What are the potential problem areas that arise from Pre-Purchase Inspections for buyers and sellers of pre-owned aircraft, and how can these be avoided? Gerrard Cowan asks a panel of industry experts...
A Pre-Purchase Inspection (PPI) is a vital part of an aircraft acquisition, with an appraiser reviewing the aircraft to ensure there are no potential issues. However, it can be a complex process, particularly when problems are raised in areas that may not have been clearly defined.
With that in mind, how can buyers and sellers strengthen their hand when it comes to PPI negotiations?
NAFA member, George Kleros is Senior Vice President of Jet Support Services, Inc (JSSI) Advisory Services, which provides consulting and expertise on a range of areas from finance to maintenance. According to Kleros, the most prevalent disputes arise ahead of the PPI, when determining the level of survey to perform, as this can increase exposure for the seller.
In general, PPIs fall into one of three categories, he shares, depending on the complexity of the inspection. Level 1 covers a basic records review, ground operational functional checks of the systems in the aircraft, and exterior/interior visual checks.
Level 2 includes a detailed records review, opening and inspecting panels, as well as certain areas of the aircraft that are at higher risk of corrosion or water damage. Level 3 is the most thorough inspection.
But how can problems be resolved after the inspection is completed? This is usually defined in the Aircraft Purchase Agreement (APA), Kleros says.
This article was originally published by AvBuyer on August 28, 2023.
