10 Steps to a Successful Airplane Purchase

So, you’ve decided to buy a factory-new airplane. Congratulations. Now the decision-making begins. Purchasing a new airplane can be even more complicated than designing and building a luxury home. But don’t be deterred. Following these 10 simple steps will help you maximize the productivity and enjoyment you get from your new “time machine” and avoid a contrail of tears in the future. 

1. Build your acquisition team.

Unless you’re well-versed in all realms of aviation tax and liability law, finance, insurance, brokerage, maintenance, and operations, you need a specialized team of experts to guide you through the purchase process and make key decisions, such as how to structure aircraft ownership. This expertise differs from what you may have required for your non-aviation businesses or assets. Go with the pros. You’ll save money in the long run. 

2. Determine your mission—now and for the future.

What are your current travel needs in terms of distance, frequency, passengers, and luggage load? And what are those needs likely to be in two, five, or even 10 years? Buy too little airplane and it won’t get the job done; buy too much and you’ll be saddled with higher costs than necessary. If you fly to Europe or Asia only a few times a year, are those trips really worth the price of a 6,000-nautical-mile-range jet, or can you tolerate a refueling stop en route? 

3. Decide how to operate. 

Do you want to take on the daunting task of managing the aircraft yourself or assigning it to your CFO, or do you want to delegate that to your pilots or a management company? This is not a job for someone who lacks the relevant experience. And depending on how much you fly, saddling your pilots with these tasks may not work out, either. A management company, on the other hand, can handle all the details, including crewing, flight and maintenance scheduling, IRS and FAA compliance, and helping you to determine whether it would make sense to charter out your aircraft to offset some of your costs. A management company also brings with it the ability and the duty to provide professional flight standards to your operation. 

4. Select your aircraft.

As the saying goes, “Don’t marry for looks.” An airplane that can’t fly is a very expensive lawn ornament. Reliability and product support are the keys to the kingdom and enjoying your airplane. The annual product support survey in our sister publication, Aviation International News, is a comprehensive guide to who’s been naughty and nice when it comes to standing behind their aircraft and the availability and pricing of parts. Performance, technology, and cabin comfort also are key considerations. You want to get to where you’re going before next Tuesday, you need to access the internet and keep in touch in the airplane to stay productive, and you don’t want to have to trundle off to the chiropractor after every flight. Is saving $1 million really worth the price of having to eat your knees in an airplane cabin that is too small? 

5. Spec your aircraft.

This is the fun part. You can visit the manufacturer’s design studio and be confronted by a dizzying array of choices regarding colors, fabrics, veneers, cabin layouts, and other options. Most airframers do a really good job of pre-engineering these items to make your aircraft completion go smoothly and with a minimum of extra cost. But if you absolutely must have that stingray hide wall covering or that exotic wood veneer, be warned that the engineering, burn testing, and certification of those items will create delivery delays and extra expense. Ditto for non-standard cabin configurations. And an odd configuration may adversely impact resale value. Using accent colors and company logos is a relatively inexpensive way to “personalize” your aircraft without creating undue expense and delay. 

6. Choose your maintenance plan.

As the old Fram oil filter commercial used to warn: “You can pay me now or pay me later.” If you’re financing or leasing your aircraft, the lender will require a maintenance plan to maintain the value of the asset. And that typically means paying a set fee for every hour the engines are turning. Comprehensive plans can cover nearly everything on the aircraft: engine, avionics, airframe, cabin, and sometimes even items like tires and brakes (the so-called “nose-to-tail” plans). You can subscribe to plans for the whole aircraft or for particular components. They are available from the company that made the aircraft or the components and from third parties such as JSSI. No, they’re not cheap, but they protect your airplane’s value and guard against unplanned and expensive maintenance “events.” Plans buy both you and your financial institution peace of mind. And they go a long way toward helping you understand and appreciate the true cost of aircraft ownership. 

