Buying an aircraft provides individuals who have a need or desire to travel with a faster, more convenient way to take longer trips, either for business or pleasure. In addition to being a major purchase, aircraft ownership comes with a range of considerations which are unique to aircraft, and are things which buyers should plan for before moving forward.
Anyone considering the purchase of a used private aircraft should ensure they understand what they need to know and do before they commit to the transaction.
Assessing the aircraft’s condition
When contemplating the acquisition, ownership, management and operation of private aircraft, the condition and history of the aircraft is paramount. Prospective buyers should make arrangements to have a thorough pre-purchase inspection performed by a qualified aircraft technician or service center having experience with the specific type of aircraft being considered. This inspection should include a detailed review of the aircraft’s maintenance records, logbooks and any history of repairs or accidents.
Regulatory considerations
In the United States, the Federal Aviation Administration (FAA) sets forth the standards for aircraft certification, maintenance and operation. Part of the pre-purchase inspection should include a thorough examination of the logbooks for the aircraft, engines and propeller to verify that the aircraft has a valid airworthiness certificate, and that all maintenance, modifications or upgrades have been carried out in conformity with FAA standards. This would include Supplemental Type Certificates (STCs), Major Repair or Alteration forms, and Return to Service endorsements.
Reviewing the aircraft’s operational history
The number of flight hours, types of flights and the environments in which the aircraft has been operated by the previous owner have an impact on the aircraft’s value and service life. The higher the number of flight hours and landings, the more likely the aircraft will have a near-term need for significant maintenance or engine overhaul. A history of operations near the ocean or in debris-filled air may mean the presence of corrosion or a higher incidence of maintenance costs. All of these things should be considered before committing to a price or a deal.
Ownership costs
Prospective buyers must consider the total cost of ownership, which includes maintenance, storage, insurance, fuel and any necessary or desired upgrades or refurbishments. Aircraft require regular maintenance checks, which are generally more costly than that for a typical motor vehicle, and prospective owners should budget for unexpected repairs. Hangar rental, insurance premiums and pilot compensation are also factors to consider.
Title search and liens
Professional transaction management is the best way to ensure that the purchase of an aircraft goes according to plan. That should include retaining a qualified aviation attorney to draft your offer letter and purchase and sale documents, and an insured title and escrow agent to conduct a title search on the aircraft and its components. These are critical steps in the purchasing process. The title search will reveal whether there are any outstanding liens against the aircraft which must be cleared before closing the deal. In the U.S., the FAA maintains a national aircraft registry in which all US registered aircraft are included. Having an escrow agent can ensure that the exchange of funds for signed transaction documents are handled professionally and simultaneously. They also ensure the filing of those documents at the national aircraft registry.
Working with a legal representative and title and escrow agent throughout the process is the best way to protect a prospective buyer’s interests. Failing to do so can lead to considerable financial and legal headaches that are best avoided whenever possible.