AINsight: Millennials' Shared Use Is a Real Deal see more
NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, discusses millennials, shared use, and private jet travel.
Millennials—those ranging in age from 21 to 37 years old this year—have discovered the private jet travel experience, and they like it. With unique attributes, this generation seems broadly interested in on-demand chartering, sharing flights with friends and, to a lesser extent, owning jets and other types of private aircraft—always on their terms.
Also known as “Gen Y,” Millennials seem to enjoy private aircraft travel “experiences” at an acceptable cost with emphasis on safety, freedom, personalization, efficiency, speed, privacy, customization, and transparency—all couched in a high level of service and luxury. They also crave digital connectivity, mobility, and flexibility to travel when and where they want, preferably arranging private flights on mobile devices.
Their perception of the benefits of business aviation includes accessibility of aircraft on-demand, the ability of aircraft to save time, and the efficiency of aircraft travel to increase their work productivity.
Finally, Millennials care deeply about climate change and social causes. They might prefer aircraft operators that demonstrate their environmental responsibility. In fact, the business aviation community has long been committed to mitigating climate change, proven in part by the formation of a broad industry coalition that emphasizes developing and using sustainable aviation fuel (SAF).
As a generation of roughly 73 million adults, Millennials often have high ambitions. Their top aspiration and priority in 2019, according to Deloitte, is to travel and see the world (57 percent). But their needs and wants are far more than aspirational. Some Millennials have, and others in the foreseeable future may earn or inherit, more than enough money to travel by private aircraft amid their peers who, by one report, now make up nearly half of the world’s super-wealthy, including Millennial billionaires.
Indeed, Millennials already seem to be altering the business aviation industry by transforming a business aircraft from a product for purchase into a tool for transportation services in their “click and ride” world.
VIABLE STEPS FOR MILLENNIALS TO ACCESS PRIVATE AIRCRAFT
What, then, is the right generational, practical, and legal path forward in business aviation to meet the needs and wants of Gen Y? Setting aside the critical issue of selecting the right aircraft for use or purchase, let’s consider two high-level access and legal structures for Millennials to buy, use and share private aircraft along with the corresponding obligations, risks, and benefits.
First, Millennials can decide, and currently seem to prefer, to experience private aviation travel without commitment to, or investment in, aircraft. They simply prefer to click and ride. Second, Millennials can elect to own or lease a fractional share of an aircraft or a whole aircraft.
Regardless of what Millennials choose, private aviation is highly regulated. The FAA oversees the safety of U.S.-registered aircraft operations under the FARs, including Part 91 private flights and Part 135 charter.
Further, now—perhaps more than ever—the FAA is looking for, and potentially taking enforcement actions against, operational and other violations of the FARs. Even with this FAA presence in mind, Millennials can still share ownership or use of aircraft with others or go it alone—as long as they properly structure their arrangements under the FARs.
The following two use and ownership options work under the FARs:
• Use only with no ownership commitment—click and ride. Many Part 135 operators do and increasingly will offer charter-based services such as on-demand charter flights (like renting a car), jet cards (types of pre-paid flight debit cards), block charter programs (package of charter flight hours), club or member programs (reduced flight costs for up-front fees). With myriad choices available, Millennials can select flights by criteria that meet their personal life values, economics and travel preferences, including aircraft type, flight sharing, transparency, connectivity, and privacy.
Although many of the services might be easy and simple for Millennials to use, it is imperative that Millennials do not trade their safety just to pay lower charter fees offered by flying with illegal charter operators. Millennials should do their diligence to identify and steer clear of such legal and personal risks.
• Own or lease specific aircraft. Properly structured, Millennials, solo or in a group, can take a deeper commitment in accessing private aircraft by leasing or owning an aircraft. Ownership, of course, requires a capital investment in an aircraft unlike the click-and-ride model, which has no ownership component. Banks may want to lend part or all of the purchase price to Millennials or buy and lease the aircraft to them, which frees up cash for Millennial to deploy in other ventures or equities.
Within the option to buy or lease aircraft, Millennials can buy and finance or lease a fraction or whole private aircraft. Although a large number of financiers compete to finance or lease whole aircraft, relatively few lenders or lessors finance fractional shares.
Fractional share programs, regulated under Part 91K, offer one good way to dip a toe into the water of aircraft ownership. Fractional shareowners buy and use a certain number of flight hours associated with owning or leasing as little as a one-sixteenth share of an aircraft. This type of purchase might appeal to Millennials who decide to change their interests from click-and-ride offerings to ownership in an aircraft fleet that, for example, uses newer engines and fuels that minimize an aircraft’s carbon footprint, has an outstanding safety record, or has better connectivity features on the ground and aloft.
The next step up in commitment is to buy or lease a whole private aircraft instead of a fraction of one. A Millennial might be able to locate and buy an aircraft that adequately meets his or her personal life values and needs, including size, customization, privacy, and technology. Whole aircraft purchases start to make sense when flying at least 200 hours per year. Before then, click-and-ride or fractional programs might work better economically.
FARS NEVER FAR AWAY
If Millennials need or want to share ownership or leasing of an aircraft jointly with others, they can legally structure such sharing under the FARs. However, being an owner and an operator might not be the same thing, and a joint operator (either as a joint owner or a joint lessee) under Part 91 can be tricky. For example, as a general rule, no cost-sharing, reimbursements, or other compensation in any form can be conveyed to any operator or owner for any Part 91 flight, other than under very limited circumstances.
