Sales & Acquisitions

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Whether buying or selling, experience helps

Buying or selling a business aircraft is a complex endeavor that involves much more than the normal capitol and tax considerations involved in equipment asset transactions. Occasionally, we see owners who make attempts to handle these transactions themselves with their existing support professionals and despite everyone's best intentions, their results vary dramatically. Seeking the assistance of a qualified aircraft broker will help to prevent a myriad of headaches down the road.

We bring to bear over 25 years of aviation experience and relationships with legal and tax professionals who specialize in aviation transactions.

Conducting a proper Pre-Purchase Inspection

Pre-Purchase inspections are used to determine that an aircraft is as advertised and in airworthy condition. Pre-purchase inspections are completed at an agreed upon maintenance facility and are normally paid for by the buyer. Any discrepancies that are discovered by the maintenance facilities are open to negotiation between buyer and seller.

Sounds simple right? Wrong. IFC has represented clients in many of these inspections and, in almost every case, saved the client thousands of dollars by recommending inspections or pursuing discrepancies that would otherwise have been overlooked.

For example, in a recent transaction where we represented the seller, the maintenance facility reported that there was 10% life left remaining on the brakes. Although this was considered 'airworthy' and therefore officially not the seller's responsibility, it became a major negotiating point to the tune of $80,000. IFC reviewed the method used to measure the brake life remaining and determined that the maintenance facility had not followed the manufacturer's procedure. After a re-measurement that we requested, the brakes tested at better than 70% life remaining. Had we not pursued this assessment, the owner could well have been pressured into needlessly replacing the brakes to the buyer's benefit.

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Frequently Asked Questions

  • What is the process for purchasing a pre-owned aircraft?

    Once we have determined what model of aircraft best suits the clients needs, we will utilize our network of contacts to explore available on and off market aircraft. This search will narrow down the field to the most viable candidates.

    Next, IFC will send a team to physically review each of the candidate aircraft. This will involve a careful visual inspection, confirmation of advertised equipment and condition, and a cursory maintenance logbook review.

    IFC will make recommendations to the buyer regarding the offer, terms and pre-purchase inspection plans. We will review the Purchase Agreement with the owner, an aviation attorney and tax professional as needed.

    With a signed purchase agreement and deposit placed in escrow, the aircraft will be flown to the maintenance facility for the Pre-Purchase Inspection. IFC will accompany the aircraft and oversee the intake process. Once the work has begun, IFC will oversee progress both in person and remotely and coordinate with the buyer to discuss any discrepancies noted. Normally the seller will approve resolving discrepancies concurrently with the rest of the pre-purchase inspection to save time. Once the inspection is complete and all discrepancies have been resolved, IFC will oversee a test flight to confirm proper operation of all systems and prepare the aircraft for closing and delivery.

    Closing can take place in person or remotely with a conference call. All sale documents are signed prior to closing and submitted to escrow. Verbal confirmation will allow those documents to be released at closing and escrowed funds to be transferred to the seller. Delivery will often take place at the maintenance facility but must be carefully planned to comply with state sales tax law.

    After delivery, it's time to bring the airplane home and deploy it into service for its new owners.

  • What are "Back to Back" transactions?

    In a "Back to Back" transaction, a broker will enter a Purchase Agreement with a seller using the true buyer's funds in deposit and simultaneously enter a Purchase Agreement with a buyer for the same aircraft. Once the pre-purchase inspection is complete, both Purchase Agreements are closed simultaneously and the broker walks away with a markup unknown to both parties.

    These arrangements are problematic and are almost always done to conceal elements of the transaction from the buyer. Often the buyer is told that they will not be charged a commission for the transaction or that a trade can be made at an usually high price for the trade-in aircraft.

    Often the true buyer is kept isolated from the true seller in order to prevent the broker from being cut out which could easily happen considering that the true seller has agreed to sell the aircraft at a lower price than the true buyer has agreed to pay. This markup often exceeds industry standard commissions but is never exposed to either true party in the transaction.

    Indiana Flight Center maintains that these types of transactions often have unethical motives and will never engage in this practice. Further, we will do our best to avoid transactions where another broker is known to be doing this.