7. Pick a base.

Not all airports are created equal. Ideally, you want to find one near where you live or work that has all the amenities you need, including reasonable fuel prices and availability, maintenance, hangar space, landing systems for your class of aircraft, and onsite U.S. Customs service if you do a lot of international flying. Sufficient runway length and thickness are a must, of course; if the closest airport to you falls short in this regard, you may choose to base your aircraft elsewhere and have it flown in as needed. 

8. Lease, rent, or build a hangar.

Your bird needs a nest. A management company or airport FBO may try to talk you into sharing space in a community hangar. Sometimes, at crowded airports, or when conducting transient operations, this is unavoidable. And yes, sharing a hangar can be more cost-effective. But the concomitant risk of “hangar rash” is present. To get the airplane out behind or beside you, some earnest young person making minimum wage is going to hook your multimillion-dollar investment to a tug and pull it around. And the first hint that the youngster got poor grades in geometry could be when your airplane’s wing collides with that of another aircraft. This is how airplanes get bent without even leaving the ground. Even when yours is retrieved uneventfully, extracting it from a shared hangar can create delays. Your own airplane in your own hangar maximizes privacy, security, and convenience. And hangars cost a small fraction of what you paid for the airplane.

9. Train the crew.

Aircraft manufacturers almost always provide pilot and maintenance technician training as part of the purchase price, and your crew or those hired by your management company can typically use these “training slots.” A third-party provider such as FlightSafety International or CAE typically does the pilot training. You want the crew fully trained before you take delivery of the aircraft, but not long before. Flying skills, like anything else that requires memory, are perishable.

10. Take delivery.

This process can take anywhere from a few hours to a few days. Your aircraft is rolled into an acceptance hangar, where your designated maintenance technician and pilots inspect it for “squawks”—cosmetic items or things that malfunction or are at variance with the specification. The manufacturer typically corrects any such variances before it finalizes the delivery. You will be provided with a customer service agent to shepherd you through the process and a “customer suite” in which to camp out, enjoy some high-end catering, and do business while you wait. Of course, you’ll have to deal with an avalanche of paperwork to complete the purchase. But beyond these remedial tasks, the delivery provides you and your team with an opportunity to ask questions about the aircraft and product support, and for you to learn, and have the opportunity to play with, all the airplane’s new-fangled cabin technology. When the due diligence is done, you’ll have your picture taken in front of the airplane, and off you’ll go—with a big smile on your face. 

 

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COVID Considerations 

The pandemic has at least partially changed the way people order factory-new aircraft, says Stephen Friedrich, chief commercial officer at Embraer Executive Jets in Melbourne, Florida. While the company still encourages customers to visit its design studio, a COVID-19 protocol is in place and some aspects of the ordering process can be handled virtually. The precautions taken by Embraer are in line with those of other manufacturers. 

Customers—and anyone else—coming to the sprawling company campus must complete a health questionnaire concerning their possible exposure to the virus, have their temperature taken on arrival, social distance, and wear a mask. Moreover, they can no longer access certain parts of the facility, including the production plant. The campus, which employs 850 people, gets a hospital-grade disinfection nightly, and high-traffic areas are treated two to three times a day. “We are doing what we need to do to ensure the safety of our workforce and our customers,” Friedrich says. That includes contact tracing when anyone who works at or visits the campus tests positive.

Though you can’t see new aircraft being assembled in person, you can tour Embraer’s production facility digitally. Ahead of visits or “speccing” a new aircraft, customers receive a sample box with interior materials and can do a good deal of the process virtually. The virtual option has always been available for buyers who don’t wish to travel to Melbourne, Friedrich says, but the pandemic prompted Embraer to “amp it up a little more with a few things.” 

The “amping” includes greater use of webinars and videos to engage customers. “Normally, we would have been out at shows and on demo tours. We’re doing much more on a virtual basis now and that has been very helpful,” Friedrich says, noting that customer engagement has actually increased during the pandemic.

While the pandemic has changed the way Embraer does things, “we have the same number of deliveries in the facility and in terms of people wanting to come in to visit, it hasn’t dropped off that much,” says Friedrich.

