- 07 Jun 2023
- René Armas Maes
- Aircraft Ownership
Looking to get the best value possible from your jet sale? Gerrard Cowan speaks to the experts to uncover six common mistakes sellers of private aircraft should avoid making...Back to Articles
With the right aircraft, price and expert advice, selling a private jet should be relatively straightforward. However, some aircraft sales mistakes are surprisingly common.
AvBuyer spoke with a range of brokers and other industry experts to gather their insights into the six most oft-repeated mistakes that private jet sellers should avoid making.
According to Steve Rogers, Partner at Aradian Aviation, private jet sellers will understandably seek the best price they can get for their aircraft – but some take this to the extreme.
Such sellers look at a selection of their type of jets for sale and match their own platform with the most expensive, even if that aircraft “has been on the market for the past two or three years because it is just too expensive”.
Brian Macbean, Director of Credit & Sales at AOPA Aviation Finance, believes that many sellers fail to understand the market value of their aircraft.
Owners often think that keeping current on maintenance and inspection schedules will automatically increase the value of their investment in the aircraft. However, while these are important, there are other factors that will determine what someone is willing to pay.
“This is a relatively consistent encounter,” Macbean adds. “Sellers that have sold aircraft previously have learned from their mistakes, but new sellers are still learning. It’s best to consult and hire industry professionals to make sure your expectations are accurate when you list an aircraft.”
Michelle M. Wade, Partner at Jetstream Aviation Law, notes that some owners fail to recognize when the market has changed or refuse to believe their broker when they are told it is no longer a seller’s market. “A good broker can help prepare the seller and the aircraft for a smooth sales process, and can help the seller correctly price the aircraft for the current market, not the market of six months ago.”
Sellers should not assume that the current market for business aircraft mirrors another sector they might be familiar with, such as real estate, adds Thomas W. Mitchell, Executive Vice President at Essex Aviation.
“While there are tendencies at times that follow general economic trends, it is best to get the opinion of several aviation professionals who are active in selling aircraft of the same model, before getting comfortable with an assumed sale price.”
It is important to price intelligently, Mitchell says, recognising what must be done if an aircraft does not produce much interest and taking action in a timely manner.
“Excessive days on the market is one piece of information any buyer will notice, which will either cause hesitancy, and/or it will trigger an assumed opportunity to negotiate the asking price.”
Aircraft owners must know the status of their relationship with their management company, says Wade. If there have been disputes or misunderstandings, they need to know if the management company will promptly respond to requests for information, supply records, and locate loose equipment or spare parts.
“Will the management company file a lien against the aircraft for an unresolved dispute or will the management company not relinquish possession of the logbooks or take actions which are not in the owner’s best interest?” he asks.
Similarly, there can be delays if sellers fail to tell the Flight Department that they are selling the aircraft and not replacing it. “When strangers are looking at the plane, everyone knows that something is occurring,” he says. “The purchase agreement needs input from the Flight Department – both the pilots and the mechanic.”
Rogers has seen scenarios where corporate owners give the aircraft to their operator to sell. However, the operator may have no incentive to sell an aircraft that is making them money.
Potential buyers “will hear all sorts of excuses like ‘[the aircraft] is only available if you leave it with the operator’, or ‘the owner wants to sell it to someone who will leave it with the operator so he can buy time on it from the new owner’,” Rogers suggests. “Other operators will just not respond to enquiries, or only give minimal information.”
An aircraft broker has extensive knowledge of the aviation market and can provide those selling a private jet with a realistic and accurate assessment of their aircraft’s value, says Brooke Brown, VP of Aircraft Sales & Acquisitions at Elevate Jet, part of Elevate Aviation Group.
They can help set a competitive asking price that attracts potential buyers, while ensuring you maximize your return. “A broker brings an unbiased perspective to the sale, helping you make rational decisions without being influenced by emotional attachment to the aircraft.”
Janine K. Iannarelli, President of Par Avion Ltd, agrees that it is important to ascertain the expertise of the broker you work with. Private jet sellers should interview potential brokers to ensure they are a good fit, checking references. “It’s surprising how often people don’t do that,” she says.
Iannarelli encourages potential clients not just to contact supplied references but, if possible, speak with others in the industry to gather information and feedback regarding the broker they are proposing to work with.
“It requires a little bit of an investigative process...to learn what they can about the candidate broker and get close to a good fit.”
It is also important to be truthful with the broker you choose to represent your aircraft for sale, Rogers warns. This includes questions around damage history. Rogers is surprised by “the number of owners that will duck that question”.
However, he says the owner is not the only source of information a broker like Aradian can use, with extensive files available, along with internet searches and other approaches. Some owners may not even know if their aircraft has damage history, particularly if maintenance logs are in another language.
“The ones that lie to you are the worst because you actually find yourself working against your client,” he adds. “We have even seen owners remove pages from – or lose – maintenance logs to hide the fact the aircraft has damage.
“The value of the aircraft is reduced with damage history, but it is also reduced if it has missing logs,” he warns.
Moreover, misrepresenting the aircraft's condition, history, or maintenance status can lead to legal liabilities and damage the seller's reputation.
And foreign sellers cannot afford to ignore US export and import laws, Wade warns. “If an aircraft is brought to the US for sale, do not tell US customs that it is being brought into the US for maintenance.
“A seller may be required to fly out of the US and then re- enter the US stating that the aircraft is being brought to the US for sale.”
Aradian has worked with operators who did not know how to look after historic aircraft records or keep them in a safe place, though this has improved now that most aircraft records are held by a Continuous Airworthiness Management Organization (CAMO) in Europe, Rogers says.
“It is not just records. We have seen loose equipment supplied with a new aircraft popped away in a cupboard, never to be seen again,” he adds.
And sellers should not take too long to review the purchase agreement they receive from the buyer, Wade adds. “A week is reasonable, but three weeks is generally not. “If you don’t know the location of the loose equipment that is being sold with the aircraft, that can cause a delay,” Rogers warns, which highlights that buyers need to get their ducks in a row before they enter the market.
Finally, it is important to take factors like paint and refurbishments into consideration, says Mitchell. While it is best that the aircraft be as cosmetically pleasing as possible, it would not usually be wise to apply new paint schemes or unique interior colors of the seller’s choice, he adds.
“The chances are that the number of interested buyers will be reduced when attempts are made to make an aircraft especially flashy,” he explains.
“If new exterior paint is considered a wise decision, it may be a selling feature to offer the aircraft completely white (i.e., a blank canvas) to allow a buyer to have room to add the stripes, accents and logos to their taste, and usually at a relatively low cost.”
Ensure the aircraft is in the cleanest and neatest condition when showing it to potential buyers, says Iannarelli. This also goes for the hangar and wider environment.
“There’s no sense having a nicely washed, well-presented private jet for sale in a dirty hangar,” she concludes. “It’s better to pull it out on the ramp and show it in the open air. It’s these little means by which to enhance the presentation that contribute to a great first impression.”
More information from:
AOPA Aviation Finance: https://finance.aopa.org
Aradian Aviation: www.aradian.com
Elevate Jet: https://eag.aero
Essex Aviation: https://essexaviation.com
Jetstream Aviation Law: https://jetstreamlaw.com
Par Avion Ltd: www.paravionltd.com