The Process of Selling a Business Aircraft
Understanding the Aircraft Sales Process
The process of selling an aircraft – particularly a large and expensive business jet – can often be complex, challenging and very time-consuming, thus it is always wise to enlist the help of experts such as accredited aircraft brokers, aviation attorneys, pre-buy specialists and other related professionals and organizations (e.g. Aircraft Title companies). In addition to properly performing all the requisite sales steps such as cleaning the aircraft, taking nice photos/videos and developing a detailed aircraft specification sheet, it is imperative that the aircraft is in best shape (and spotless!) and that all inspections are up to date, that all related records (such as logbooks) are impeccable and that the aircraft is in the best possible condition. With the growth in digital logbooks that can be shared via cloud-based apps, interested buyers can now view the records straight from their home or office.
Even the slightest imperfection or inconsistently in record keeping, could lead to a buyer questioning the airworthiness of the aircraft; the net result being that the buyer ends up choosing an alternative aircraft listing. And given the high price tags that are involved, even a couple percentage points in the sale price can have a huge financial impact. Similar to selling a house, having a pre-buy done by a factory-accredited (read: independent and neutral) maintenance facility prior to listing the aircraft can make a huge difference in selling the plane while avoiding any post-sale pitfalls. In rare instances, “buyer’s remorse” can also lead to costly litigation between the buyer and seller.
Why Should a Seller Use an Aircraft Broker?
Even with modern tools (such as virtual auctions) and advance digital selling tools, the process of selling aircraft is highly complex and it can end up taking longer than expected, even greater than a year in some instance. Thus, it is always wise to enlist the help of an accredited aircraft broker. (Many sellers often regret the decision to pay a sales commission until it’s too late in the sales process. What is the old saying about “pennywise and pound foolish?) There are numerous quality aircraft brokerage companies to choose from. Of course, just like you would do when choosing any sales professional, ask for referrals, read online reviews and ask many detailed questions before choosing a broker to sell one of your most valued assets.
Completing the Aircraft Sales Process
Once the official pre-buy inspection is completed, any related discrepancies must be corrected/fixed by the seller or their designee (at their expense) or, alternatively, such items must be adjusted via the final sales price. Only then can the purchase agreement be completed along with all the other related sales documents. (There are too many to mention although one important one is FAA Form 8050-2, available on the FAA official website, which needs to be completed by the buyer.) In addition to using a seasoned aircraft broker, it is highly recommended to perform a detailed aircraft search (again, by an accredited company) along with an escrow service to ensure that the money transfer process is safe, efficient and timely. (The similarities between successfully selling an aircraft and a residence should not be obvious.) Once the weight of all the final paperwork exceeds the gross weight of the aircraft – OK so maybe we are exaggerating a tiny bit! – a seller then needs to hand over all of the other documents related the aircraft, such as the detailed paper/digital logbooks, the aircraft registration certificate and any other important (and critical documents) such as the AFM, maintenance manuals, weight and balance, etc. The buyer will also be required to complete FAA Form 8050-1 which will be placed in the aircraft, along with the related bill of sale, to serve as the new owner’s official registration certificate. It is important for the buyer to ensure that they are very diligent during every step of the process to ensure no stone is left unturned to help avoid any issues – large and small – post-sale.