Buying&Selling 2.qxp_Finance 21/07/2021 15:20 Page 1
BUYING & SELLING AIRCRAFT
How Not to Save Money Ahead of a BizJet Sale What are some common mistakes business jet sellers do that unintentionally limit their pool of prospective buyers? Dave Higdon shares some insights… orporations can occasionally make decisions to save money that they later regret, after those decisions end up costing them more money than they saved. Such dichotomies occur at all levels of business and personal life, usually because of a knee-jerk reaction to some stimuli. In Business Aviation, buyers and sellers can sometimes risk jeopardizing a transaction because decisions that supposedly “save them money” impact the prospect of getting the aircraft financed, or cost the buyer in some other way. Indeed, it’s because of the potential for these known unknowns to impact the options for financing the transactions, that business aircraft experts counsel using professionals to help manage the purchase – or sale – of a business jet or turboprop.
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44 Vol 25 Issue 8 2021 AVBUYER MAGAZINE
Short-Term Gain, Long-Term Loss
Let’s start with the oft-repeated discussion about whether to continue with an hourly maintenance program once a decision is made to sell the plane. These programs help insulate operators from expensive surprises when it comes to engine, airframe, avionics, and APU maintenance. Coverage varies, depending on the program and the level selected (it’s important to know exactly what the program covers). The most comprehensive coverage comes in the form of a ‘tip-to-tail’ program incorporating everything. Other programs may cover only one of those elements. Financing entities like these programs because they can boost the residual value of an aircraft. But many a financing opportunity has gone awry because the seller chose to reduce the operating www.AVBUYER.com
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