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buying an aircraft

  • NAFA Administrator posted an article
    Buying a Private Jet? Great! – Now How Are You Going to Crew It? see more

    NAFA member, Stephen Hofer, President of Aerlex Law Group, discusses what you need to know when buying and operating a private jet.

    These are boom times for private aviation. Record sales of both new and pre-owned aircraft. Unprecedented levels of flying in fractional, membership, jet card and charter programs. But that doesn’t mean that there aren’t some storm clouds looming on the horizon.

    In the United States, would-be buyers who hope to take advantage of the last year of 100% accelerated depreciation are rushing to complete their acquisitions and get their newly acquired airplanes into active business usage before December 31, 2022 are facing unusual challenges. For one thing, most maintenance, repair and overhaul (MRO) facilities and other companies having aircraft inspection capabilities already have fully booked their slots for the remainder of the year. Buyers who are insistent on completing a careful and comprehensive pre-purchase inspection as a pre-condition to accepting their airplanes will find it increasingly difficult to find FAA-certificated aircraft and powerplant (A&P) mechanics who can perform the necessary evaluations and then sign off on a return to service. A similar problem faces buyers who may want to hire independent technical experts to oversee those inspections on the buyers’ behalf. Many tech reps already are fully committed through the end of the year.

    Another problem facing buyers may not prevent them from closing on their purchases, but may have a significant impact on their ability to use their airplanes after they take delivery, both before and after the new year, and that’s the ongoing shortage of qualified pilots to fly those corporate and private aircraft.

    Read full article

    This article was originally published in BusinessAir Magazine, October 2022, Volume 32, No. 10.

     

  • NAFA Administrator posted an article
    NAFA member David G. Mayer discusses the value of due diligence in aircraft transactions. see more

    NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, discusses the value of due diligence in aircraft transactions.

    The value of due diligence exists in the eyes of the beholder. Their place in an aircraft transaction informs their diligence criteria, inquiries, and judgment.

    Most financiers consider the five Cs (character, capacity, capital, collateral, and conditions) and investigate each element before closing a loan or lease. Sellers ensure that they transfer good titles to qualified buyers. Aircraft buyers traditionally perform comprehensive due diligence in all phases of a purchase transaction.

    However, in the current seller’s market, buyers that require excessive or even customary diligence may cause a seller to kill the deal and move on to another buyer waiting in the wings that may not require the same level of diligence. As a result, some buyers sacrifice diligence to buy an airplane, any airplane.

    To initiate due diligence and avoid costly mistakes, buyers should steel themselves; it is hard to be objective, especially for first-time buyers, during the potentially emotional journey of seeing beautiful time machines for sale. Buyers should also engage experienced aviation professionals, including an aircraft broker, technical consultant, aviation counsel, insurance broker, aviation tax expert, escrow company, and FAA counsel.

    Starting when a buyer first seriously considers purchasing an aircraft, the buyer should spool up professionals to guide the buyer through the buying experience, in five diligence areas along with financing.

    Read more

    This article was originally published by AINOnline on November 11, 2022.

  • NAFA Administrator posted an article
    Private Jet Brokers: What Do They Do & When Do You Need One? see more

    Those new to the world of private aviation may notice that the term “broker” comes up fairly frequently and can be used to describe various roles. In the most general terms, a broker refers to any person or firm that facilitates transactions between two parties. Though this definition is still broadly true for the private aviation industry, there are multiple types of private jet brokers who offer distinct areas of expertise and fill different roles depending on the particulars of the situation.

    In short, the term “broker” can have multiple meanings within the private aviation industry. Therefore, it’s important to understand the distinction between these different types of brokers to ensure that you identify a candidate with the experience, reputation and specialized skills you need.

    In this article, NAFA member Thomas W. Mitchell, Executive Vice President of Essex Aviation will offer insight into the various types of private jet brokers, how to identify which type of broker you might need and what skillset to look for when choosing a broker. We’ll also explain when and why it might make sense to retain the services of a professional private aviation consultant rather than — or perhaps in addition to — a traditional broker.