In many situations, receipt of compensation by the operator will convert the Part 91 flight into an illegal charter. However, if correctly structured, Part 91 will allow Millennials to enter into certain joint ownership and leasing arrangements that Millennials can use to accomplish their objectives.
In contrast, under a bona fide Part 135 flight operation, Millennials can devise their own cost-sharing arrangements under appropriate agreements with much greater flexibility, typically at a higher cost than Part 91 flights.
Millennials today and in the foreseeable future will have the financial means to use or acquire personal aircraft. Only time will tell whether Gen Y prefers to fly private aircraft as a service free of the ownership risks or lean into the world of aircraft ownership or leasing, alone and with friends, to fulfill life experiences and work objectives. No matter which way Millennials go, the FARs will be right there with them.
This article was originally published in AINonline on September 13, 2019.
2019 Aircraft Transactions - It Is Not Too Early To Plan For A Successful 2019 Closing see more
NAFA member, Amanda Applegate, Partner with Aerlex Law Group, discusses how to plan for a successful aircraft closing in 2019.
As we move into the last several months of 2019, whole aircraft transaction volume will increase, particularly in December. Personally, I have a number of clients who are ready to proceed immediately with a purchase or sale once either the right inventory can be sourced or once a buyer is found for the aircraft that is listed for sale. Assuming the right aircraft can be found for buyers or the right buyer can be found by sellers, as transaction volumes increase those providing support services such as aircraft consultants, insurance agents, escrow companies and pre-buy inspection facilities may start to see the stress of the demand. As always, having a well-established acquisition or sales team and a process plan can help insure that nothing gets missed, that the closings go as planned and are completed in the 2019 calendar year. Ten items to consider to help closing occur in 2019:
1. If you are considering selling in 2019, list the aircraft for sale as soon as possible to allow enough time for the sales process to conclude before the end of the year.
2. If you are considering buying in 2019, you should already be looking for the right aircraft. Inventory is lower in many aircraft categories than it has been for years. Therefore sourcing the right aircraft is taking longer than it has in the past and may require expanding the search to outside of the United States.
3. Many inspection facilities have long wait times to schedule a pre-buy inspection. As soon as an aircraft is sourced or a buyer is found (or perhaps even before), look for a pre-buy slot and try to hold it if possible. As a seller, if certain inspections are coming due, perhaps scheduling these in conjunction with a potential pre-buy inspection may help with reserving a slot.
4. If you have an existing aircraft and plan to replace it, consult your tax team early in the process. Your tax team may recommend that both transactions occur in the same year since 1031 likekind exchanges are no longer available.
5. If you are seeking depreciation in 2019 (bonus or straight-line), then the aircraft being purchased needs to be placed into service and used for business (preferably exclusively for business if closing is near the end of the year) before the end of the year.
6. When support service providers are busy, checklists and a team leader become imperative. There must be one person leading the team who is checking to make sure all aspects of the transaction are completed prior to closing (i.e. assignment of mx. programs, insurance, funds, lender agreements, management agreements, international registry account set up, etc.).
7. The last day of the year in 2019 is on a Tuesday. In the past, the FAA registry has closed early on holidays and also for weather. It is recommended that 2019 closings be completed no later than December 27, 2019 in order to allow time for the aircraft to be placed into service before year end and avoid any unexpected closing delays that could occur.
8. Lenders are starting to require all ancillary documents be in place prior to funding. If the aircraft is going to be managed, chartered or on maintenance programs, the lender may require all of these documents be in place along with its own consent agreements, prior to closing. It is likely that these documents will not be allowed to be done as post-closing items, so plan enough time to get all relevant documents in order prior to year-end. Alternatively, consider paying cash and arrange financing after closing.
9. If the transaction is a crossborder transaction, make sure all parties are realistic on the amount of time the import/export process will take and that there will not be any delays in getting the Aircraft on the new country registry.
10. Having upgrades done at the same time as the pre-buy inspection often saves downtime on the aircraft for the buyer. However, it may also push the closing into 2020. Therefore, if a 2019 closing is important a close review of the calendar should be made to make sure the upgrades can be completed and the aircraft returned to service prior to the end of the year.
This article was originally published in BusinessAir Magazine, August 2019, Volume 29, No. 8 and on Aerlex.com on September 12, 2019.
Is There a Minimum Purchase Price to Obtain a 10-Year Loan? see more
NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, answers your aviation loan questions.
Q: What's the minimum purchase price to obtain a 10-year loan? I'm looking at aircraft in the $20K-$30K range after 1960.
A: Thank you for reaching out. The minimum loan amount required for a 10-year term is $20,000. This is after the minimum 15% down payment. Therefore, the minimum purchase price should be around $24,000. Please feel free to give us a call as you get closer to purchasing. We always recommend that AOPA pilots get pre-approved as they shop.
Q: I'm thinking of buying my first plane. Would you finance an experimental one? The one I am looking at this moment is a SONEX 2016, tri-gear, with asking price of $39K. What is rate and term?
A: A number of our lenders offer financing on experimental aircraft. In some cases, a lender may require that the aircraft have an appraisal. Our account executives will discuss that requirement with you early in the application process. A SONEX is common enough that an appraisal is not likely needed. For a purchase price of $39,000 rates will fall around 7.5% for 10 years. Keep in touch as you search. Our account executives can help with providing rate quotes and valuations as you shop around.
