Buying Aircraft in LATAM? What you Should Know

Overall, Latin America has a lot of raw potential to develop into a powerhouse in the Business Aviation industry. Within South America, Brazil is home to one of the world’s leading private jet manufacturers (Embraer Executive Jets is headquartered in São Paulo) and is also the nation where the region’s largest Business Aviation fleet is based.

According to Gustavo Teixeira, Vice President of Sales for Latin America at Embraer, although each major aviation market within Latin America has its own dynamics, broadly speaking LATAM is not dissimilar to the US Business Aviation market.

“Nonetheless, we see that in some countries, due to geographic or infrastructural restrictions, specific technical requirements are extremely relevant, such as aircraft offering short runway performance, hot and high elevation operation or a specific range capability,” he says.

Juan Pablo Morales Herrerías, Commercial Director at Mexico-based Patriot Aviation, reckons that Latin American countries are 15-20 years behind the US (and other developed markets) in terms of its pre-owned aircraft market. As a result, the aircraft that were being sold in the US and Europe fifteen years ago are the ones that are being purchased and used in LATAM today.

Spending capacity and the cost of flight hours plays the biggest role in justifying the type of aircraft purchased, he says. 

“For example, wealthy individuals in the US can either buy their own US$20 million aircraft or pay $5-6k per hour for private charter. By comparison, in LATAM users can pay US$3k per hour to charter, or buy a jet for $5 million.”

Market structure is also paramount to facilitating the process of buying and owning a private aircraft, says Ricardo Real, CEO of Chile-based Aerocardal. “The Chilean market for instance has more structure and openness than larger markets like Brazil and Argentina, where cabotage is illegal. Chile has a fully ‘open skies’ policy for any registered aircraft to operate.”

Along the same lines, Matías Ramírez, Sales Director of Aviasur, which has a presence in Chile and Peru, believes that the diverse range of economic conditions and regulatory environments across different countries shapes Latin America.

“This can create varying levels of demand, pricing dynamics, logistical and infrastructure challenges when it comes to aircraft sales and operations,” he highlights.

The Popular Private Aircraft Types in LATAM

LATAM’s geography plays a role in the type of aircraft buyers within the region seek. With the Andes mountains acting as the spine of South America, it is unsurprising that turboprops are popular in that region – especially in the Pacific region.

Nestled in the Andean region, Chile, Peru, and Bolivia have unique geographic considerations, Ramírez notes. “High altitudes, rugged terrain, or coastal regions, can influence the types of aircraft needed, and the operational challenges faced by aircraft operators.”

He highlights turboprops like the Beechcraft King Air 200/250 and Cessna Caravan, and jets like the Cessna Citation CJ4 as being common. The Cessna Citation Excel and Citation Latitude are also popular.

The Pilatus PC-12 is getting very popular in Chile, too, due to its performance and the geography of the country, with many short landing strips consisting of grass or gravel, Real adds. In terms of the popular jets, he agrees that older Cessna Citations are prominent, “and, of course, Gulfstream models like the G150, G280, and G550”.

While the Pilatus PC-12 is also popular in Mexico, Morales Herrerías says turboprops are not the first choice for local aircraft buyers since a mistaken belief prevails among Mexican buyers that turboprops are less safe than jets.

Of the pre-owned jet models, “I would say the Hawker 800, Embraer Phenom 300, and Bombardier Learjet 45,” are popular.

Brazil has its own geographical considerations when it comes to suitable aircraft to operate there, but is also a more mature market. 

Perhaps unsurprisingly the Embraer-built Phenom 100 and Phenom 300 are among the most-delivered business jets there during the last decade. “Both jets are a perfect fit for Brazilian operators,” Teixeira says.

“They provide a reliable, versatile, state-of-the-art platform that covers the travel needs of Brazilian customers,” needing Entry Level and Light Jets.

Considerations for Private Jet Buyers in LATAM

Buying an aircraft on any continent should be supported with research and a thorough financial analysis. However, within Latin America each country has its own aviation regulatory framework which can vary in terms of complexity, bureaucracy, and alignment with international standards.

Understanding and navigating these regulations is crucial for aircraft buyers and sellers, as well as operators of private aircraft in the region.

Ramírez highlights that ensuring compliance with local aviation regulations, safety standards, and maintenance requirements adds complexity to the buying process, and may require additional time and resources for buyers.

 “High import duties and taxes on aircraft and aviation equipment can significantly increase the overall cost of buying pre-owned jets and turboprops in the region.”

And Real shares that while there are no specific barriers to buying an aircraft in Chile today, thanks to internal policies to increase aeronautical traffic for commercial and executive aviation, some tax uncertainty remains, because a tax reform discussion is underway in that nation.

“One thing that is making it complicated for some aircraft owners is not having details on the new reform regarding future taxes, exemptions, and recommendations,” he says.

Moreover, local policies in some countries may require specific equipment to be installed which is not necessary in the US (such as Flight Data Recorders), Morales Herrerías adds. “The requirements will depend on the purpose of the aircraft – whether it's for private or charter use,” he adds.

“And when considering where to base your aircraft, it’s important to remember that developing cities may have limited infrastructure, making it challenging to find hangars, crew, and maintenance providers.”

With so many moving parts, especially in Brazil where aircraft purchases are far more frequent than in other LATAM nations, thankfully there are companies who specialise in guiding the import of aircraft into the country. Companies such as Timbro Trading join up the process when an aircraft has been selected and negotiations are underway.

Philipe Figueiredo, CCO of Timbro Trading says “when the deal is assigned to us, we coordinate all phases – such as structuring the financing (when applicable), payments, pre-purchase inspections (for pre-owned aircraft), delivery, export procedures, logistics (including ferry flights) and cargo freights (when importing a disassembled helicopter).”

Other considerations and needs emerge from the aircraft buyer well before the negotiation stage, such as the requirement for local operational and maintenance support. In that respect, Embraer has been investing continuously to present the broadest and most extensive customer support network it can in Brazil.

“Another example is training,” Teixeira adds. “Embraer excels in its training resources. We, along with our training partner CAE, offer a local full flight simulator training centre in Guarulhos for the Phenom 100 and Phenom 300 series in the region.”

In Summary…

Ultimately, each of the region’s 19 countries has its own aviation authority, with its own specific aviation regulations, registration and operational procedures. Teixeira stresses that this requires special attention from buyers, “Especially regarding the aircraft’s configuration and its respective Type Certification approval.”

In terms of market growth, with Embraer having more than 300 jets based in Latin America and a strong future pipeline of deliveries into the region, an upward trend should continue in terms of aircraft purchases there.

More Information From:
Aerocardal: www.aerocardal.com
Aviasur: www.aviasur.com
Embraer Executive Jets: https://executive.embraer.com/
Patriot Aviation: https://patriotaviation.mx/
Timbro Trading: https://timbrotrading.com/