    Read full article here

    This article was originally published by Essex Aviation on April 26, 2022.

  • NAFA Administrator posted an article
    Lessons in Strategic Growth see more

    NAFA member, Peter Antonenko, Chief Operating Officer of Jetcraft, discusses strategic growth in business aviation. 

    This year marks Jetcraft’s 60th anniversary, a significant milestone that we’re extremely proud to have achieved. A huge part of Jetcraft’s success to date has been our grit and determination. The journey to 2022 has not been a straightforward one, but we have emerged from the pandemic stronger than ever before and marked a record-breaking year for pre-owned aircraft transactions across the industry.

    As we reflect on our 60-years’ experience, there are several ways in which we believe a business can build strategically and develop a global presence:

    Firstly, ensuring you select the right people is critical, you need to have confidence in your team and trust their abilities. Success in this industry isn’t just about having excellent salespeople but having outstanding individuals who support the organization as a whole. At Jetcraft, our experienced financial, legal, branding and marketing teams are vital to guaranteeing seamless transactions for the benefit of our clients.

    Read full article here.

    This article was originally published by Jetcraft on March 24, 2022.

  • NAFA Administrator posted an article
    Consultants – Who Needs Them? see more

    NAFA member, David Wyndham, Vice President – Consulting Services, Asset Insight, LLC, discusses the importance of using a consultant in this Asset Insight podcast.

    Subjects covered include:

    • The value brought by a Consultant to the decision-making process.
    • Why a Consultant may be viewed as an “aircraft therapist”.
    • What to consider when selecting a Consultant.
    • Why a Consultant should not be viewed as a decision-maker.
    • How to identify the right Consultant for an assignment.
    • Making sure the Consultant understands your expectations.
    • Compensation strategies when hiring a Consultant.

    This podcast was originally published by AvBuyer Magazine in December 2016.

  • NAFA Administrator posted an article
    Used Aircraft Maintenance & Marketability Analysis – April 2022 see more

    After 21 consecutive monthly decreases, business aircraft inventory increased during April while Ask Prices were nearly one-third higher compared to December. Which models were affected the most? NAFA member and President/CEO of Asset Insight, LLC, Tony Kioussis explores…

    Listings for Asset Insight’s tracked 134-model fleet are still down nearly 18% Year-to-Date (YTD), but the 726 listed aircraft at the end of April represented a 4.0% rise – a monthly increase of 28 units. Total inventory is still nearly 57% lower than the June 2020 peak, but no group posted an availability decrease in April, suggesting aircraft demand and availability may be close to, if not at, equilibrium.

    Asset Insight’s tracked fleet Quality Rating recorded a fourth consecutive monthly improvement in April, thereby setting another 12-month high figure. At 5.347 on the scale of -2.5 (low) to 10 (high), inventory assets moved deeper into the ‘Excellent’ range, signifying fewer near-term maintenance events. The figure also represents about a 1% improvement Year-over-Year (YoY).

    April’s Pre-Owned Aircraft Value Trends

    The Average Ask Price for the tracked models decreased 4.2% during April, but is still 32.9% higher YTD, and 9.4% higher YoY. Actual transaction values for young, low-time aircraft continue to be higher, but that’s to be expected, given that many of these assets are transacting without a ‘for sale’ listing.

    By category, the Ask Price changes for tracked models were as follows…

    • Large Jets: Ask Price posted an amazing 13.6% increase to establish an all-time record high average for the group. That equated to more than a 52% increase YTD and over 69% YoY.
    • Mid-Size Jets: Decreased 1.2%, but remained very close to March’s 12-month high figure. April’s value represented a 63.2% increase YTD, and more than 25% YoY.
    • Light Jets: The group’s Ask Price, was nearly 59% higher YTD, and 39.5% YoY, but decreased 3.7% from March’s 12-month high value.
    • Turboprops: Rose 1% to post a 12-month high figure, an increase of 7.6% YTD and 7.1% YoY.