This article was originally published by AOPA Aviation Finance Company on June 12, 2019.
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?
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.
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.
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.
Financing An Aircraft Before It's Moved To The U.S. With FAA Registration see more
NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, answers your questions about loans for engine replacements and aircraft financing.
Q: We are looking for financing options to purchase a pressurized Baron that is currently based and registered in Canada. I am writing to ask if you’d be willing to finance this aircraft before it is moved and transferred to the US with FAA registration?
A: For aircraft being imported from Canada our lenders will require that the deregistration from Transport Canada and new FAA registration be completed prior to releasing funds to the seller. In most cases lenders are able to position funds in escrow while the import is completed. Imports from Canada typically only take a couple days. Give us a call to discuss further. We can also help you set up escrow with our AOPA Strategic Partner, Aero-Space Reports.
Q: I own my aircraft outright. Do you provide loans for engine replacements?
A: Yes, like avionics upgrades, our lenders will finance up to 85% of the aircraft value with an overhauled engine. Having no debt on the aircraft potentially allows for the lender to finance the full cost of the overhaul. Call us today so we can get you started on the application and approval.
This article was originally published by AOPA Aviation Finance Company on July 30, 2019.
How to Buy an Airplane for the First Time: A Buyers’ Guide for Beginners see more
NAFA member, Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services, shares the best steps to take when purchasing an airplane for the first time.
Have you ever had the dream of owning an aircraft? Does the thought elicit fantasy-like imagery of you soaring above the clouds as you jettison off to some Carribean island?
If it’s always been your dream to own a plane, it might be more financially viable then you thought. There are not only several ways you can potentially afford the aircraft of your dreams, but also some creative ways to get in the air quickly.
Today, you don’t have to be a billionaire to own an aircraft, especially if you’re looking into a smaller airplane to fly for recreation, or take a loved one on the journey of a lifetime.
So where do you start? It’s essential to follow a process when buying an aircraft regardless of its size. We created this simple guide for beginners so anyone who wants to own a plane can.
Keep reading to learn how to buy an airplane.
1. Know What You Want and Why You Want it
The first thing you need to do is figure out what you need and want in an aircraft. If you’re looking for a cropduster, you’ll need something vastly different than if you’re looking to take groups on luxury flights. In all seriousness, this is a much more difficult decision for beginner pilots. It’s hard to know what you need from a plane, things like its size, number of seats, how far it will fly, to stuff like nearby maintenance centers, insurance costs, and how much it will cost to operate. There is a perfect reason as to why so many models exist as many factors determine the ideal aircraft for you!
I always suggest a first-time buyer go to a fly-in, or an airshow and look at aircraft, get in them, kick the tires and ask questions. You might love how one plane looks, and you didn’t realize it’s just too small for you. Likewise, seeing them all in person close to each other will help you identify traits not so apparent at first.
2. Set Your Budget and Add 10%
Once you know the type of plane you want, you can start looking to determine the approximate price of that type of aircraft. Being able to stretch your budget is where some creativity and due diligence will pay off. There are aircraft for every budget. So who will finance it?
Did you know AOPA FInance sources aircraft loans? They do, and they work with a fantastic group of lenders from small regional banks to credit unions. They make the process simple, and you might even be able to borrow to include refurbishment or some updated avionics. After all, now that you are buying an aircraft you at some point decide to customize it or utilize newer avionics equipment. Your lender will help!
3. Kick Tires, Search, Search and Search
When a market is hot, finding aircraft is not easy. You will often find out that the plane you had your eye on was also the dream machine of 40 other buyers and someone beat you to it. I tend to see this occurring more and more in specific piston markets. So what’s the trick to finding a great aircraft? For one, I like to use Facebook Groups, Owner Forums, and maintenance facilities. However, I have news for you; if you are only interested in a private sale, you may be missing out on an opportunity to develop a relationship with a local dealer who will not only support your aircraft beyond the purchase but be there when its time to upgrade. HINT, some dealers, if you are friendly, might even give you the heads up about an aircraft someone else is thinking about letting go. So don’t limit yourself to a marketplace or classified listing. Get active in the community, and make friends in those forums.
4. Get a Verified Value Report the “CarFax” of Aviation
Once you’ve found a plane or planes within your budget that looks promising, you’ll want to get a VREF Verified Report. The Verified Report is the “CarFax” of aviation, and it provides all that you need to know to decide about which aircraft to focus your buying efforts.
Our report includes Value history, market demand, serial number specific Retail Value, Damage History, and much more. These, along with the rest of the report, will give you everything you need to decide if you want to keep pursuing that plane. It can also help you in the negotiating process.
Once you know what you want to pay, you can determine what you should pay by using VREF. So whats next? Its time to make the offer, which most of the time a buyer will send a written offer. However, let’s not jump ahead too far. I always suggest you find an aviation attorney to assist before buying so that he or she can set up a proper entity to own the aircraft, which will also protect you and your estate if there were ever liability. You will also want to talk to your accountant so that you understand what the tax ramifications are and where to establish your closing venue. Once these components to the purchase are complete, you can make your offer, provide proof of funds or your deposit to the seller and have your lender make the arrangements for your loan. Keep in mind, most if not all of the banks will require an Appraisal of the aircraft before they will send you a commitment or approval letter. The reason being, the bank needs to know what the asset is worth at that moment in time.
