Are you looking to buy a private jet?

Here is our ‘jet buyers guide’ that will tell you what you need to know and the pitfalls to look out for before buying your own private jet

When buying a new private jet or a used private jet, it is a noteworthy responsibility that ought to be taken with careful consideration. By following the herein mentioned steps will enable you to first assess whether the aircraft you are buying is suitable for your needs.

Before getting into the nitty-gritty of a jet purchase transaction and potential pitfalls, it’s important to have a clear understanding of what you want the jet to do and why you’re purchasing in the first place. Once these are understood and you have narrowed down your search, undertaking a thorough assessment of the aircraft is key to completing a successful transaction.

First, let’s discuss why owning a private jet is a good option

Larger availability of airports so you’re closer to your destination

There are around 500 air terminals in Europe served by business carriers. Yet, there are around 5,000 air terminals and aerodromes that are available by private jet. That implies you’re more likely to be closer to a private air terminal than a commercial airport, which is very important for timekeeping, as there is less travel to your final destination, meaning you can fit more into your day.

 

Greater access to travel destinations

A lot of routes are unavailable to commercial flights so as an example you could fly to three urban areas in a single day and you’ll be back home by dinner!

 

Greater freedom and flexibility

Enjoy personalised departure hours and reduced waiting times. With a private jet, simply arrive five minutes prior to take off! Characterise your own schedule time and make short notice changes to suit. You won’t need to endure basic issues with business flights, including broadened pauses and strikes.

 

KJET offers buyers a step by step checklist to include many considerations when buying an aircraft. Get your checklist by clicking the button below

If you or your organisation has a way to buy such a jet, how would you choose which model to purchase and know you are buying a sound investment? Please look at the list of considerations to help facilitate your decision.

It is very important to understand how you will use your aircraft in terms of:

• long or short range trips
• flying hours
• travel destinations
• availability of airports and routes
• how many passengers you will be flying at any one time

The answers to these considerations will help provide a good starting point for the type of aircraft you should buy.

This should not only extend to the price you’re willing to spend on an aircraft, but also to the wider cost, including the fixed, variable, one-off and maintenance costs you will face (You can read more about ‘How much does a jet cost’ here) as well as pilot and crew wages and ongoing training.

New or Preowned Aircraft?

When considering aircraft purchase you must also take into consideration the cost of repairs and replacement parts, especially on used jets.

New aircraft may be considerably more expensive to purchase but a used aircraft may be more costly in the long run to keep in line with the aviation regulations and for the upkeep of replacement parts. For instance, by the end of 2019, the Federal Aviation Administration requires that all corporate jets be equipped with the ADS-B (Automatic Dependent Surveillance), an expensive surveillance technology which allows the aircraft to be tracked, so the costs to comply may be the final decider to as to whether you buy new or used.

However, you may also find this will push up the supply of used jet and therefore may be able to negotiate a better price!

In regards to new aircraft, they come with a manufacturer’s warranty that usually covers for any repairs and failings, although you would want to double check what is actually covered in the policy and for how long.

It pays to put some exertion into finding the correct wellspring of financing. Loan costs on aircraft can differ broadly so make sure you compare interest rates from different finance companies. It is worth noting that many finance companies will not finance older models.

It may also be worth getting pre-approval on finance to give you greater flexibility and increased negotiating power when you do find a suitable jet.

This may be the most well-known effect on the value when you come to resell your jet. You will want to familiarise yourself with the Aircrafts ‘Time between Overhauls’ (TBO). This is the number of running hours or calendar time that a manufacturer recommends before the aircraft’s engine requires an overhaul (And there are varying degrees of overhaul ‘Top Overhaul’ and ‘Major Overhaul’)

Top Overhaul

A Top Overhaul is a repair of parts outside of the crankcase which does not involve taking the whole engine apart.

Major Overhaul

This procedure involves completely disassembling the engine. The work carried out involves inspecting the engine, repairing where necessary, reassembling and carrying out tests. As an owner, you should be aware of any replaced parts.

It is to be noted that all manufacturers do not recommend a top overhaul but a complete one.

As a rule, consistent use of an aircraft, together with routine maintenance checks can keep an engine in relatively good shape and well lubricated, over and above an aircraft that is infrequently flown; these engines tend to age or deteriorate more rapidly and therefore could cost you dearly.

