- 08 Jul 2021
- René Armas Maes
It’s important to ensure the company jet offers the best value for money. Andre Fodor shares experiences of when conversations helped change the direction of an aircraft purchase…Back to Articles
Beyond the obvious high costs (which Flight Departments work hard to minimize), private flying provides tangible benefits to their owners, and plenty of value to help justify the expense to the corporations who utilize business aircraft. But it's important to ensure the jet you utilize serves your needs best...
Following are three occasions when my involvement in aircraft selection played a part in the acquisition process.
Having been hired by a Texan client previously to help him acquire an aircraft and better understand the market, a few years later he called again. This time, he explained, a good friend had decided to buy his first aircraft.
Unfortunately, this friend had gone head-first into the world of online airplane shopping, hoping to unearth the next great buy. Being from Texas, bigger was better, and my former client’s friend had found an older model Large Jet at a “very good price” that he’d already paid the deposit for. That’s where I was drawn into the audit process.
To cut a long story short, this ‘attractively priced’ older bird was just a few hundred hours short of needing a complete landing gear overhaul and engine hot section inspection. Moreover, it had aged for long enough that spare parts were difficult to find.
All-in-all, the purchase price would easily have doubled within a few months of the title transferring, with the new owner needing to spend a huge sum of maintenance money to keep the airplane airworthy.
At the end of a long, sobering lunch, the client agreed to take a hit on the deposit, and we moved on to smaller business jet territory, where the client’s budget could afford a higher pedigree jet. By right-sizing the airplane search, big trouble was averted.
On another occasion, a colleague of mine was hired to replace a retiring flight department manager who’d amassed forty years’ service with his company. The aircraft my colleague inherited was a more-than-thirty-year-old original Diamond Jet. He called me seeking help with the training and insurance.
Trying to find someone who could provide initial training and checking on an airplane of this age proved to be a real challenge. Finding an insurer willing to cover the aircraft was harder still.
Since the flight department had been operating the jet for such long time, the team had done an outstanding job in keeping it airworthy. But spare parts were proving increasingly hard to find, resulting in long maintenance times.
We brought an experienced insurance broker into the conversation with the aircraft owner, who, until then was unaware that his aircraft had reached the end of its useful life. Ultimately, we arranged one last nine-month period of insurance, during which time we procured a replacement pre-owned jet to be delivered at the end of that term.
The nine-month period also allowed for training, enabling a smooth transition ahead of delivery of the replacement aircraft.
As for the Diamond jet, at the end of its long and faithful service it was donated to an A&P maintenance school where it was used to train new mechanics. It was written of at a higher value than if it had been sold for scrap.
Finally, one time I received a call from an OEM salesperson. His professionalism was to be commended. He sincerely wished his customers to be well-served, and he worked hard to deliver the best product for the mission profile.
He was calling because he was in the process of selling an aircraft to a first-time buyer who, even before his first visit, had already decided on buying a specific model. Having done his due diligence, the salesperson felt the aircraft of choice was not the best fit, and wanted me to visit the customer with him.
As a rule, I try to learn about a person’s lifestyle, travel habits, and family life – all of which provide a picture of a prospect’s needs, helping to provide them with the right equipment for the long-term.
During our chat the customer told me that his daughter would soon be married, and that he would soon become a grandfather, from his son’s marriage.
He had selected an airplane with a maximum cabin occupancy of six seats, yet his load requirement was going to be for at least eight seats in the coming years, if he wanted to take everyone together to the family ranch.
Once we discussed that element, we structured his aircraft purchase a little differently: The six-seater jet came with a pre-established trade-in date and value, since the eight-seater jet he needed was not due to be certified for another two years.
The newly structured deal meant that he would get immediate use of his new purchase, and, as his needs changed, the right aircraft would arrive just-in-time.
It’s hoped that the above anecdotes show how a deeper understanding of budget, need, and how those needs change can help prevent expensive, and regrettable mistakes when your corporation is acquiring its next jet.
As flight department managers, the deeper understanding of the inner workings of business jet ownership and a rich experience we offer, can provide valuable insights to ensure the costs associated with aircraft ownership remain justifiable to our employers – not only for now, but into the future.
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