6. Research Insurance BEFORE you commit
Once you know which plane you’re going to buy, you’ll want to look into insurance. Make sure you have a broker or agency you can work with and don’t leave this to the last minute as you might be wishing you hadn’t if those premiums come in substantially higher than your budget was forecasting. Insurance brokers are so crucial to a successful aircraft purchase that I can not emphasize enough you need to build a relationship with someone. There will also come a day that you will need solid advice on how to deal with a claim, so get a reputable agency to set up your binders.
7. Buy Your Aircraft!
At this point, the only thing that’s left to do is to finalize the purchase!
Phew, that wasn’t so bad, was it? Now that you are an aircraft owner, the world is at your fingertips. So pack a bag, grab a friend or family member, and explore!
How to Buy an Airplane: Are You Ready?
Now you know how to buy an airplane. As you can see, it’s a relatively simple process that’s extremely rewarding.
If you need a loan to make this purchase, check out our post on the aircraft loan process. There, you’ll learn everything you need to know about getting the money you need now to make your dreams come true.
This article was originally published by VREF Aircraft Value Reference & Appraisal Services on July 26, 2019.
Adam Meredith, President of AOPA Aviation Finance Co., shares helpful steps when financing aircraft. see more
NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, shares helpful steps when financing your aircraft.
AOPA Aviation Finance and our experienced and trusted specialists can assist you in making your purchase by offering a wide array of financing options that are tailored to your specific needs.
Here are eight steps to help you start flying:
Gather Supporting Documents
Gather your tax returns, financial statements, and personal net worth information for submission with your application to speed up the process. The fastest approvals are applications where W-2's are submitted with no business ownership, usually within 1-2 days. Additional approval time may be required for applicants with business entities.
Complete an Application
Fill out the application as completely as possible to avoid a delay in processing and remember to provide an original signature on the application before submitting it through the online portal.
Get Approved or Pre-Approved Quickly
Once your application package is complete, your account executive and analyst will identify and select the best lender based on your aircraft selection, usage, loan structure, and financial history.
A pre-approval ensures that:
- You don’t lose the aircraft of your dreams due to lack of financing.
- Your loan closes quickly.
- You have 90 days to decide on your aircraft with the rate locked for 30 days.
Negotiate a Balanced Purchase and Sales Agreement
Don’t just sign anything given to you by the seller, have someone familiar with the process review to ensure it’s balanced. The purchase and sales agreement is a binding legal document that sets the sales price and all conditions to close, including time to complete pre-buy, time to complete transaction, how and where escrow and deposit are held, and who pays to move the aircraft, etc.
Schedule a Pre-Purchase Inspection
We highly recommend a pre-buy inspection by an independent 3rd party to avoid any surprises and conflict of interest once you take ownership of the aircraft.
Typically, the prospective buyer pays to re-position the aircraft for the pre-buy, and the seller pays for correcting any maintenance issues relating to airworthiness.
Set Up Escrow and Review Fees
AOPA members pay no broker fees! Members will, however, need to open escrow with a lender approved title and escrow company to ensure proper closing and will include a title search. Normally, fees are based on the aircraft’s sales price and are split by the buyer and seller.
Lender closing costs are based on the aircraft and purchase price and are used to cover hard costs such as background checks, credit bureaus, overnight fees, loan documentation, and legal review.
Hull and liability insurance coverage is required by lenders, AOPA members can get discounted rates through AOPA Insurance. Your account executive will gladly refer you to an agent for a quote.
Prepare for Closing
Once you have selected a closing date, be prepared to find a notary to notarize documents and leave time for overnight packages to be sent back and forth as some documents require a “wet signature”.
This article was originally published by AOPA Aviation Finance Company on August 5, 2019.
Positioning Oneself in a Seller's Market see more
NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, shares his strategy for positioning yourself in a buyer's market.
In a seller’s market, the best way for a buyer to position themselves is through a three-pronged strategy of pre-approval, extra liquidity and nimbleness. Buyers who finance may find themselves up against cash buyers. That’s why being nimble is so important. The buyer may have to make an offer on multiple planes before they finally get into first position on a transaction.
If you think you’re able to pay cash for a plane with the intention of getting it financed after the fact, make sure the transaction goes through proper escrow channels all the way to closing. AOPA Aviation Finance knows from experience that being pressured by a seller into purchasing a plane quickly without all the proper due diligence leads to bad outcomes more often than not.
Many buyers are aware that incomplete logs, damage history, or a title with a cloud over it are reasons for a finance company to nix the deal. However, in this era of heightened security measures, uncertainty where (and to whom) the money from an aircraft sale went might also prevent the ability to obtain financing. Not to mention, subject a buyer to unwanted scrutiny from one or more three-letter government agencies post-closing.
Finance companies have a regulatory obligation to follow the money. They must vet not only the buyer, but also the seller as well. This is done in order to ascertain whether money from a cash deal is destined for a bad actor on a list of prohibited persons who might possibly funnel the money to an organization on one of a number of “bad guy” lists. The simplest way to protect yourself from such close scrutiny while still preserving your potential for financing is to have the transaction go through escrow.
Buying a high-quality airplane in a seller's market has a lot to do with timing. In past seller's markets like this one, AOPA Aviation Finance has seen frustrated clients try two distinct tactics to improve their chances when their timing was off: offer a buyer well above asking price; and/or settle for a lower quality airplane.