    Read full report here

    This Asset Insight report was originally published by AvBuyer on May 19, 2022.

  • NAFA Administrator posted an article
    If a Farmer Has Too Few Tomatoes to Sell, He Does Not Need a Bigger Truck... see more

    NAFA member, Joseph Carfagna, Jr., Partner, President & CEO of Leading Edge Aviation Solutions, discusses corporate aircraft.

    I am not the only aircraft sales professional you have heard talk about the iconic decrease in supply of pre-owned corporate aircraft.  But why do we think we are here, and where do we think things may be headed? Let’s discuss & add up all of the ingredients…

    • A strong stock market for a long time
    • Unprecedented low interest rates (not for long now)
    • Loads of new wealth that has been created in recent years
    • The global pandemic
    • Big tax incentives (which are scheduled to begin rolling back after 2023)

    This all adds up to a frothy mix of ingredients that have caused this shift.

    We now know that approximately 30% of all pre-owned corporate aircraft sales in 2021 were to first time buyers. This is a huge factor – first time buyers do not have an aircraft to sell before buying another.

    In sum, corporate aircraft have become like oceanfront Palm Beach real estate – hard to find, and you will pay a premium to get the one you want. 

    Read full article here

    This article was originally published by Leading Edge Aviation Solutions on February 16, 2022.

     

  • NAFA Administrator posted an article
    Centennial Bank Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE: May 12, 2022
    Contact: Tracey Cheek
    tlc@nafa.aero
    405.850.1292

    Centennial Bank Joins National Aircraft Finance Association

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Centennial Bank has recently joined its network of aviation professionals. Centennial Bank helps finance aircraft purchases and Small Business Administration loan services for first-time buyers as well as those trading up or refinancing current aircraft.

    “NAFA members appreciate having member financial institutions available to consult as they manage their aircraft acquisitions, sales and refinancing transactions,” said Jim Blessing, President of NAFA. “The financial side of purchasing aircraft brings many challenges to our members. Having Centennial Bank as a NAFA member will serve our members well and we welcome them to our organization.”

     

    Products & Services:

    • Financing and refinancing of aviation products
    • U.S. Small Business Administration and USDA programs

     

    About Centennial Bank:

    Centennial Bank provides a broad range of financial services, with an emphasis on aviation transactions. With locations in Arkansas, Florida, Alabama and New York, Centennial Bank strives to provide convenience and expertise to clients with a full array of financial products. Aircraft lenders understand the unique needs of aviation owners-- most are pilots themselves--and can address aircraft financing concerns from providing structuring advice to managing transactions.

    Centennial Bank, a Home Bancshares (NYSE:HOMB) company, is a full-service financial institution with branches in Florida, Arkansas, Alabama and New York with $15 billion in total assets. For more information, please visit www.my100bank.com. Centennial Bank, Member FDIC, Equal Housing Lender. All loans subject to credit and collateral approval.

     

    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 with 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.

  • NAFA Administrator posted an article
    Used Aircraft Maintenance & Marketability Analysis – March 2022 see more

    While pre-owned aircraft availability appeared to be stabilizing, demand was at an all-time high in March, and Ask Prices continued to increase. Which models were affected the most? NAFA member, Asset Insight's President and CEO Tony Kioussis explores.

    Asset Insight’s tracked fleet decreased 0.7% (five fewer aircraft) during March, and listings were 58.5% below the June 2020 peak. The analysis undertaken on March 31 examined 134 models, equating to 698 inventory assets. However, many young, lower-time aircraft continue to transact without ever being listed for sale.

    The tracked fleet’s Quality Rating posted three consecutive monthly improvements to reach a 12-month high figure in March. At 5.308 on Asset Insight’s scale of -2.5 (low) to 10 (high), inventory assets moved into the ‘Excellent’ range (from February’s ‘Very Good’ status), signifying fewer near-term maintenance events and proving, yet again, that Maintenance Status does not directly relate to aircraft age. The figure was also relatively unchanged Year-over-Year (YoY).

