With some markets swinging into sellers’ territory and with avionics mandates looming imminently, Jet Tolbert offers thoughts on what a business jet buyer should be asking their broker in 2019.
There are some important questions all aircraft buyers should seek clarification on prior to buying a business jet or turboprop in 2019. With upcoming aviation mandates, some of the key questions buyers should ask their brokers center on ADS-B compliance.
Following are the top three questions I believe will help those who are shopping the market for a business jet to avoid making a purchase they’ll end up regretting…
1) Does the aircraft have ADS-B? If not, has the seller arranged a slot for an ADS-B installation?
Buyers of business aircraft need to know about the details of a prospective aircraft’s compliance, not just whether the airplane conforms to the ADS-B mandate. It’s important for the buyer to be as well-informed as possible, asking their broker first.
With the deadline for ADS-B compliance less than a year away and many aircraft yet to be upgraded, one of the big questions within the industry is how many airplanes will be grounded when the deadline passes on January 1, 2020.
Every buyer shopping today’s used jet and turboprop marketplace needs to be thoroughly aware of the circumstances surrounding an aircraft of interest with respect to its ADS-B compliance. If it does not already have ADS-B installed, the buyer should at the very least discount the aircraft’s value, based on the cost of the most feasible and user-friendly ADS-B solution for that make/model.
Moreover, buyers should seek to arrange for the necessary upgrade to be accomplished at the time of purchase.
If the aircraft of interest does have ADS-B installed, it’s worth finding out whether the upgrade was accomplished using an aftermarket installation with add-on or ‘stand-alone’ equipment in order to meet the requirement?
Alternatively, it may have been accomplished with a factory installation, utilizing upgrades to the factory-equipped avionics suite and providing a baseline upgrade for future enhancements and updates. Though not always the case, this option may be costlier to perform upfront, but may well prove favorable in the long-term.
Buyers may find that sellers are opting for the cheapest solution, covering the necessary bases to promote their aircraft as being compliant with the ADS-B mandate. It is the responsibility of the buyer to work with their broker to establish the facts.
2) Do different ADS-B solutions really matter?
On many jet models, the OEM’s ADS-B solution is accomplished by sending the factory installed avionics suite back to the manufacturer for hardware and software updates. This can sometimes be more complex (and thus expensive) than the solutions offered by non-OEM providers that are usually achieved by installing additional equipment that does not interface with the current avionics suite (hence the term ‘stand-alone’ solution).
Often in older Light and Mid-size Jets the stand-alone option does not limit possible future upgrades. However, many newer or Large Jets have a more complex issue for buyers to consider. These aircraft tend to have more integrated avionics suites. Moreover, there may also be multiple mandates to consider beyond ADS-B, including FANS 1/1A for Atlantic crossings and CPDLC for European flights.
In these more complex applications, while the use of a stand-alone upgrade can be a cost-effective solution, they can also make the aircraft’s operations slightly more complicated as pilots will be required to enter the same information into more than one place to ensure that all navigation systems are following the same instructions.
Additionally, because stand-alone installs don’t update the existing software you may find aircraft that advertise ADS-B compliance but have outdated and soon-to-be unsupported avionics systems if they are not soon upgraded. So those who are in the market to buy an older aircraft should do their homework with their brokers.
3. What does the market say?
It is worth buyers checking the market to see whether aircraft with both types of upgrades are selling, or whether the aircraft with a particular ADS-B or FANS 1/1A upgrade is lingering on the market.
A well-connected broker should offer some transaction history of aircraft with the different types of upgrades, highlighting which might be less desirable in the current marketplace. This information will give you some good leverage when you’re negotiating a price with the seller.
While avionics mandates are a very hot topic today, the above information should highlight that it’s important to work with a broker who has expertise in the aircraft types you are interested to buy. There are other important questions to ask, though, including some of the less obvious items like potential Airworthiness Directives (AD) and Service Bulletins (SB) that may be coming down the line.
Choosing the right buyer’s agent will help you stay ahead of the curve with all aspects of market and technical considerations. After all, an established brokerage will want to be there to assist you with the future sale of today’s acquisition…
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