We like to advise our clients that a tight market is a particularly important time to maintain objectivity, despite understandable temptations to the contrary. AOPA Aviation Finance helps a buyer by keeping a dispassionate perspective. However, in those instances when a buyer simply cannot remain objective, we counsel them to be prepared for one of three scenarios:
- A person dead set on paying more than where a plane ”book’s out” with the pricing digest guides needs to be prepared to pay for a valuation to justify why the plane is worth more, or
- They need to be able to shell out the difference between where it books and the asking price--in addition to the regular down payment, or
- A combination of the two
Lenders will finance an aircraft only on value as determined by an independent third party so the difference between that value and the buyer's asking price will have to be made up by the borrower. If a buyer can't afford to make up that difference without changing their global financial picture, AOPA tends to advise against the deal.
Some clients feel that settling for a lesser value aircraft at least gets them a plane. For instance, pursuing a well-appointed TBM 700 because they lost out on one too many highly sought-after TBM 850s. The thing is, it's very likely other frustrated buyers have drawn the same conclusion. They too flood the market, which boosts the popularity of TBM 700s, which artificially boosts their prices. Short term win, but long-term loss. That's because the market will inevitably reverse. When it does, the 700 will likely depreciate faster and farther, thus commanding less in resale as a result.
Is it worth it to bet that you'll use and sell that lesser plane before the market turns? Is it worth it to take that risk in a market whose output is only a few thousand aircraft annually, and whose market is heavily dependent on a robust economy? A conversation with an AOPA Aviation Finance expert can help guide your decision-making and help hone your acquisition strategy.
This article was originally published by AOPA Aviation Finance Company on July 8, 2019.
The Dos and Don’ts of Hiring Aircraft Appraisers see more
NAFA member, Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services shares what you need to know when hiring an aircraft appraiser.
The joy of taking flight is one like no other. The business of getting to that take off though can be another matter.
The purchase or sale of an airplane isn’t exactly an everyday sale. For many buying or selling an aircraft, it’ll be their first time at the rodeo. That’s all the more reason to be prepared when getting into an aircraft transaction.
Hiring an aircraft appraiser is an important part of the aircraft transaction process. If you’ve never worked with an aircraft appraiser before, it’s essential that you prepare yourself for the experience.
Read on, and we’ll walk you through all the dos and don’ts of working with aircraft appraisers.
Understanding Aircraft Appraisal
If you’re going to get an aircraft appraised, hopefully, you understand why you’re taking such a step. But many potential aircraft owners simply call an appraiser up because they’re told to do so. They don’t take the time to understand the reasons behind the recommendation.
A proper understanding of the aircraft market is hard to get. A big aircraft company is likely to have a team of appraisers on hand at all times who keep incredibly detailed track of aviation industry trends and costs. Those unlucky enough to not own a multi-million dollar company have to outsource to receive such expertise.
An aircraft appraiser uses their unique knowledge of the aircraft and market trends to properly estimate the value of a given aircraft. Appraisers are held to a high standard and must be able to back up their estimates with a huge amount of data.
Their estimates must hold up to scrutiny even in a court of law.
You might need an appraisal for a variety of reasons. You can use an appraisal to properly find the right selling price for an aircraft or to see if the buying price for another is reasonable.
There are many other reasons to have aircraft appraised. You might be refinancing a loan, looking at an insurance policy, or just curious about the current value of your aircraft.
It’s important to understand the purpose of your appraisal. This way, the appraiser you hire can take special care to analyze discuss areas most closely related to those goals.
Do Find Someone Qualified
The aircraft appraisal industry is unregulated. That means that anyone out there can technically give a value amount for an aircraft since there are no required standards for training or experience.
That doesn’t mean you should throw a dart at the wall and hope you hit someone who knows what they’re talking about.
The Appraisal Standards Board develops and publishes a set of standards on behalf of appraisers. Ensuring that your appraiser lives up the standards of that publication can be important.
There are two organizations in the aircraft appraisal world that are known for their great reputation. They are the N American Society of Appraisers (ASA) and the International Society of Transport Aircraft Trading (ISTAT) and they both have long histories. VREF has a substantial staff of Senior Accredited Appraisers through both the ASA and ISTAT. It is important to note that hiring an appraiser is hiring his knowledge and experience. If the appraiser is not qualified to appraise the asset then he/she should bring in an appraiser that is qualified, or the report would not be considered USPAP compliant.
Both organizations provide a wealth of training for their members. A badge of certification from one or both of these organizations can mean a lot in terms of an appraiser’s credibility.
Regardless of who you go with, you should ensure that the appraiser you hire qualified and experienced when it comes to the kind of aircraft under consideration. Ensure that a field visit is part of their process.
An appraisal is a tricky business and there are many ways to come to a final number. The last thing you want is someone who doesn’t know what they’re talking about giving you a number that will lead you in the wrong direction.
Don’t Get Too Subjective
A proper appraisal of an aircraft will be an objective evaluation of the aircraft. You are filling out a balance sheet, not a sales pitch. As such, don’t be surprised when certain selling points don’t add up to the valuation you might wish for.
Having the wrong floor plan or missing critical equipment for compliance might be a recipe for lower than anticipated values.
Just because you have a certain taste for a design or feature, doesn’t mean that aspect will add value to your aircraft. There are certain aspects you might find cool about an aircraft that actually detract from the value.
Enjoyment is subjective after all, and it’s important to keep this in mind when it comes to appraisal.