There are many considerations to help make sure you don’t regret buying your aircraft. Therefore we have put together a ‘Buyers Guide Checklist’ so you can ask the right questions to make an informed decision. Please click the button below.

These are issued by the FAA for reasons of safety and are an unavoidable truth for practically all aircraft. Once issued, proprietors are required to agree to the AD inside the time span distributed.

When buying an aircraft you will want to check the history of the AD and see if there are one time issues or recurring problems associated with that aircraft. You can check for AD’s on the FAA website at https://www.faa.gov/regulations_policies/airworthiness_directives/ or have KJET provide you with an Aircraft Search Package which will include a full rundown and complete history. Contact us for more information.

Any amends to the aircraft can reduce the value of it, so you may want to get a damage history report to assess the nature of any damages and to make sure repairs have been corrected in line with the FAA recommended practices and regulations.

As part of your inspection, it will be worthwhile evaluating the spare parts market to make sure parts are obtainable, so not to waste time, or money or run the risk of having a grounded aircraft.

Utilised once in a while to give an aircraft a ‘freshen’ up, however, you will want to check the job cautiously to make sure the paintwork is not covering up something more sinister like erosion.

It is also wise to make sure you check for legitimate fittings to ensure any upgrades have been done with proper care and attention.

It is a smart idea, if you can, to take the jet for a flight before you settle on your official choice.

Make sure you have an accomplished pilot and mechanic who can help you check all systems and equipment and who can spot any untoward sounds and malfunctions. Amid the flight, cautiously check all gear and frameworks to decide whether they are completely working.

When you have distinguished a jet that meets your criteria, it must be outwardly assessed and records investigated. As a major aspect of the pre-purchase procedure, the state of the aircraft and the mechanical inspection is surveyed inside and out, taking a look at the interior and exterior condition whilst checking the history of the records.

The pre-purchase will inspect all components that are regularly replaced and that all overhauls have taken place. All parts of aircraft will be inspected for damaged or worn parts and that interior fittings have been properly fitted.

 

Ownership Titles

An Aircraft Title Search should be performed to prevent you from purchasing an aircraft where there is a lien against it. The last place you want to find yourself is buying an aircraft you can’t keep.

Letter of Intent (LOI)

As soon as you’ve decided to buy, get your lawyer to build up the letter of intent (LOI). This ought to give expansive frameworks of the terms of the exchange and bring about a mutual understanding of the terms of the transaction. The one – two-page document should include;

• The details of both parties, buyer and seller
• Aircraft information
• Price
• Deposit and Escrow details
• Pre-purchase inspection requirements
• Delivery arrangements
• Any provisions, i.e termination of purchase agreement if not executed by a certain deadline

KJET offers buyers a step by step checklist to include many considerations when buying an aircraft. Get your checklist by clicking the button below

Just as important as making sure your aircraft is a sound investment, is also the legal considerations.

 

Seek legal counsel with an experienced consultant/lawyer who is familiar with aviation, tax law and insurance; someone who will look at:

• Tax planning to minimise tax liabilities
• The transaction structure
• Aviation regulatory issues to comply with applicable aviation authorities
• Insurance and the minimum cover you will need for the age, model and value of your aircraft
• Purchase agreement/Sales Contract that will include any terms and conditions of the transaction in writing to protect the buyer and seller
• Due Diligence records to make sure all aircrafts logs, records, service history, maintenance records, equipment lists, engine log books etc are all countered for and complete.
• Registration. In some instances, it is a requirement to register the aircraft and pay a fee based on the age, value, weight, type.
• Bill Of Sale. Documents filed with the aviation authorities on the closing date, receipt of delivery, leases, operating agreements, loans, escrow agreements and so on

There are many duties and operations that need to be performed to adhere to stringent aviation regulations. As such you will want to make sure your aircraft is managed by a professional and experienced aircraft management company to deal with and oversea:

• Technical maintenance and checks
• Crew administration
• Safety compliance
• Administration and accounting
• Training
• Coordination and scheduling of flights

KJET Ltd is an excellent choice for you and your jet. With a mountain of knowledge, experience and customer excellence we will provide you with a complete aircraft management solution.

Servicing clients throughout the UK and overseas we will aim to provide a first-class management service wherever you are located, be that in the UK or another part of the World.

For more information please book a consultation and we will call you back at a time to suit.