Buying&Selling 1.qxp_Finance 19/04/2022 10:33 Page 1
BUYING & SELLING AIRCRAFT
Aircraft Buyer Questions (Part 4): Setting Timelines Concluding his series, René Armas Maes discusses setting timelines for an aircraft purchase, from understanding market conditions, to arranging financing, negotiating the purchase contract, executing a Pre-Purchase Inspection, and taking delivery…
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ith an almost non-existent market for newer, low-time pre-owned business jets currently, an increasing number of buyers have been turning to the OEMs to order factory-new jets, which, in turn, has created a growing backlog of orders that has extended the waiting time to receive a new aircraft. Buyers seeking to purchase a new jet from a manufacturer will need to work potentially two-to-four years ahead of when they expect to take delivery. Of course, just because the listed inventory of preowned business jets is extremely low (less than 4%, according to AMSTAT data at the time of writing), and is well picked over, doesn’t mean to say finding a lower-time, newer model is an impossibility. But several such transactions take place off-market, meaning additional time should be allowed to source the right aircraft from an owner who is willing to sell, and inevitably a premium price will need to be paid. 38 Vol 26 Issue 5 2022 AVBUYER MAGAZINE
Nevertheless, a well-maintained older aircraft with acceptably low times on its engines could be worth upgrading with a cabin and flight deck refurbishment, given that many of these models, though also commanding premiums on the market currently, are selling at well below their new prices.
Arranging Financing
In many cases, buyers opt to finance their aircraft acquisition. If financing is the route you plan to take, then you’ll need to understand the process, and allow for this within your pre-purchase timeline. Typically, an aircraft financing application starts with an assessment of the buyer’s financial situation, and identifying the subject aircraft to obtain pre-approval with the lender. This should happen before you begin your search for the specific aircraft you wish to buy. The bank will require you to provide an approximate aircraft purchase timeline, along with the aircraft type and www.AVBUYER.com