Do Consider Databases Used
An appraiser will need to pull and use a certain market database for their analysis. Publications are consulted frequently by aircraft appraisers, but not all these publications paint the same story about the state of the market or industry.
VREF Aircraft Value Reference & Appraisal Services, delivers aircraft and engine data through online subscription services and published quarterly digests. VREF provides valuations, appraisals and advisory services to a world-wide client base of aviation professionals including, banks, financial institutions, lessors, manufacturers, aircraft operators and suppliers. VREF Aircraft Value Reference & Appraisal Services plays a key role in informing decisions and identifying opportunities within the aviation industry. VREF is also the official Valuation Guide and Appraisal company for the AOPA.
The database used for reference can have a huge impact on the final estimated value of an aircraft. As such it’s important that you, as the hiring party, stay well informed.
The Dos and Don'ts Of Aircraft Appraisers
Aircraft appraisal can be a tricky business. If it’s your first time working through an aircraft transaction, it can take a minute to get used to working with aircraft appraisers. But with the above tips, you’ll be well on your way to a proper valuation.
Need more info about aircraft ownership? Feel free to contact us with any questions.
This article was originally published by VREF Aircraft Value Reference & Appraisal Service on April 18, 2019.
What Are The Benefits Of Title Insurance For An Airplane Purchase? see more
NAFA member Adam Meredith, President of AOPA Aviation Finance Company, answers your questions about title insurance when purchasing an airplane.
Question: I’m planning to purchase a used airplane in the next 6-months. I’ve heard some owners talk about not needing title insurance? Wouldn’t this be required by a lender? I’m familiar with title insurance for a home purchase, but what exactly are the benefits of title insurance for an airplane purchase?
Answer: Surprisingly, no, many lenders do not currently require title insurance on every transaction.
Similar to a home, your aircraft also has a title history which should be reviewed before buying. While most AOPA members know the importance of this and perform a title search prior to buying an aircraft, many may not know there are numerous scenarios where a lien or claim can end up in the FAA registry and/or otherwise “clouding” your ownership interest. By obtaining title insurance, the title insurance company will defend you legally against any bogus claims.
Question: I would like to purchase my first airplane this year. My price range is about $50k. I’ve been looking at your website and the list of financial documents you will require, especially for a business owner like myself, seems daunting. Are there any other options for someone like me? I have good credit and good cash flow.
Answer: While providing the full list of financial documents gives you the most lending options, some of our lenders do offer low doc products. The underwriting guidelines tend to be more constrained, however, for well-qualified borrowers all that is needed is an application. Because this product does not require supporting financials rates will average .25-.75% higher than our most competitive options. If you are interested in more details about this low doc option, please give us a call and we can give you a more specific rate quote.
This article was originally published by AOPA Aviation Finance Company on May 3, 2019.
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 email@example.com.
What Is the Best Personal Aircraft to Buy in 2019? see more
NAFA member Jason Zilberbrand, President of VREF Aircraft Value Reference & Appraisal Services, shares advice on finding the best personal aircraft in 2019.
When buying an aircraft for personal use, there is a litany of factors that will go into your decision-making. Whether your intentions are to take day trips for the weekend or intercontinental excursions, finding the best personal aircraft to meet these needs will come at wildly different price points.
In addition, the number of passengers and on-going costs for the aircraft can affect your decision.
Keep reading for a VREF breakdown of various examples for the best personal aircraft you can buy in 2019.
The most utilitarian and hassle-free aircraft are single engines planes. With price points in the low or sub-six figures, a single-engine plane can get you flying for a low cost of ownership.
Here are some of the best buys for 2019:
Pre-Owned Beechcraft Bonanza
- Price $100k – $375k
- 765nm range
- Seating for 6
Pre-Owned Cessna 206 Stationair
- Price $100k – $225k
- 730 nm range
- Seating for 6
- Features a large rear “clamshell” door easy load-ins
Other notable players in this category are the Piper Cherokee Six, Piper Malibu Mirage, and, of course, the trusty Cessna 172.
Pilots enjoy the redundancy or dual engines of a twin. Twins handle larger payloads and faster speeds, as well as faster takeoff and climbing speeds.
These tend to cost less than high-performance single engines but garner higher ownership costs due to the second engine.
Examples of deals in 2019:
Beechcraft Baron 58
- Price $200k – $1.4 million (new)
- Seating for 6
Pre-Owned Beechcraft Baron 55
- Known as the “Baby Baron”
- Price $75k – $175k
- Though smaller, it comfortably seats 6 passengers
Other Notables: Piper Turbo Seneca II, Cessna 310R
Typically known as a “Step-up airplane,” turboprops have taken a huge share of the market from the multi-engine planes of the past. While pilots originally bought twin-engines as a way to make them and their families feel safer, turboprops have made great leaps in sophistication and reliability. Their short takeoff and landing capabilities make dealing with emergencies much easier.
Turboprops do incur higher purchase prices and operating costs. They are extremely efficient at lower altitudes and slower speeds.
They enjoy the ability to access smaller airports and runways and are ideal for day trips of 500nm or less (think, Miami to Nassau and back). Be sure to enlist the help of a professional aircraft appraiser because of the substantial jump in price.
Here are some of the standouts:
Piper Meridian (2002 – 2015)
- Price $650k – $1.5 million
- 1,000nm range
- Seating for 6 in plush interiors with upgrades
TBM 700 (1990 – 2005)
- $750K – $1.5 million
- 1,350nm range
- Seating for 6
Best Personal Aircraft – Jets
Jets are at the top of the personal aircraft hierarchy. They fly further, faster and with more people than the other categories on this list.
