollard, provides specialized financial services for private and corporate aircraft transactions, offering comprehensive market knowledge, real-time valuations and streamlined processes.  

“NAFA members facilitate the financing of general and business aviation aircraft on a global scale,” said Ed Medici, NAFA President. “We welcome and support the services Apogee Finance provides that play a role in advancing the interests of NAFA members within the aviation industry.”  

About Apogee Finance: 
Apogee Finance, established in 2013, offers specialized financial services for the private and corporate aircraft markets. The company aims to facilitate efficient transactions in the time-sensitive aviation industry.  

With over 60 years of combined aviation experience, the Apogee team provides:  

• Comprehensive market knowledge 
• Real-time aircraft valuations 
• Personalized services 
• Streamlined paperwork processes
• Competitive rates  

To learn more, visit apogeefinance.com. 

About Tim Pollard: 
For over 30 years, Tim Pollard has been a reputable leader in the aviation industry. With over 900 transactions behind him, Tim is a market expert, passionate about airplanes and fostering exceptional customer satisfaction. After launching Pollard Aircraft Sales in 1993, Tim has continually evolved his company to accommodate customer needs and meet market demands. As a seasoned aircraft sales professional with a comprehensive view of the industry, he understands how difficult it can be to obtain financing for certain aircraft, especially in a timely manner. As a solution, he established Apogee Finance to provide customized and efficient financing options for aircraft dealers, brokers and end users. 

About NAFA: 
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for over 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

Many buyers instinctively want to pay the full purchase price in cash when purchasing an aircraft. While this may seem like the simplest and most expedient option, there are several compelling reasons to consider financing your aircraft purchase instead of liquidating investments to pay all cash. 

In this article, we will explore ten key reasons financing an aircraft can be a smart financial move and how working with experienced aviation finance professionals can help you navigate the process with confidence.  

1. Keep your cash invested 

One of the most significant advantages of financing an aircraft is the ability to keep your cash invested. Selling stocks, cashing in investments and depleting cash reserves can come with big opportunity costs and tax implications. Even if you have enough liquidity to buy an aircraft outright, that money could, over time, likely generate far greater returns if you keep it invested in the market or your business.  

Discussing your plans with your investment advisor first may help you understand exactly what opportunities you may be foregoing and the consequences associated with divesting.  With interest rates spanning the 6% to 7% range, still comparatively low from a historical perspective, the cost of financing will often be less than the expected return you can earn on that cash if invested wisely. 

Additionally, financing can free up that capital for other investments or business opportunities. This can be advantageous for business owners who need to maintain liquidity to seize new opportunities or manage possible future cash flow gaps effectively. Keeping your capital invested in your business or other high-return investments can often yield better financial outcomes than tying it up in an aircraft.  

2. Preserve liquidity for necessary or unexpected ownership costs  

Buying an aircraft involves many more expenses beyond the purchase price, including taxes, registration fees, hangar costs, maintenance, insurance, crewing and more. Paying all cash upfront can leave you cash-strapped when these additional ownership costs arise.   

For example, investing in a comprehensive aircraft maintenance/engine program can provide significant benefits when owning a turbine aircraft. These programs are prepaid hourly services that help make sure your aircraft remains in top condition, which is important for maintaining its value. By keeping the engine hours at a "zero level" through regular maintenance, you can maximize the appraisal value of your aircraft when it comes time to sell.  

Financing preserves liquidity, so you have cash on hand for this as well as any future upgrades or unforeseen issues. This financial flexibility is important, especially in the aviation industry, where unexpected costs can be significant.  

3. Preserve liquidity for risk mitigation  

Consider how cash on hand can help cover unexpected expenses outside of the aviation world. Individuals should think about how they will deploy their cash reserves if a potential issue arises that might deplete their remaining liquidity. For example, a reversal of fortune related to changing economic circumstances or paying for an unexpected family health event that could significantly change your financial situation.  

Financing up-front could potentially avert the need to sell the aircraft or obtain cash-out financing in order to raise funds to address unforeseen events down the road. Note that obtaining cash-out financing after the fact is not guaranteed due to many factors, such as collateral depreciation. Furthermore, there is rate risk associated with cash-out financing at a future date down the road. Last, economic downturns may impact your financial capacity and future ability to obtain cash-out financing.   

