Buying a private jet is a significant investment in more ways than one. The process of acquiring the right aircraft involves many steps, any one of which, if not handled properly, can waste a lot of time, effort and money. Consequently, you surely want the purchase process to be as efficient and effective as possible.
However, there are several mistakes people commonly make when considering the purchase of a private jet. This article focuses on how to avoid these issues.
Caution: Beware of These Private Jet Purchase Pitfalls
If you talk with private jet owners, some will candidly admit that they have made mistakes when purchasing aircraft. Those missteps may have had a small or large effect, but they certainly had an impact on the overall success of the transaction.
In our experience at Axiom Aviation, the errors below, in no particular order, are the most common:
Mistake #1: Failing to do your homework
The decision to acquire a corporate aircraft can only be made after careful consideration and analysis of many factors. Do you need to travel domestically or does your business take you out of the country? How many people travel with you and what are the average flight leg lengths? Do you fly into remote locations with short runways? Too often, the primary (and sometimes only) factor people consider as they prepare to move forward with a transaction is whether they can afford to purchase the aircraft. Only after a thorough analysis of your travel requirements can you arrive at the proper choice of aircraft.
Mistake #2: Buying more jet than you need
If most of your trips are of a certain distance, with just a handful that exceed it, you may want to consider a jet that works for the majority of your travel. You can always charter aircraft for longer trips. This is also the case when considering how many passengers you have on your trips. Purchasing a larger aircraft and paying for unused capacity can exponentially increase your fixed costs and operating costs. Hangar space is in limited supply today, and purchasing a larger aircraft might make it difficult to find a spot for your newly acquired asset at your home airport.
Mistake #3: Not doing a pre-purchase inspection
Skipping a pre-purchase inspection on a jet aircraft can lead to significant risks and financial consequences. This is a mistake you do not want to make, period! Pre-purchase inspections come in all sizes of scope, and your professional acquisition agent can work with your staff to make an educated decision as to what degree to dig into the aircraft. The recommended scope will depend on a number of factors such as aircraft model, age of aircraft, total time since new, and pedigree. Any pre-buy inspection should entail a thorough records review to ensure compliance with the current manufacturer’s inspection and maintenance program, compliance with FAA-issued Airworthiness Directives, manufacture mandatory service bulletins and more. The aircraft maintenance records should also be evaluated to ensure they are complete and continuous. Are there signs in the records of structural or engine damage Incidents? If so, will any or all of them have an impact on the value of the aircraft? Are there repeated discrepancies whereby the root cause hasn’t been addressed? These are just a few of the significant risks that you will want to know about before you make a purchase.
Mistake #4: Being tempted by an attractive price
It is best to look at aircraft purchases through the lenses of quality and value rather than cost alone. Buying a jet that has a slightly higher price tag but delivers significantly more value is a win. As such, you may not want to immediately reject an aircraft that is above your purchase budget. Often, a low-priced jet will cost more in the end when considering the direct cost and downtime holding costs that may need to be invested in the low-purchase-price aircraft in near-term refurbishment and upgrades in inspections just to be on par with the status of the higher-priced aircraft.
Mistake #5: Developing an emotional attachment to a particular jet
Whether it is your enthusiasm for buying your first jet or a fondness for a particular aircraft that reminds you of others you have owned or traveled in, allowing your emotions to factor into a purchase decision is risky. Jet purchases are often best driven by facts not feelings. Emotions can cause you to overlook consequential issues, from mechanical problems to the aircraft not meeting your needs or expectations. What’s more, if the seller detects your fondness for a jet, that awareness can tilt the negotiations in their favor.
Mistake #6: Failing to consider operating costs
It is not uncommon for someone to leave operating costs out of the aircraft purchase equation, especially when upgrading to a bigger or more capable jet. In their excitement about the upgrade, it is easy to overlook the increased variable costs and maintenance expenses. One of the most crucial jet ownership tips is to consider where the aircraft is in its lifecycle. In particular, how long is it until its next major maintenance event and the associated costs?
Mistake #7: Not assessing the impact of ownership structure
Private jet purchases can have significant sales tax and use tax implications. How you structure the ownership and operation of the aircraft is critical. Too often, purchasers don’t identify the aircraft ownership structure until they are in the late stages of the purchase transaction, and that can hold up a closing. Others only spend the time to research the proper or best ownership structure well after they have made the acquisition. Doing the research with a professional upfront can save you considerable time
Mistake #8: Believing that offering charter services can pay for the jet
Offering your jet for charter can create a revenue stream, but it is critical to avoid thinking that the aircraft will “pay for itself.” Some owners believe that to achieve that goal, they must purchase a relatively inexpensive jet and allow it to be chartered for a large number of hours each month, leaving little time for them to use it. Then there is the risk that you will not be able to hit your charter goals because of factors like your location, the type of aircraft and others. So, it is best to think of charter revenue as a bonus but not necessarily the main driver for making your purchase.
Mistake #9: Not considering how and who will fly and manage the jet
Oftentimes, a first-time buyer will assume a pilot they know can fly the aircraft and take care of all of the aircraft management details. This could be the case, but there is a lot to consider. Is the pilot type rated in the jet you ultimately select to purchase? If not, are you prepared to pay for training them? Are you expecting the aircraft to be chartered? If so, do you need an aircraft management company to oversee the FAR 135 charter certificate onboarding and have the aircraft operating on their charter certificate? A good aircraft broker can help identify options for jet buyers.
Mistake #10: Rushing into a refurbishment or upgrade project
People who purchase pre-owned jets are often eager to enhance them, whether aesthetically, with more modern equipment or both and can rush too hastily into changes to the aircraft. While it is exciting to “make a jet your own,” many owners find it best to fly it for a few months or more before making any decisions about refurbishment or upgrades. That approach provides multiple benefits. Most importantly, it gives you time to get to know the aircraft, including where it meets or exceeds your expectations and what cosmetic changes you want to have performed and by what service provider. A pause before modifying a jet also lets you plan the work with the service center and pre-order parts and perhaps align with a scheduled inspection downtime event and your crucial flight utilization schedule.
Contact Axiom for Expert Assistance With Your Private Jet Purchase
The acquisition of an aircraft can be an intimidating and complicated process if the buyer is not armed with the information necessary to make an informed buying decision. Only after a thorough analysis of your operational requirements and financial considerations can you arrive at the proper choice of aircraft.
Axiom Aviation and our seasoned team of professionals will guide you through this process and represent your best interests at all times. Our decades of experience and complete aviation resources will provide you with sound advice that will enable you to make an informed purchase decision with confidence. So, whenever you are ready, we invite you to contact Axiom Aviation, learn more about our services and put us to work finding your jet.
About Axiom Aviation, Inc.
Axiom Aviation delivers personalized, dedicated service that takes the weight of the aircraft transaction process off clients’ shoulders. From aircraft and market review, and physically evaluating the aircraft, to overseeing inspections and performing formal appraisals, Axiom Aviation serves as a trusted advisor to aircraft owners and aircraft finance companies. Axiom Aviation is a proud Accredited member of the International Aircraft Dealers Association and the National Aircraft Finance Association. For more information, visit AxiomAv.com.
Media Contacts
Andy Toy, President/Managing Partner
Mike Herchick, COO/Managing Partner
216-261-8934
Source: Prodigy.press
Release ID: 1215645