Jets have massive price tags and ballooning maintenance and hangar fees. But for the business or personal traveler who demands speed and global access, this is the personal aircraft of choice.
Very Light Jets
Cessna Citation Mustang
- “Most bang for your buck” smallest member of the Citation Family
- Price $1- $2 million
- 1170 nm range
- Seating for 5 plus 1 crew
- The only brand new twin-engine jet for $3 million
- 1125nm range
- Seating for 5 plus 1 crew
Cessna Citation CJ3 or CJ3+
- Price $3.75 – $6 million
- 2,000nm range
- Seating for 6 passengers plus crew
Embraer Phenom 100
- $1.75 – $2.25 million
- 1,178nm range
- Seating for 5 plus crew
The Best Fit
As mentioned above, finding the best personal aircraft for you is a combination of factors that fit your lifestyle and intentions. Yet, both a hobbyist and a global businessperson can enjoy the freedom that private aviation provides.
With any aircraft purchase, be sure to reference our reference guide to make sure you have the most accurate data and valuations.
This article was originally published by VREF on May 2, 2019.
An Overview of Aircraft Loan Structures see more
NAFA member Adam Meredith, President of AOPA Aviation Finance Company, discusses how to determine which aircraft loan package is right for you.
The best way for an AOPA Finance expert to determine the right loan package for its members is to ask them the right questions, starting with, “What’s important to you?”
Most have the same answer: “The lowest interest rate possible.” From experience, we know they really mean “lowest rate possible for their specific situation”. Three questions help us frame their specific situation:
- What have you budgeted for a monthly payment?
- How long do you want to own this plane (and keep financing in place)?
- How much are you looking to put down?
How the member answers determines whether a fixed, floating or a hybrid financing structure fits best. Their financial complexity might require us to recommend an asset-based approach.
A fully amortized, fixed rate loan with the longest possible term might be ideal for somebody intending to own the plane for a decade or more. The risk is the interest rate locked in at the beginning of the term might be higher than the going interest rate at the end. But the trade-off in peace of mind knowing the guaranteed monthly note is compatible with one’s long-term spending plan makes the extra cost worthwhile. For example, for non-commercial use, there are lenders who will execute fully amortizing, fixed-rate loans with 15 or 20-year terms for turboprops still in production.
When it comes to length of ownership, many of our clients answer, "about ten years.” Data AOPA Finance has collected shows the typical length of ownership is actually no more than five. That's why floating, balloon or adjustable rate (ARM) loan structuring might make more sense.
A floating rate loan has no fixed interest rate, while an adjustable rate (ARM) loan starts out fixed but then changes (to either a new fixed rate or a floating rate). Following the initial period, an ARM floats, based on a benchmark reference rate like the Federal Home Loan Bank (FHLB). The initial period is typically three to five years. Another term for an ARM is hybrid. In the current interest rate environment and forecasting into the foreseeable future, these financing packages can offer better savings compared to fixed rates with similar amortizations.
Balloons are another option; however, the amortization period is longer than the actual loan term. An example might be financing a turboprop on a five-year term with a "balloon" and a 15 to 20-year amortization. That package might work best for members who a.) are looking purely for the lowest rate possible, and b.) know they’re going to own the aircraft (and/or keep the loan) less time than the normal average.
Balloons allow the borrower to delay paying the principal until the very end, thus keeping the monthly outlay low. At the end of the term, the entire unpaid balance comes due. That small monthly note balloons into one large final payment.
Sometimes members come to us comfortable with the complex structures of floating or ARM financing, but the complexity of their own finances prohibits them from using those options. Take for example, a real estate entrepreneur who owns 30 different properties. Each property is a separate ownership entity. They have partners on some of these properties and are a majority owner, or half owner or some variation of percentage, across the entire real estate portfolio. Despite the positive cash flow, there are lenders who will not do a deal without them putting a guarantee on all the entities they have equity in, as well as a personal guarantee from themselves. Even if they aren’t restricted by covenants from doing so, the cost in money and time is frequently not worth it. The financial complexity surrounding their business might mandate a simpler, asset-based loan configuration.
In fact, asset-based deals can be further simplified if the client can increase their down payment. The more you put down up front, the more options lenders have available. A loan on an older airplane or one with higher-time engines becomes doable if the borrower can afford a higher down payment. Whereas a newer plane might be approved with a 15% down, 20-year amortization, the same situation for an older turboprop might go from “no deal” to “deal” with 30% or 40% down. Likewise, a relatively mainstream turboprop that has been produced in significant numbers might normally see a 15-year amortization. Without a larger down payment, older or rarer turboprops might cause lenders to shorten the amortization period, or even refuse to make the loan.
Jet financing has its own unique requirements which might also necessitate a higher down payment. That’s because the frequency of engine advancements and avionics upgrades as well as new products tend to render those aircraft obsolete faster than others. That’s why asking the right questions of our members allows AOPA Finance to give them the best picture when it comes to securing the best financing package for their unique situation.
This article was originally published by AOPA Aviation Finance Company on April 12, 2019.
What's Included in Closing Costs? see more
NAFA member Adam Meredith, President of AOPA Aviation Finance Company, answers some of your aircraft closing cost questions.
Question: What is typically included in closing costs and how much should I expect them to be? Currently I’m looking to finance a Cessna 182 and want to determine the total costs of financing.