    Read full report here

    This Asset Insight report was originally published by AvBuyer on April 21, 2022.

  • NAFA Administrator posted an article
    Avia Yacht Partners 360 Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE: April 13, 2022

    Contact: Tracey Cheek

    tlc@nafa.aero

    405.850.1292

     

    Avia Yacht Partners 360 Joins National Aircraft Finance Association

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Avia Yacht Partners 360 has recently joined its network of aviation professionals. Avia provides bespoke consulting and facilitation of acquisitions, sales and financing/leasing for preowned and new build business jets and superyachts worldwide.

    “NAFA members pride themselves on knowing their markets, and the luxury market is one of our most important verticals,” said Jim Blessing, president of NAFA. “As NAFA celebrates our 50th anniversary, we point to the many services our members offer to the public, including the work Avia Yacht Partners 360 does in the luxury aircraft world. Knowing the legal filings required is equally important as understanding the mechanics or routes for flight.”

    Founder and CEO Rolf Smith serves the luxury niche in both the aircraft and luxury watercraft markets. Because of his own insider insights as well as a network of trusted partners, Avia Yacht Partners 360 helps make the dream of custom aircraft ownership and charters a reality.

     

    Products & Services

    • Charter: planning and execution of for-hire air travel
    • Sales: for those acquiring or selling aircraft
    • Financing and leasing: facilitation of the purchase process
    • New builds: integration and management of new-build luxury aircraft

     

    About Avia Yacht Partners 360:

    Avia Yacht Partners 360 was founded by Rolf Smith and is based in Ft. Lauderdale, FL with locations in North America and Europe. The company provides a customized and bespoke approach to all the advisory, commercial, financial, legal, technical, and project management aspects of luxury aircraft acquisition. Avia is able to tailor services and components according to the needs of the client.

      

    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 with 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. 

  • NAFA Administrator posted an article
    What’s the Aircraft Financing Outlook in 2022? see more

    AvBuyer’s Matt Harris asked NAFA Member David Hudak of 1st Source Bank’s Aircraft Finance Division for his insights into the market for financing private airplanes. How did the market develop during 2021, and what will the financing industry look like in 2022? Find out here.

    Considered a leading source for aircraft financing, 1st Source Bank’s history stretches further back than aviation itself. Established 158 years ago in 1863, aircraft financing has been offered by 1st Source for more than 35 years.

    Today, the Aircraft Finance Division at 1st Source can accommodate more than 300 transactions annually, with the main focus currently being the turboprop and jet markets across the United States, Mexico and Brazil. Nevertheless, the bank will actively finance turbine helicopters, too.

    “The total value of our aircraft financing portfolio is in the mid-nine-figures range, via traditional loan terms,” David Hudak tells AvBuyer as he sits down to discuss the market.

    Read full article here

    This article was originally published by AvBuyer on January 6, 2022.

  • NAFA Administrator posted an article
    BizAv Market Insights from Chad Anderson, Jetcraft see more

    NAFA member, Chad Anderson, President of Jetcraft, shares the latest trends and indicators of note in the business aircraft sales marketplace. 

    It's been a fascinating 18 months in pre-owned aircraft sales with vibrant activity and increasingly diminished inventory. What are the important market trends to note leading into 2022? Jetcraft's Chad Anderson shares his thoughts.

    Jetcraft has been in Business Aviation for 60 years, and, during that time, has grown to offer highly astute market research capabilities, plus expertise in aircraft sales, marketing, and deal management – all the tools today’s aircraft buyers and sellers need to ensure a smooth transaction.

    So it’s unsurprising to hear that in 2021 Jetcraft capitalized on a lightning-quick market, exceeding the previous year’s transaction count, putting it on track for a record year, according to Chad Anderson, President of the company.

