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Last month we delved into the parameters companies use to define their needs for a business aircraft including where they fly; how often; how many passengers- and the like. This month we look at what the prospective business aircraft buyer needs to know when shopping for that aircraft. We also examine how to ease that shopping chore with some low- to no-cost extra help.

Dave Higdon   |   1st October 2005
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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So- you’ve defined your needs... now it’s time to shop for a business aircraft.

Last month we delved into the parameters companies use to define their needs for a business aircraft including where they fly; how often; how many passengers- and the like. This month we look at what the prospective business aircraft buyer needs to know when shopping for that aircraft. We also examine how to ease that shopping chore with some low- to no-cost extra help.

We’ll begin with some must know stuff- and move forward from there.

Matching need to ability

Knowing the performance and costs aspects of a potential aircraft buy are essential pieces of information for matching need to ability- and several ways are available to the prospective purchaser to do just that. The hardest- though- may at first appear the simplest: pouring over sets of numbers including aircraft performance charts looking for fits in speed- range and airport performance. And you’ll also want to examine the financial side… purchase costs- direct operating costs- fixed costs- plus any and all tax implications.

Virtually every manufacturer offers information that covers those bases- though the depth of the data varies from company to company. You can find that data on the company’s website without exposing yourself to the potential for sales calls from the manufacturer’s marketing staff. You can also acquire hard copies of that information through the manufacturer’s brochures.

Regardless- you could wind up spreading prints of web pages and brochures out across tables and floors until co-workers think you’ve opened a branch office. And picking the right airplane still leaves unresolved how to structure the purchase- how to crew the aircraft- and how to schedule and maintain this new- expensive asset.

Settle in and start the numbers crunching – you’re going to be a while.

Shopping Guides

You cannot really narrow the search without running all the numbers; you can’t just kick some tires here- not with the dollars at play. You can reduce some of your load from pouring over brochures and taking notes though.

Other- less labor-intensive methods exist for performing the potentially laborious task of winnowing down a long list of options to something more manageable for tire kicking.

One of the oldest and best-known avenues is the services of Conklin & de Decker. Now in its 21st year of business- Conklin & de Decker offers a variety of products designed to aid the aircraft shopper in comparing available aircraft to known needs.

The company- with offices in three different parts of the country- has developed database products on aircraft performance- operating costs- and life-cycle costs- to name just three. Conklin & de Decker also offers its Aircraft Ownership Analysis tool to help prospective buyers determine how to acquire their aircraft: Full ownership- aviation fractional ownership- managed aircraft and more.

For companies in need of multiple aircraft- the company also offers a Fleet Planning tool to take into account differing needs and usage when shopping. You can learn more on this service from the company by contacting its headquarters: Conklin & de Decker Associates- 62B Cranberry Highway- Orleans- MA 02653- Tel: +1 508 255 5975; Website: www.conklindd.com.

Another method for selecting an aircraft based on defined needs comes from Air Power Software in the form of several comparative 'Budget Analyzer' tools. Air Power offers these packages in several forms- starting with a broad tool that offers 175 of the most popular jet- propjet- turbine helicopter and piston aircraft. Other versions focus solely on one type of aircraft – jets- turboprops- helicopters or piston engine aircraft.

By working from your own budget- these tools can help narrow you shopping efforts to aircraft that meet those parameters. For more information- contact: Air Power- 7251 West Lake Mead Blvd.- Suite 300- Las Vegas- NV 89128; Tel: +1 702 296 6633; Website: www.airpowersoftware.com

Before you run away screaming…

Perhaps this is becoming a bit overwhelming – like getting knocked down when trying to drink from a fire hose- instead of slaking your thirst by sipping from a fountain.

You’re feeling overwhelmed with numbers – numbers for speeds- numbers for ranges- numbers for runways. And- most intimidating of all- numbers for costs – purchase costs- direct operating costs- amortization costs- maintenance costs- aviation insurance- and on and on.

Then it may be time to enlist the help of a professional seasoned in the fine art of matching a prospect’s varied needs – speed- reach and costs – to the plane that fits them best.

If you’ve at all narrowed down your list of potential planes- you could simply search the Internet for dealers carrying those models. Or you could put yourself in the capable hands of a broker.

Dealers generally earn their keep from the seller of aircraft- which means usually the buyer incurs no cost for working with a dealer. Brokers likewise tend to earn their keep in much the same way – very much like the Real Estate agent whose commission comes from the seller who listed the property. Either way- the bottom line important to the shopper is the availability of experts who will work with them to find the best fit in a flying machine.