Business owners may need to maintain cash reserves to satisfy liquidity covenants and fulfill any prior financing commitments, such as lines of credit or long-term financing obligations. When considering the interest rate offered to your business, it’s important to recognize that having a cash cushion serves as a buffer to cover these potential future requirements.  

4. Tax advantages of financing  

The interest on an aircraft loan is often a tax-deductible expense, and financing lets you take advantage of not only depreciation deductions but also interest expenses, which offset income.  

Under current bonus depreciation rules, you may deduct for eligible aircraft, up to 60% of the purchase price in the first year, which is further enhanced by the addition of those interest expenses. For business aircraft, these benefits can be substantial, making financing an attractive option from a tax planning perspective.  

5. Easier to resell 

Keeping your cash invested provides greater flexibility if you need to resell the financed aircraft. You won’t be pressured to liquidate the aircraft quickly, often at a discount, to recoup the capital invested in the aircraft. This flexibility can be beneficial in a volatile market where aircraft values can fluctuate.

6. Easier than you think 

Many buyers dread the paperwork and hassle of financing an aircraft. However, working with an experienced aviation lender, like the professionals at the National Aircraft Finance Association (NAFA), makes the process easier. From brokers, lenders, accountants and more, NAFA members understand aircraft purchases and can walk you through the process. This knowledge can streamline the acquisition process, especially making it easier and less stressful for first-time buyers.  

7. Manageable monthly payments 

Aircraft financing typically offers manageable monthly payments, which can be easier to handle than a large lump-sum payment. This lets you spread the cost of the aircraft over time, making it more affordable and less of a financial burden. Fixed interest rates on loans can also provide predictability in your financial planning. 

8. Potential for better aircraft 

Financing can enable you to leverage your cash to buy a better aircraft than you could afford with cash. A larger down payment often translates to better interest rates and terms. This can mean better performance, newer technology and greater comfort, which can enhance your flying experience and potentially increase the aircraft’s desirability in a future resale environment. By spreading the cost over time, you can access higher-quality aircraft that better meet your mission.  

9. Avoid unwarranted tax consequences  

As broadly discussed above, paying cash for an aircraft often requires liquidating investments, which can trigger capital gains taxes and reduce your overall investment portfolio. Financing lets you avoid these tax implications and keep your investment portfolio intact, continuing to grow and generate returns. This can be important for individuals nearing retirement or those with significant investment portfolios.  

10. Professional guidance and support 

Working with specialized aviation finance professionals can provide valuable guidance and support throughout the financing process. These experts understand the unique parts of aircraft financing and can help you navigate the complexities, ensuring you get the best terms and conditions for your loan. This professional support can make the financing process smoother and more efficient.  

Lenders have developed standardized compliance checklists and processes to ensure judicious steps are taken before the sale is finalized. These steps include but are not limited to confirming the aircraft's airworthiness is certified, verifying that annual inspections have been completed, review of Appraisal, pre-buy inspections, title searches and escrow instructions related to the sale. Professionals will ensure these forms and procedures are properly completed throughout the process. By following these established protocols, you can take flight in a timely manner while remaining compliant with all legal requirements. 

Conclusion

While paying cash for an aircraft may seem like the simplest option, financing offers many advantages that can make it a smarter financial decision. From preserving liquidity and taking advantage of tax benefits to keeping your cash invested and maintaining financial flexibility to pay for aircraft expenses and taxes, financing can provide significant benefits for aircraft buyers.  

By working with experienced aviation finance professionals, like NAFA members, you can navigate the financing process with confidence and make your dream of aircraft ownership a reality.  

The best financing choice depends on your unique financial situation, tax status, liquidity needs and aircraft usage. Consult your financial advisor, but for many aircraft buyers, financing is the smartest way to make airplane ownership a reality.  

About Keith Graham:  

Keith Graham is Senior Vice President at Salem Five Bank in Georgetown, Massachusetts, where he has served as Manager of the Aviation Finance Division for almost 20 years. Keith has over 35 years as a licensed pilot and aviation financial professional.  

About NAFA:  

The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for over 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 


Disclaimer:

The information given in this article is for general informational purposes only and is not professional financial, tax or legal advice. While we strive to provide accurate and updated information, it is not a substitute for professional advice tailored to your specific financial situation. Before deciding on the purchase or financing or an aircraft, we strongly recommend consulting with a qualified financial advisor, tax professional or legal expert who can provide guidance based on your individual circumstances. Neither the author nor the publisher assumes any responsibility or liability for any financial decisions made based on the information in this article.  