How COVID-19 is impacting aircraft interior choices is just now beginning to reveal itself, says Jay Beever, Embraer Executive Jets’ vice president for interior design. “New customers are asking what can be done with regard to air filtration and surface coatings,” he notes. 

Embraer uses the Microshield360 anti-microbial coating on its aircraft, and HEPA filters are now available on the midsize and super-midsize line of its Praetor series business jets. Beever thinks that the pandemic is likely to accelerate the trend to interiors that eschew leathers and other organic materials in favor of upscale synthetics that are more COVID-resistant and easier to clean.

Beever notes that Embraer’s new generation of hidden and passive-touch glass-panel cabin controls also make aircraft interiors easier to clean in the COVID era. “They can quickly wipe down a surface where most hands are touching things. With [old-style] switches, you can’t really clean around every crack where the switches are mounted or the base where the switch is mounted. So debris and stuff can get stuck in those cracks. By having flat panels with clean glass surfaces we have a very safe, clean airplane.”

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Using a Broker for Factory-New Purchases

Most first-time aircraft buyers equate using a broker only with the purchase of a preowned model, but long-time business jet salesman Jay Mesinger points out that that could be a mistake. 

Buying a new airplane direct from the factory or one of its dealers means you won’t be getting unbiased advice, says Mesinger, who is president and CEO of Boulder, Colorado–based Mesinger Jet Sales. You’ll be dealing with someone who will focus only on the positive attributes of the manufacturer’s products and will be unlikely to objectively compare them against competitive aircraft or thoroughly evaluate them for the appropriateness of your mission. 

Airplane manufacturers “make good products and stand behind them,” Mesinger says, “but they don’t work for the customer. They work for themselves. That doesn’t mean manufacturers are going to take advantage of you, but they are going to try to sell you their product as opposed to helping you analyze their product against the next one.”

Like other aircraft brokerages, Mesinger’s firm works with clients to objectively analyze the strengths and weaknesses of competing models and “bring market sense” to the process. The latter requires someone who has “the expertise to sit at the table with the manufacturer, understands the process of the manufacturer, and knows how to come out of that with a successful transaction,” Mesinger says. 

For factory-new purchases, he works with clients to build an annual use analysis and operating budget for several aircraft and then accompanies clients on visits to airframers. Using a broker in this situation allows clients to “ask the right questions” and “listen intently,” Mesinger says. “It’s important that the first-time buyer doesn’t sip the Kool-Aid and is able to objectively analyze the data and come up with the right answers.” 

Assembling an expert acquisition team is key. Often, a first-time buyer builds a team that includes the family or corporate attorney, accountant, and banker, but Mesinger stresses the importance of using professionals with aviation expertise—contacts a broker brings to the table. 

Brokers also know how to find an appropriate aircraft management company as well as an inspector who has expertise in the makes and models you’re considering. As for finance, Mesinger counsels, “High-net-worth individuals clearly have lending relationships, but they may not be the best ones for aviation. These lenders may not provide the right products or the appropriate or most advantageous terms. There are parallel paths [operations, tax, and finance] you need to go down and understand even before you order the airplane. And the manufacturer is not going to help you with that.”

Without the assistance of an expert team, a first-time buyer is often at a loss about how and what to inspect on an aircraft at delivery and what to say “no” to from the inspection report. “On a new aircraft, you run into something as basic as how to spec it out and what that cabin configuration will do to resale value,” Mesinger says, citing variables such as whether to include a crew rest area or conference grouping and galley location (forward or aft). “Some buyers don’t care what their preferred configuration does to resale value, but that’s a decision that we are able to make.

“The other big mistake can be buying at all, because the expectations of how, when, and where you can use the airplane, and how much that will cost, is not something manufacturers will sort out for you. I am just as likely to talk someone out of buying as into buying because I’ve listened to their expectations and what they want and can tell them, ‘This is just not going to work.’ And I do that, too, because I am working for them,” says Mesinger, who receives a fee regardless of whether the client makes a purchase.