Answer: Closing costs are the real costs incurred by the lender to document the loan. These typically include fees associated with preparing and mailing the loan documents, credit/background checks, and, in some cases, title and escrow. Most of our lenders’ closing costs run between $500-$800 for a C182. If the lender does not offer in house title and escrow, this would be additional fees. Title and escrow generally costs $600-$700 and is often split between the buyer and seller.
Closing can become complicated if you don’t know what to expect. Let AOPA Finance help you through the process. Give us a call at 800.627.5263.
Question: I have been looking at several Bonanzas, but every time I start negotiations with the seller, they opt for cash buyers. Is there something I can do to get the financing in place before I negotiate the sale?
Answer: If you have an age range and purchase price in mind, it would be recommended to get pre-approved. The pre-approval will take care of the credit underwriting so that when you find an aircraft you can confidently make an offer. Closing can be completed within a few days upon signing a purchase agreement if a pre-approval is already in place. Approvals are typically valid for 90 days with the rates locked for the first 30 days.
If you are ready to get pre-approved, please call us at 800.627.5263 and we can send you an online application to get started.
Have questions for Adam? He is happy to answer them. Submit your questions here. Great rates. Great terms. Helpful and responsive reps. Three good reasons to turn to AOPA Aviation Finance when you are buying an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (75263) or click here to request a quote.
This article was originally published by AOPA Aviation Finance Company on March 29, 2019.
Preparing for an Aircraft Purchase: How to Become the Most Prepared and Qualified Buyer see more
NAFA member, Amanda Applegate, Partner at Aerlex Law Group, shares tips on how you can become the most prepared and qualified buyer when purchasing an aircraft.
As the supply for quality pre-owned aircraft inventory has begun to shrink (especially in certain large cabin models), I see more buyers devoting time to advance preparations to ensure that they are perceived by sellers as the most qualified, attractive buyer. If you are in the market for an aircraft and want to expedite your purchase and closing, consider taking the following steps prior to making your first offer.
BUILD YOUR ACQUISITION TEAM EARLY & PRIOR TO THE FIRST OFFER
Aircraft Broker/Consultant – Select a consultant or broker who knows the global market for the aircraft type you are purchasing. The broker/consultant must also be respected among his peers. There are certainly instances when an offer is not taken as seriously if the broker representing the buyer lacks experience with the particular category of aircraft being sought or has had previous conflicts with the broker on the other side.
Aviation Counsel – Retain counsel in advance so she is ready to jump into a deal once the aircraft is selected. This will save valuable time later. Including a provision in the Letter of Intent (“LOI”) that the buyer will have an initial purchase agreement to the seller within three days of signing of the LOI will be very appealing to a seller. But this can only happen if aviation counsel has already been identified, retained, and is up-to-speed on the specifics of the deal.
Technical Representative – Hire the right technical expert so that he is ready to start immediately once the aircraft is identified. The technical representative will review aircraft maintenance records and identify any inspection items that must be rectified. The technical representative can also help determine which aircraft is the best aircraft to make an offer on, based on aircraft pedigree.
Lender – As in all transactions, sellers prefer cash deals. But if the aircraft is going to be financed, contact lenders and select a lending partner before a specific aircraft is chosen so that lenders are able to close quickly once the aircraft is identified.
Management Company – Is the aircraft going to be managed by a third-party provider? Will charter be allowed on the aircraft when not being used by the aircraft owner? Selection of a management company early in the process means you will have the management company acting as your advocate throughout the acquisition. Many management companies don’t start charging management fees until the aircraft is acquired, so there is valuable advice available at little cost by selecting early.
Insurance Broker – Decide if the insurance will be procured through the management company or if you need an insurance broker to provide the comprehensive coverage to diminish liability concerns.
Escrow Agent – Identify your escrow agent and obtain their wire instructions so you are ready to send a deposit as soon as you have an accepted LOI. This demonstrates to the seller that you are a committed buyer.
ESTABLISH YOUR OWNERSHIP STRUCTURE
Your aviation counsel can help you determine the following: What entity will own the aircraft? Does the proposed structure make the most sense, based on the intended use of the aircraft and the potential tax implications for those who will use the aircraft? Is the ownership structure legal under the Federal Aviation Regulations?
Retain a qualified aviation tax attorney and CPA who can review the ownership structure to make sure it is the best tax-plan available.
What are the sales and use tax consequences of the ownership structure?
Are there adequate liability protections under the ownership structure or at least adequate insurance for all parties involved in the ownership structure?
DON’T SWEAT THE SMALL STUFF
There are a number of miscellaneous items that often get negotiated in the LOI and purchase agreement. These items comprise a small amount of the overall transaction cost, and having flexibility on them may make your offer stand out. Understanding the cost of these items and your position on them before the LOI may allow your offer to appear more competitive than another offer. One approach is to have the seller pay all of these costs and then adjust the purchase price higher since that is the number the seller will most likely focus on. Some of the small items are Escrow Fees, Aircraft Movement Costs, Customs and Registration Change Fees (if applicable), and Registration Number Change Fees.
Spending time and effort at the beginning of the aircraft acquisition process to prepare as much as possible, can lower the naturally-occurring stressors related to aircraft transactions.
Please contact Amanda Applegate at 310-392-5200 or firstname.lastname@example.org.
This article was originally published in BusinessAir Magazine, May 2019, Volume 29, No. 5.