FOR IMMEDIATE RELEASE: May 28, 2024 

Contact:
Tracey Cheek  
tlc@nafa.aero  
405-850-1292 

Marcelo Abello 
intljettraders@aol.com 
954-491-1941 

NAFA Welcomes New Member: International Jet Traders 

Edgewater, MD – May 28, 2024—The National Aircraft Finance Association (NAFA) is pleased to announce that International Jet Traders has recently joined its network of aviation professionals. International Jet Traders services clients worldwide by selling and acquiring jets, turbo-prop airplanes and turbine-powered helicopters.   

“International Jet Traders joining NAFA is a step forward in advancing our mission to improve and facilitate the financing process to support aircraft buyers,” said Ed Medici, NAFA President. We welcome International Jet Traders to our growing organization and enhancing opportunities for all our members.”  

About International Jet Traders: 
Marcelo Abello, chief executive and founder of International Jet Traders, has specialized in the sales and acquisition of jet aircraft and helicopters since 1984. Marcelo formed International Jet Traders in 1991 to satisfy worldwide buyers and sellers of jets, turbo-prop airplanes and turbine-powered helicopters. Today, the company provides personalized aircraft brokerage and acquisition services to an ever-expanding international client base.  

Marcelo has built a reputation for integrity and customer-centric operations that focus on short and long-term client interests. Since the inception of International Jet Traders, the company has handled sales and acquisitions of over 500 aircraft. 

Sonya Sheldon, who assumed the role of Partner at International Jet Traders in January 2024, adds experience and technical knowledge to the company's leadership team. With over three decades of dedicated service in the Business Aviation sector, including notable roles as Vice President of Sales in the pre-owned aviation industry and as a Flight Test Engineer and Senior Sales Engineer at Gulfstream Aerospace, Sonya's arrival aligns seamlessly with International Jet Traders' commitment to delivering top-quality performance and personalized service. 

International Jet Traders focuses on corporate aircraft sales and acquisitions. This specialized approach ensures a commitment to negotiating contracts that prioritize the client’s best interests. With access to the latest technology and market research, the company possesses correct and updated information on the pricing and availability of every registered airplane worldwide, enabling it to seize key opportunities that maximize clients' return on investment.  

The company works closely with a select clientele to help them achieve their corporate aviation goals, fostering long-lasting business relationships that provide value to their client’s aviation departments. The company’s success is clear in its impressive track record, with much of its business coming from repeat customers. The team leverages its industry knowledge to identify strategic opportunities quickly and cost-effectively while maintaining high ethical standards.  

For more information, visit http://www.intljettraders.com/. 

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for over 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

FOR IMMEDIATE RELEASE: May 15, 2024 

Contact: Tracey Cheek 
tlc@nafa.aero 
405-850-1292

Matthew Scantlin 
SVP, Director of Commercial Banking 
405-260-9836 
M: 405-641-0456 
MScantlin@prism.bank 

 
NAFA Welcomes New Member: Prism Bank 

Edgewater, MD –May 15, 2024—The National Aircraft Finance Association (NAFA) is pleased to announce that Prism Bank has recently joined its network of aviation professionals. Prism Bank offers personalized lending solutions and consultation services to help clients achieve their aviation aspirations.   

“NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Prism Bank to our association,” said Ed Medici, President of NAFA.   

About Prism Bank: 

Prism Bank has been a trusted institution serving central Oklahoma and beyond since 1909. Their dedicated team and entrepreneurial culture have contributed to their customers’ success for over a century. The bank's service offerings include several areas of specialization, and it is a leader in aviation finance. 

Prism Bank understands the intricacies of aircraft ownership. Whether you're an aviation enthusiast or an experienced pilot, its dedicated Aviation Finance team will find a solution to turn your dreams into reality. 

Prism Bank’s approach goes beyond traditional lending. They create a personalized pathway to ownership that aligns with your financial goals. 

• Personalized Lending Solutions: Tailored lending solutions perfectly fit your financial situation and aviation aspirations. 

• Consultative Approach: The Aviation Finance Team guides you throughout the process, understanding your financial position and aircraft needs to simplify the complexities of financing. 

• Exceptional Service: Their commitment to outstanding customer service ensures they meet your needs from the initial consultation to the moment you take ownership. 