Associations such as National Aircraft Resale Association- or NARA (www.nara-dealers.com) represent consultants- dealers and brokers involved in the sale and resale of new and pre-owned business aircraft.

An experienced dealer or broker can help you resolve pressing questions. Do you buy outright or buy a share through a fractional? Do you set up your own flight department to handle crew and aircraft maintenance- or contract with an aircraft management company that can provide crew- maintenance and revenue by offering your new company plane for business charter when not used by you?

A good broker or dealer can also help you decide whether to establish a new company to own and operate the aircraft – then lease back to the parent company and other clients for operations – or keep the aircraft as an in-house asset.

And don’t forget the factory folks…

By no means can we neglect mentioning ‘the factory’ as a source of help trying to match your mix of missions to an airplane – new- if possible- of course- but not necessarily.

When companies make part of their living placing new airplanes to replace old- they have an edge in knowing where and when pre-owned airplanes should come into play – if it’s going to come into play.

Savvy business aviation people know that some of the best values in corporate aircraft never come on the market – publicly- that is. Nonetheless- when the new airplane is delivered- the old one already has a new home. The factory reps will work with you much like the brokers and dealers. Of course- these folks really work to sell new planes; sometimes helping place a pre-owned one can help them sell a new one. But they have colleagues who will help you find the right used planes- most likely with a great factory service history.

Who knows- a factory-new bird may be the right fit when all the data is in. But factory-reconditioned can be a great overall value.

More things to consider

Many a company has managed a first-aircraft purchase on their own- absent of outside professional guidance. But in my experience- companies that managed that acquisition on their own benefited from the presence of someone in-house with enough aviation expertise to navigate what could be a minefield of issues for the uninitiated.

For those who think they can manage their own aircraft acquisition- here are some issues and terms you will need to know – or will learn- one way of the other.

Annual Inspection: Required of all aircraft operated under FAR Part 91- the rules that govern the majority of private business jets and personal flights. As its name implies- this inspection must be performed every 12 months.

Buying an aircraft for sale lacking a current or recent annual could deprive the new owner of both money and time. So asking about when the last annual occurred and what it found are important questions regardless of what you’re considering.

Airworthiness Directives: Virtually no aircraft flying has gone very long past initial certification without the FAA issuing an Airworthiness Directive designed to correct a problem or issue with the subject airplane. And some aircraft long in the fleet may have multiple ADs- as they’re called.

Assuring yourself that all ADs have been identified and complied with is an issue as important as the question about the Annual Inspection. Since some ADs give the operator considerable time to comply- knowing which ADs are resolved can be an economic issue as well as the safety-of-flight issue that generally triggers the FAA to issue these directives.

A seller should be able to show you a list of applicable ADs and their compliance status. Do not sign on the dotted line without getting that question answered.

TBO or Inspection Intervals: These numbers are related to the engine or engines of an aircraft and- in many cases- as advisory only for aircraft not flown for hire – that is- non FAR 91 operations.

Time Between Overhauls are set by engine makers as a life limit for their powerplants. How near or far an engine is into that cycle can have an immense bearing on aircraft price – as well as indicate how close you might be to spending more money after the purchase.

Inspection Intervals generally relate to turbine engines and the time cycle for inspection the hot sections of the engine – the combustion chamber- turbine wheels and exhaust sections exposed to the extreme temperatures of operation.

So- for example- if a turboprop engine with 1-500 hours has a 3-500-hour TBO and a 1-750 hot-section inspection cycle- that hot-section inspection looms only 250 hours away. You may want to ask for a price adjustment or an early inspection- in that case. But that same engine won’t be up for a complete overhaul for another 2-000 hours – six to seven years for the average business aircraft use of 300 to 350 hours annually.

Title Search: Just as states require real estate transactions to include a title search to reveal any encumbrances- so- too- do aircraft finance providers usually require a title search before they’ll release funds for a purchase.

As mobile- alterable assets- business aircraft have been stolen- moved off-book to avoid financial issues- even moved out of country to avoid seizure for back taxes- lawsuit resolution and other reasons.

A title search should reveal the aircraft’s entire ownership history as well as any encumbrances that may complicate the purchase – a tax lien- mechanics lien or other legal entanglement. Consider this as mandatory as ADs and other regulatory issues since failure to assure a clear title could result in the loss of the aircraft should a prior issue arise that takes away the plane.

This just about covers the shopping issues involved in selecting a business aircraft that matches your defined needs. Next month we’ll delve more into the various options for purchasing and owning that business aircraft- what the differences mean and how to decide. In the meantime- happy flying.

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