- 30 Mar 2023
- René Armas Maes
- Aircraft Ownership
Selling an aircraft undoubtedly requires market knowledge, but besides knowing how to price your jet to make it attractive, it’s important to understand what a potential buyer may value, including what features may obtain a premium price. René Armas Maes explores...Back to Articles
Previously, we considered ‘How to Price Your Jet with Good Market Intel’. But in addition to reviewing the many important sources of market intelligence to correctly price your business jet for a successful sale, it’s worth thinking about ways to differentiate your aircraft on the market, ideally helping it achieve a higher sale price.
There are many aspects to consider in this regard, including a possible paint and cabin refresh, and upgrading outdated systems in the cabin (though the associated capital expenditure and aircraft downtime will need to be weighed-up when deciding if it’s worthwhile).
When considering an upgrade or refurbishment with an eventual sale in mind, it’s important to take a step back from your own preferences and operating needs and think as neutrally as possible.
If you wish to widen the appeal of your jet to a larger pool of buyers it is important that it looks and smells fresh, and that the materials and colors appeal to a wide range of prospective owners, most of whom will feel that their aircraft should be an extension of their office or home.
As an extension of either area, buyers will expect a comfortable, convenient flying experience, including excellent In-Flight Entertainment and Connectivity solutions, the latest seating textiles, comfortable lighting that can be altered to support different activities aboard the aircraft, and more.
For sellers hoping to achieve top dollar for their aircraft in today’s market, these priorities set the baseline for the cabin, ideally without leaving the buyer thinking they need to refurbish the cabin again after they have acquired the jet.
While newer aircraft platforms and variants come with many of the latest features, if you own an older model which hasn’t had an upgrade or refurbishment in the last two-to-five years, the chances are that you will need to review very closely how your aircraft compares to similar offerings on the market.
If the carpets, seats or cabinetry are looking tired, dirty or scuffed, a cabin refresh will be needed. And in this regard, it pays to be strategic, prioritizing certain items over others, depending on their market desirability.
Beyond aesthetic interior modifications and exterior paint, cabin and cockpit avionics will also need consideration prior to placing your jet on the market.
Specifically, the In-Flight Entertainment (IFE), In-Flight Connectivity (IFC) and Cabin Management Systems (CMS) of today have been major contributors to the growth of the business jet cabin upgrade market and are also responsible for the significant increase in passenger expectations aboard today’s private jets.
Those expectations continue to evolve with the products, demanding more comfort, faster connectivity, more productivity, and tailor-made, customized solutions installed in the aircraft cabin.
So, if your cabin entertainment, connectivity systems and your CMS are a few years old, it is worth looking at the impact this might have on the marketability and sale price of your aircraft, especially if the eventual buyer is likely to discount the cost of an upgrade from the eventual purchase price.
Electrical outlets, USB ports and LED lighting are all increasingly important for today’s Part 91 and Part 135 Business Aviation operators and users.
Nevertheless, it’s important to be savvy when assessing what needs to be upgraded and what doesn’t. While some aircraft upgrades may help sellers achieve a premium resale value, others do not.
Some upgrades have more value to owners and operators in certain regions than in others. If you choose to upgrade the cabin connectivity, for example, to the latest Air- to-Ground system there will be little value to buyers outside of North America.
It’s worth considering specific IFE, IFC and CMS brands and options. Are they future-proofed (e.g. unlikely to become obsolete within a few years)? Can the existing systems be easily upgraded in the future? This is likely to be important to a buyer who plans to operate the aircraft for the next five to ten years.
Likewise in the cockpit: Is your aircraft’s existing equipment likely to limit certain types of buyer? Does it have the necessary instruments required to fly nationally, internationally, overland- only, or overseas?
For older aircraft, are there any relics of the past in the cockpit such as Cathode Ray Tube (CRT) instruments that will certainly require costly panel upgrades when they inevitably need to be replaced? These are likely to make your aircraft less attractive to would-be buyers.
How does the cockpit compare to similar jets on the market? If others have newer, more functional features, then it’s worth considering upgrading.
The reality is that there will always be more for you to do to prepare your aircraft for the market. No amount of refurbishment or upgrades will be completely compatible with the expectations of every buyer on the market. In fact, most buyers will want to personalize their jet in some way.
So it’s often best to simply focus on the lower-cost portion of an upgrade, perhaps enabling the future owner to customize and complete their desired upgrades more easily, exactly to their liking, at a lower cost.
Think in terms of what will add premium value to your aircraft, cost allocation, and the potential aircraft downtime required to complete the upgrades.
Table A (below) illustrates a plan for a cabin refurbishment and electronics upgrade. It sets out how to determine the most sought-after upgrades and what the return on investment might be. Think in terms of the key upgrades prospective buyers are likely to respond positively to, ranking them on cost.
Are they expensive ‘nice-to-have’ upgrades that the aircraft’s new owner could ultimately take care of themselves or are the upgrades ‘need-to-have’ upgrades that a buyer expects to find aboard today’s jets. Rank the upgrades in order of those you are most likely to receive payback from.
Contact your chosen aircraft broker who will offer insights into the pre-owned market with the price range for similarly equipped and configured aircraft as yours without any upgrade work. With this as context, determine whether the proposed upgrade work is likely to yield a premium sale price that’s worth the time, cost and effort?
If you decide that some (or all) of the upgrade work is worth proceeding with, obtain multiple quotes for the work from MRO shops and research the market thoroughly, drawing up an exhaustive list of upgrade options available to you, and base any decision to proceed on the expected return on investment and the probability of a quicker sale time when you do eventually place the upgraded jet on the market.
The bottom line to an upgrade decision ahead of selling your jet should rest on Capex Investment versus Return. A pristine aircraft that has undergone an expensive upgrade doesn’t always guarantee a quicker sale if the cost of the upgrade pushes the price tag beyond what the market will bear.
And while a realistically priced aircraft with the right cosmetic features and up-to-date electronics which leave scope for further upgrades and personalization is the goal, be strategic. If you decide not to upgrade the jet yourself, make sure you know what upgrades buyers may want to make, what those upgrades will cost, and reflect this in a lower asking price.