• Central Access to Title Operation: Located near the FAA’s Aircraft Registration, Prism Bank has unparalleled access to aviation industry professionals and support services. Convenient access to these services, as well as the FAA titling office, can streamline the process of purchasing your aircraft. 

• Well-Connected Lending: Their fast turnaround time and competitive rates aren’t their doing alone. They nurture and maintain professional relationships with aircraft brokers, legal professionals and state offices to create an exceptional client experience. 

• Seamless Process: Their experience originating these loans ensures that financing an aircraft is as seamless and hassle-free as possible. They guide you through every step of the process with outstanding service and support, so you get the best solution for you without delay. 

For more information, visit https://prism.bank/. 

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for over 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

Every US state has its own combination of sales and use taxes, property taxes, and sometimes other surcharges it assesses on business aircraft based in, or even just flying to, the state. So how do you know where to arrange delivery of an aircraft to make best use of these? AvBuyer's Chris Kjelgaard asks the experts...

In addition to accounting for sales and use taxes on business aircraft, some states have generous exemptions too, so it’s fair to say that a tax consultant should always be one of the first team members hired by business aircraft buyers in the US to ensure the purchase is handled professionally, smoothly, and concludes successfully.

The most important thing is to call [the tax advisor] first, so you don’t make bad decisions, Daniel Cheung, Principal of aviation accountancy firm Aviation Tax Consultants highlights. “Make your tax planning proactively – call in a tax consultant in advance,” before the aircraft transaction gets under way.

Another reason why a tax consultant should be a core member of any US-based business aircraft acquisition team is that “the [US] tax code is not friendly in terms of complexity,” adds Cheung. “You have to deal with the IRS, the FAA, and even the Securities and Exchange Commission if you’re a public company.”

Cheung explains “proper planning obviously is the key” for any owner buying a business aircraft to minimize their tax exposure to the purchase. Assessments of sales and use taxes depend on where the aircraft is based or hangared, “particularly if the aircraft lives in two or three places”, in which case it may be subject to sales and use taxes in more than one state.

For instance, he notes, “Chicago, Illinois is extremely difficult in terms of tax, but Gary, Indiana [just over the Illinois-Indiana state border a few miles south of Chicago] is not.”

According to Cheung, “80% of the tax planning is based on IRS requirements”. These requirements should be a more immediate concern for the buyer’s purchase advisory team than compliance with FAA regulations, he says, because compliance is ongoing but the tax payment is one-time.

“So the primary discussion is focused on income tax requirements and ownership structure, because the key to the planning is ownership structure”, says Cheung.

“Who owns the aircraft is the key in terms of getting the bonus depreciation rights” which can be offset against tax liability, and “the corporate structure of the client will determine the structure of the ownership of the aircraft”.

Read full article here

This article was originally published by AvBuyer on May 8, 2024.

There are several basic things to know before buying an aircraft, and some less obvious areas too. Having asked the experts to highlight some of these in his previous article, Chris Kjelgaard continues with another five...

After establishing the need for aircraft buyers to pick the right broker, add the right experts to the acquisition team, set and maintain an adequate transaction timeline and meet the financier’s documentation needs, there are other things that should be known before proceeding to buy a business jet.

Did you miss Part 1 of this article? Find it here.

Duncan Aviation’s Sales and Acquisition Specialists Tim Barber and Leah Alexander, and OGARAJETS’ Head of Global Sales, Dustin Cordier share some more things buyers should be clear about...

1. Insist on a PPI and a Full Aircraft Logbook Review

During the height of the post-Covid sales boom, many first-time business aircraft buyers accepted sale terms which did not allow for any pre-purchase inspection of the aircraft and its maintenance records to be performed.

However, every responsible broker and aircraft technical inspector would never recommend that a buyer allow a seller to dictate this. If allowed, it effectively means the buyer is agreeing to buy an aircraft sight unseen without any knowledge of the aircraft’s condition.

At the very least, the buyer should insist that the technical inspector representing them in the purchase negotiations be given full access to the aircraft’s logbook, says Cordier.

The logbook contains the aircraft’s full maintenance history because it should contain full details of each fault found, repair performed and overhaul conducted on the aircraft, including – for US-registered aircraft – a copy of every FAA Form 337 recording major damage and repair.

For the seller to offer the buyer access only to the maintenance tracking software record for the aircraft is not sufficient. “Using maintenance tracking software for that review is like watching a movie version of the book,” Cordier says.