    Read full article here

    This article was originally published by AvBuyer on January 24, 2022.

  • NAFA Administrator posted an article
    Aircraft Executives Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE: March 16, 2022                                   

    Contact: Tracey Cheek 

    tlc@nafa.aero 

    405.850.1292 

      

    Aircraft Executives Joins National Aircraft Finance Association 

     

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Aircraft Executives has recently joined its network of aviation professionals. Aircraft Executives provides services focused on flight operations and aircraft acquisition transactions. 

    “NAFA members recognize the importance of flight operations and the data behind aircraft purchase transactions,” said Jim Blessing, president of NAFA. “Members with the type of expertise that Aircraft Executives possess are what make NAFA relevant and vital to the industry. We welcome Aircraft Executives to our organization as NAFA celebrates our 50th anniversary and look forward to their involvement in our upcoming conference and other events.” 

    Products & Services: 

    • Aircraft Brokerage and Acquisition Services  

    • Flight Operation Services  

    • Aviation Consulting Services 

      

    About Aircraft Executives: Based in Atlanta, Georgia, Aircraft Executives aims to ensure the best private aviation experience possible with transactions personalized to fit each client’s specific needs. The team can handle every step of the process from listing to closing and beyond with efficiency and professionalism. Aircraft Executives strives to continue relationships beyond the closing of the deal, whether to provide flight operation services or to simply be the trusted source for aviation questions.  

    Aircraft Executives services include research, valuation, selection, marketing and contracts for aircraft acquisition, flight department setup and crew staffing for operation services and aviation consulting services that include appraisals, delivery, leasing and charter brokering. 

    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 with 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 company now has three offices: Geneva, New York City and Dubai. 

  • NAFA Administrator posted an article
    NAFA member, Adam Meredith, AOPA Aviation Finance Company, discusses lender requirements. see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses lender requirements.

    Remember, the bank is your partner when you buy an airplane, despite the fact you may never take your loan officer on a flight. Like all partners, both must feel comfortable doing the deal. 

    That's the best way to understand a bank’s policies, especially if you, the potential owner/operator, are less conservative when it comes to aircraft total time (AFTT) and time between overhauls (TBO) at the time of airplane acquisition.

    The reality is that many lenders are not comfortable writing loans for aircraft approaching 9,000 hours flying time, which significantly limits financing options. From a mechanical perspective, 9,000 or 10,000 hours isn't a "clock strikes 12" moment after which things fall apart. But a high-time piston airframe may have ongoing maintenance issues for the next owner.

    Also, historically, resales of aircraft in this condition are problematic. The bank could be stuck with a non-marketable asset if they ever have to repossess it. An airplane sold for scrap is never as valuable as one sold whole. That said, financing is not impossible, it is worth calling AOPA Aviation Finance.

    Read full article here

    This article was originally published by AOPA Aviation Finance on November 1, 2021. 

  • NAFA Administrator posted an article
    Financing Aircraft Acquisitions In a Hot Market see more

    NAFA’s Tracy Cheek explains why, more than ever, you need to do your homework, and have your financing team in place…before you begin shopping.

    Selling prices for aircraft are through the roof right now, reaching levels of 20% or more above what they were just two years ago. And if the current demand persists, they could continue to increase at similar rates for years to come.

    That uncertainty causes buyers to wonder if they’ll find themselves in a difficult financial position when they’re ready to sell or trade up.

    It’s a dilemma, but if you are in the market to buy or replace an aircraft, fluctuating prices won’t diminish your air transportation needs. If you are ready to buy, you’re ready to buy.

    Real concerns can arise, however, when it comes to financing the purchase. If you buy an aircraft at an inflated price today, what happens if the prices plunge when you decide to sell or trade? How does that affect the type of funding structures that financial organizations offer to customers in the current market? (See BAA Family (Office) Planning for Aircraft, December 2021)

    Click here to read full article

    This NAFA article was originally published by Business Aviation Advisor on March 14, 2022.