- 25 Aug 2021
- Sherryn de Vos
- AvBuyer Africa Articles
Looking to buy a private airplane for business or personal use? Don't underestimate the process - check out these steps to help smooth the way.
Currently, the African market has seen a surge in private aircraft sales, with a general rise in all categories of aircraft, whether private jets, turboprops, or helicopters. The customer base is also incredibly diverse, with first-time buyers and existing aircraft owners investing shopping the market.
Covid-19 has had a significant impact on the private aviation industry as a whole, with companies looking toward private charter, and scouring the market for jets for sale amid the significant travel restrictions that have plagued Africa throughout the pandemic.
With this in mind, what are the key considerations to buying aircraft? We’ll explore over the following paragraphs…
Assess Your Budget
When buying a business jet for sale, turboprop or helicopter, not only do you need to consider the price of the actual airplane for sale, you will need to take into account the day-to-day management and maintenance of the asset.
From the storage of the aircraft, to the operating costs, you will need to factor a plethora of costs in to your monthly expenditure. Consider the hangarage, for example: A small, piston aircraft at a small airport may cost the owner only a few hundred dollars per month to store and manage the asset.
In comparison, a large business jet, such as a Gulfstream G600 or Bombardier Global 6000 could cost hundreds, or even thousands of US dollars to park, per day (depending on the airport). This will translate into tens of thousands of dollars per month, depending on the airport and the country.
You will need to consider the labor and staffing factors too. On average, labor accounts for approximately 35% of the overall fixed operating costs. Refurbishments as well as regular maintenance will also need to be considered and integrated into your budget, as will the fluctuating cost of fuel.
Conduct an Operational Assessment
An operational assessment will determine what kind of aircraft your company will need. Consider the following:
- The destination(s) and frequency of the travel;
- The typical number of passengers per trip;
- The types of missions or travel being undertaken.
While a Super Mid-Size Jet like a Cessna Citation X might be preferable, due to its speed, size and range, if you will be flying into a more remote regions with untarred airstrip, a turboprop might be more suited to your needs.
Should you be doing more regional travel, and flying less than 600nm, typically carrying two to four passengers, a Pilatus PC-12 might be a better fit. Not only does it offer good space and useful load, it has a block time difference of less than 20 minutes.
What is more, the overall costs associated with an aircraft like a PC-12 is significantly less than a business jet in both respects to hourly running, as well as the maintenance. Other popular turboprops include those built by Beechcraft (King Air) and Cessna (Caravan).
Irrespective of the aircraft type that fits the mission, you should always “Analyze the level of completeness of maintenance logbooks, records and history,” advises David Lewis, Director of Investment Aircraft. “Logbooks, in particular, have a significant impact on value as they can prove proper maintenance throughout an aircraft's life.
“You can ascertain whether [an aircraft for sale] has had any damaging events, and if so, whether the repairs were carried out properly.”
Investigate the Aircraft Management Company
Leaving your aircraft in the right hands needs to be one of your biggest considerations when choosing your aircraft. If you do not have an in-house Flight Department already established, it may be that placing your aircraft on the operating certificate of an Aircraft Management company is the better option, especially for first-time buyers.
Safety should always be top of mind, and a full due diligence will need to be conducted on the management company. It is vital to find out what the company’s accident, incident and violation history is.
Should there have been an incident with the company, unpack what their response was to it, and how they managed it. Ensure that there is a safety management system (SMS) in place, and that there are third party auditors to reinforce the safety management system. For example, is the management company IS-BAO (International Standard for Business Aviation Operators) accredited?
It will be important to involve the management company with the acquisition of the aircraft. So, spend time prior to purchasing the aircraft picking the right company. They will need to be legally permitted to manage your particular aircraft, and they will need to comply with the various aviation regulations for that specific aircraft.
It is also worth considering that some aircraft management companies offer a charter option, allowing you to offset some of your ownership costs. The revenue received from chartering your jet, when not in use, can cut your cost of ownership – but you will need to be flexible as your aircraft may not be available when you need it. Can the management company guarantee you use of another aircraft from its fleet on such occasions?
In addition, chartering your aircraft increases your total overheads, increases the frequency of maintenance, and can put up to 400 hours per year onto the aircraft. So you will need to carefully work out whether this solution is worthwhile for you.
Hire Professionals for the Acquisition Process
Private airplanes are high-ticket items, and even a small mistake could end up being a costly affair. Aircraft acquisition is a long, complicated process, and you will need an experienced broker by your side.
The right broker will demonstrate a keen insight into the current aviation market, and will have savvy market knowledge. Accurate pricing will be one of your top considerations when choosing an aircraft, and an expert will be able to assist you with ensuring you are not making a purchase on an aircraft that is above market value.
The aviation market is volatile and it can change from one day to the next, so select someone to represent you who has their finger on the industry’s pulse.
Combine their expertise with that of your financial advisor, your legal team, as well the aircraft sales company for well-balanced expertise. Your financial and legal teams will be able to provide you with real-time insight into your financial status, while the broker will provide external insight into the market.
“Choose someone who is dedicated to provide you with the service and guidance that you need through the process,” Lewis emphasizes. “This can, and most likely will, save a lot of time, trouble and heartache.
“The correct person will help you avoid many potential pitfalls by having a good knowledge of the industry and the ability to pick up on potential red flags. They will also help you find the right solutions to challenges in an effort to help you take delivery of the correct aircraft in a shorter space of time.”
Ensure that you complete a full due diligence and operational assessment prior to making any purchase of an private airplane for sale. It is imperative to know what your current standing is in the market, as well as what your future trajectory looks like.
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