Read full article here

This article was originally published by AvBuyer's Chris Kjelgaard on April 23, 2024.

Financing is a complex area for aircraft owners to navigate. Beyond the interest rate involved, how can you tell if you’ve got a good deal that’s fair to both parties? Gerrard Cowan asks aviation finance experts for their tips.

Aviation lending is considered a specialty in the banking industry. And, since not all banks offer the service to their clients, loans vary in terms of how favorable they are – but they are almost always structured to mitigate risk for the lender.

“This means banks include covenants, clauses, interest rates, and terms that are favorable to the lender until the note has been repaid,” Chris Lee, President of the Aircraft Division at 1st Source Bank says.

Still, “competition in the marketplace helps to keep the general terms of many deals fairly close to one another”.

There are a range of factors that could influence a bank’s ability to offer favorable loans to individuals or businesses, Lee adds. A good bank will evaluate each aviation finance deal individually, based on many factors. Some deals are more attractive to banks than others. 

Aircraft usage is important, he says, because some aircraft loans are made for Part 135 commercial uses while others are for personal and business transport (Part 91).

On top of this, there are factors that are common for essentially any financing deal, not just aviation. For example, the applicant’s credit score will have an impact, as will income and employment history, debt-to-income ratio, loan-to-value ratio, and any collateral involved.

Read full article here

This article was originally published by AvBuyer on April 15, 2024.

Likely we have all been involved in an aircraft transaction in which a new party pops up at the last minute that has not previously been part of the transaction process or known to be involved in the transaction. These last-minute revelations can affect transaction complexity and the parties’ ability to maintain the integrity of the transaction. Since spring brings the excitement of a new baseball season, a baseball analogy seemed an appropriate title for an article about transaction integrity. Who is responsible for maintaining transaction integrity? 

Closing and funding aircraft transactions can become a hectic process, as all the parties work toward a successful conclusion often expected in a very short timeframe. While all desire a successful closing of the transaction, each party has its own motivation and interests. The seller wants to sell the aircraft and get paid, the buyer wants to acquire the aircraft, the brokers want to ensure their clients are buying/selling the aircraft at the right price, the attorneys want to make sure the loan documents are correct, the lender wants to ensure that they have a quality transaction where their lien is perfected, and the escrow agent wants to ensure that the closing process proceeds smoothly and timely.

At Huntington National Bank, we often ask, “Who owns risk?” Our standard answer is, “We all do.” It is much the same in aircraft transactions. All the parties have the responsibility to maintain the integrity of the transaction. Each party needs to understand who is involved and their role in the transaction. It’s not just the escrow agent’s responsibility to be diligent and understand the transaction parties and the flow of funds.  Everyone must do their part to ensure transaction integrity is maintained throughout the process.

To ensure transaction integrity, here are some helpful tips from a lender’s perspective:

1. Know who all the parties to the transaction are to ensure there are no surprises at closing.
2. Communicate throughout the transaction process. Don’t just assume that because you understand what is going on or who is involved that all the parties to the transaction have clarity.
3. Don’t just rely on the escrow agent to vet all the parties. While the escrow agent is expected to do appropriate due diligence to ensure transaction integrity and the proper flow of funds, all the other parties should do their own due diligence as well. The last thing anyone wants is for some surprise to pop up on the day of closing.
4. Trust, but verify. Bad actors are becoming more and more sophisticated. The more rushed you feel, the more likely a mistake will be made. Take the time to verify all aspects of the transaction.

The answer to the question “Who’s on First?” is We ALL ARE. All parties to a transaction should work together to move the process from first, to second, to third, and hopefully all the way to home and a successful closing. When all the parties communicate effectively and are diligent in their efforts, transaction integrity is made easier and helps eliminate the potential for bad actors to insert themselves into the middle of a closing. As members of NAFA, we all bear the responsibility to ensure that the integrity of aircraft transactions is maintained to protect the clients who count on our services and products.

Greg Wallis

Vice President-Portfolio Management Team Lead

Huntington National Bank

Disclaimer: The views expressed in this article are intended for informational purposes only and should not be construed or used as legal advice nor as a solicitation of any type. Readers are advised to consult with qualified legal professionals regarding their specific circumstances and legal questions and with respect to the currency of this information. The author, the author's employer and NAFA disclaim any liability for any loss or damage incurred by readers who rely on the information provided in this article.

There are several basic things to know before buying an aircraft, and some other less obvious areas too. Over a two-part article, a selection of leading brokers reveal to Chris Kjelgaard what those areas are...

