June 26, 2021
Is Aircraft Acquisition Management Worth It?
Buying a Private Jet for Sale is a Complex Process
If you’ve ever purchased real estate, you know that there are many moving parts to the process with multiple entities responsible for carrying out the many tasks involved in making the transaction happen.
Business jet acquisition is similar and requires profound knowledge of the aviation industry to smoothly carry out the purchase, accounting, regulatory aspects, and registration. Missteps or failing to foresee potential issues with the process can lead to delays and other difficulties.
To prevent such things, many aircraft buyers - especially those looking at used private jets - prefer to hire an aircraft acquisition management company to handle every critical aspect of the transaction. For them, the peace of mind is absolutely worth it.
The Process of Buying a Private Jet
Those in the market for a luxury private jet for sale have a lengthy list of steps to take before closing the deal and flying away in their pre-owned aircraft. Some of these steps in the process occur simultaneously, requiring a skilled hand to successfully juggle them.
And while an International Aircraft Dealers Association (IADA) Accredited Aircraft Dealer can certainly help buyers navigate the process, for some buyers, hiring an aircraft acquisition management expert quells their fears and lessens stress.
Step One: Identifying the Desired Type of Aircraft
The type of aircraft someone chooses to buy is generally dependent upon business needs. Someone with extensive experience in a variety of aircraft and prices can narrow down the list of choices for buyers.
Considerations can include frequency of flights, distance of flights, number of passengers, required cabin amenities, and annual cost of ownership. For individuals with personal pilots, avionics system preferences may also need to be taken into account.
An aircraft acquisition manager is able to take every consideration and develop a short list of aircraft that meet the buyer’s needs. The buyers can be confident that they will eventually end up purchasing a private jet that is a pleasure to own and fly and that meets or exceeds their expectations.
Step Two: Drafting and Submitting a Letter of Intent
At this stage, the buyer’s aircraft broker will submit a letter of intent - essentially an offer letter with stipulations - to the seller. This agent will then arrange for a visual inspection and demonstration flight so the buyer has a better understanding of the aircraft, its capabilities, and its features.
This, of course, occurs because the buyer was able to narrow down aircraft options based on the acquisition manager’s recommendations, and identify aircraft that fit within their budget and scope of use.
Step Three: Submitting the Aircraft Purchase Agreement
If after the demonstration flight and visual inspection the buyer wishes to purchase the aircraft, it’s time to draft an aircraft purchase agreement that outlines the specific terms of the purchase. Generally, the buyer’s agent undertakes this task.
However, an aircraft acquisition management expert can come in clutch at this stage; their experience and industry knowledge can hasten negotiations in favor of the buyer.
Step Four: Executing the Pre-Purchase Inspection
After the purchase terms are negotiated and agreed upon by all parties involved in the transaction, the aircraft is transported to an authorized inspection facility on neutral turf, where it undergoes an extensive pre-purchase inspection of all systems and functions.
This is much like the inspection a home buyer may pay for prior to purchasing a home, and is absolutely vital when purchasing a pre-owned aircraft. Skipping an inspection may be commonplace in certain housing markets; skipping an inspection of an aircraft is not.
Step Four: Receiving and Examining the Inspection Report
After the inspection, the facility provides a report of any aircraft conditions deemed not airworthy. These discrepancies are compared to the delivery conditions in the purchase agreement.
An aircraft acquisition manager, with collaboration from an IADA Accredited Aircraft Dealer, can help buyers understand the report and determine the best next steps.
Step Five: Issuing Technical Acceptance
After identifying discrepancies revealed in the inspection report, the buyer and their agents will likely request aircraft repair of the seller prior to agreeing to continue with the transaction.
Just as a real estate agent would help a home buyer continue negotiations for repairs after a home inspection, an agent and acquisition manager can assist in getting the buyer what they want in terms of remedying issues revealed in the inspection report.
In some cases, the inspection report shows a litany of issues with a pre-owned private jet for sale, and it’s unwise to move forward with the purchase. Again, the expertise of a buyer’s agent and acquisition manager can help end the transaction and continue the process with a different business jet.
Step Six: Handling Closing Procedures
After technical acceptance is issued and as the jet is undergoing repairs prior to purchase, an aircraft acquisition manager and buyer’s agent are working diligently behind the scenes to complete many steps, such as registration, insurance, legal documentation, and providing the private jet financing company with necessary information. They place all applicable documents with the escrow agent before closing.
Without an aircraft acquisition manager and a reputable and honest aircraft dealer or broker working for the buyer, the process may not go as smoothly or quickly as it could. With so many things to do simultaneously, a novice hand may miss important steps or fail to submit documentation in a timely manner, thus forcing the extension of the closing date.
On the day of closing, much like with a real estate transaction, the seller and buyer will sign their respective sales contracts, and the buyer leaves with a private jet!
Find Private Jets for Sale at AircraftExchange.com
After the acquisition manager has helped the buyer create a shortlist of the makes and models of aircraft to consider, the buyer’s IADA Accredited Aircraft Dealer will locate business jets for sale from the vetted listings on AircraftExchange.com.
IADA Accredited Dealers are trustworthy and committed to upholding high ethical standards and have earned the respect of their peers and other aviation service providers.
Search for private jets for sale on AircraftExchange.com, and get started with the purchase process by contacting an IADA Accredited Aircraft Dealer.