Those planning to buy a business aircraft usually believe they know what kind of plane they want, how much they are prepared to pay for it, and the types of mission they mostly expect to be using the aircraft for.

Inexperienced buyers, particularly those who have never purchased a business jet before, often do not realize there are several other very important factors they must weigh up carefully before making a final decision.

Buyers should fully account for these when deciding which aircraft to buy – or indeed, if they might be better served chartering an aircraft or buying a fractional share, reputable brokers agree.

Following are some key areas to consider ahead of your acquisition that will help ensure you don’t make a purchase you later regret...

1. Pick the Right Jet Management/Brokerage Partner

Will you have your own Flight Department operate the aircraft, or will you place it with an aircraft management company who may be able to help offset some of the operating costs through charter revenue when you are not using it?

If you are planning to have an aircraft management company operate the aircraft for you, it’s important to do some due diligence as to which management company you’ll use, says Dustin Cordier, Head of Global Sales for Atlanta- based OGARAJETS.

Read full article here.

This article was originally published by AvBuyer on March 22, 2024.

There are signs that the used aircraft market has hit bottom.

Anyone who makes their profession within the business aviation industry is well aware of what happened to seemingly everything we touch relative to business aircraft as a result of the pandemic. During that time of uncertainty, everything became scarce and expensive.

Now, nearly four years later, we all can likely agree that things have loosened up for a vast majority of us who work in and around business aircraft—to a certain degree. I cannot speak to all sectors of the industry, but I can speak to the aircraft resale market. Let’s look back and also forward to see where it puts us now.

Depending on the source of the data chosen, it will show in approximate terms that the supply of for-sale preowned business aircraft was at an all-time low in early 2022, at approximately 2 percent of the fleet. It hit a high of about 6 percent four months ago and, at present, it is just off that high. What we have defined as “normal” in years past is approximately 7 to 8 percent of the fleet for sale at any given time. But it makes me wonder: is 6 percent the “new normal”?

Read full article here

This article was written by Leading Edge Aviation Solutions and originally published in Aviation International News AINsight on March 22, 2024.

FOR IMMEDIATE RELEASE: March 6, 2024 

Contact: Tracey Cheek 
tlc@nafa.aero  
405.850.1292

Joseph Dail 
Finance & Insurance Specialist 
406-FLY-1-NOW 
C: 336.380.0447 
joseph@lifestyleaviation.com 
www.lifestyleaviation.com 

 
NAFA Welcomes New Member: LifeStyle Aviation 

Edgewater, MD –  National Aircraft Finance Association (NAFA) is pleased to announce that LifeStyle Aviation has recently joined its network of aviation professionals. Lifestyle Aviation is dedicated to broadening access to aviation for individuals and businesses, offering innovative ownership and financing options that make owning a plane more affordable and attainable.  

“NAFA members facilitate the financing of general and business aviation aircraft on a global scale,” said Ed Medici, NAFA President. “We welcome and support LifeStyle Aviaiton’s services that play a role in advancing the interests of NAFA members within the aviation industry.”  

About LifeStyle Aviation: 
LifeStyle Aviation is committed to realizing the dream of flight for everyone by providing access to modern, innovative aircraft for personal and business use. Beyond aircraft sales, the company fosters a community of aviation enthusiasts passionate about flying.   

LifeStyle Aviation distinguishes itself through its specialization in the Diamond Aircraft line, known for its cutting-edge technology, safety features and efficiency. LifeStyle Aviation is also dedicated to empowering pilots through comprehensive training programs offered through its network of flight schools, ensuring pilots of all skill levels have the knowledge and confidence to take to the skies safely.  

In addition to aircraft sales and training, LifeStyle Aviation serves as a hub for aviation enthusiasts. The company hosts events, seminars and fly-ins where pilots can come together to share their passion for flights and connect with others who share their love of the sky.  

Joseph Dail, Head of the Finance and Insurance Department, plays an important role in realizing aviation dreams. He has expertise in aviation financing and insurance and ensures customers have access to flexible and affordable options for purchasing and protecting their aircraft.  

Whether seeking financing to purchase a first plane or the right insurance coverage to protect your investment, Joseph and his team guide clients through every step of the process. With a commitment to innovation, safety, and community, LifeStyle Aviation doesn’t just sell planes; it helps people discover the joy of flight and make it part of their lifestyle.  

For more information, visit lifestyleaviation.com.   

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

FOR IMMEDIATE RELEASE: March 8, 2024 

Contact: Tracey Cheek  
tlc@nafa.aero  
405.850.1292

Eric Hammer 
President 
336.553.8888 
ehammer@integrityjets.com 
integrityjets.com 

NAFA Welcomes New Member: Integrity Jets    

National Aircraft Finance Association (NAFA) is pleased to announce that Integrity Jets has recently joined its network of aviation professionals. Led by industry veteran Eric Hammer, Integrity Jets is a boutique aircraft brokerage firm that provides brokerage, acquisition and market intelligence services.   

NAFA members form a network of aviation finance services who diligently and competently operate with integrity and objectivity throughout the world,” said Ed Medici, NAFA President. “We’re excited to welcome Integrity Jets to our growing organization. Their services enhance NAFA’s available offerings, and we support their services to advance our members.” 

About Integrity Jets: 
Integrity Jets connects buyers and sellers of private aircraft. The company offers comprehensive brokerage services tailored to each client’s needs.   

Integrity Jets understands that buying or selling an aircraft is a complex and time-consuming process, and engaging with Integrity Jets ensures clients experience the most stress-free, efficient and financially beneficial transaction possible. The company is committed to delivering exceptional customer service and meeting each client’s unique requirements and preferences. 

About Founder Eric Hammer:  
With 33 years in the aerospace industry, Eric Hammer recently launched Integrity Jets. For the past 22 years, he has specialized in representing buyers and sellers of business aircraft.  

Hammer’s mission is to establish Integrity Jets as a trusted, strategic and tactical partner for clients in acquiring and disposing of their business aircraft.  

Hammer’s background includes: 

• Overseeing the sale and acquisition of over 225 turbine-powered aircraft. 

• Leading pre-owned aircraft sales efforts at Embraer for nearly a decade. 

• Managing new and used Citation and Caravan sales at Cessna for eight years. 

• Serving for 11 years in NASA’s Mission Control Center in Houston as a Flight Dynamics Officer for the nation’s space program.  

• Holding a commercial, multi-engine, instrument-rated pilot certification.  

• A 20-year veteran of the Navy Reserve 

• Earning a Master’s Degree in Aerospace Engineering 

• Achieving the title of five-time Powerlifting National Champion.  

For more information, visit integrityjets.com.   

About NAFA:  
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

The buyer’s and seller’s view of what a Pre-Purchase Inspection of a business aircraft should include often differs, making negotiation a sensitive matter. To simplify matters, buyers should ensure their expectations are reasonable, Chris Kjelgaard learns...

In most purchases of pre-owned business aircraft, Pre-Purchase Inspections (PPIs) are necessary and highly important initial tasks.

Performed at the buyer’s request, the PPI is carried out to assess the physical condition of the aircraft – allowing the buyer and seller to then negotiate what (if any) repair or refurbishment work is needed to satisfy the buyer’s condition expectations – and ensure the documentation of the aircraft’s maintenance and operating history is complete.

An obvious basic first step for would-be buyers is to determine what they expect the PPI to accomplish. Clearly, it should either satisfy the buyer that the aircraft is in a condition which allows them to complete the purchase, or produce findings or repair/alteration actions which the buyer can then ask the seller to undertake before the transaction is completed.

Ultimately, however, the buyer’s expectations of the PPI’s scope should be reasonable enough to prevent the seller balking completely, creating an unresolvable hurdle causing the deal to founder.

Setting Realistic Aircraft Pre-Purchase Inspection Expectations

While for inspection-cost and other reasons the seller and buyer may not agree on what each wants the scope of the PPI to include, their differences should be resolvable by means of agreeing to adopt the recommendations made by an independent third-party.

For example, in their pre-buy negotiations, the most common way for both seller and buyer to achieve consensus is to have the OEM or third-party MRO service center hosting (and often conducting) the PPI first to provide a recommended PPI report.

Lee Rohde, President & CEO of Essex Aviation, says the MRO facility should have a specific recommended PPI report for every different aircraft model it handles, based on the manufacturer’s own inspection and maintenance recommendations and accounting for every unique aspect of that model.

The report will also take account of the service center’s own findings on the individual aircraft’s condition, having performed its own preliminary inspection of the aircraft in question.

Read full article here

This article was originally published by AvBuyer on February 28, 2024.