If you are looking to sell your aircraft in the near future taking some time to consider and plan for the process can help you to avoid costly mistakes. While price always looms large in conversations about selling aircraft, this is not the only factor to consider.
Gather the Team In Advance of your Aircraft Sale
Sellers of aircraft should consult their business, technical, legal, and tax advisors in advance of the sale. While it may seem that a small team can handle a sale, or that it should be more straightforward than a purchase, there are considerations and choices to be made in each of these categories that can drive decision making for the transaction.
Consider the Status of the Aircraft Prior to Your Aircraft Sale
Where is the aircraft with respect to scheduled maintenance? Are there major inspections, or other scheduled maintenance coming due soon? Aircraft that have recently completed major scheduled maintenance may be more attractive to potential buyers, but finding a slot at a qualified maintenance facility to complete scheduled maintenance can sometimes be challenging, especially towards the end of the calendar year. Even if the aircraft is current on maintenance, time spent on confirming that the records are organized, complete, and up-to-date can help to speed up the inspection process.
Outline Goals Before Selling your Aircraft
Selling the aircraft at the highest price might be the main goal, however there are often other factors that at least play a part in the structure of the transaction. Timing is often one of the key factors. Some sellers may want to get rid of the aircraft as soon as possible, but for others there may be issues that require additional planning, such as the need to find a replacement aircraft in close succession, the plan for addressing depreciation recapture, and the current state of the market. There may also be other factors that impact the deal, including the amount of notice required to a lender or management company prior to the sale, seller’s need to use the aircraft prior to closing, and seller’s desire to retain the current n-number for use on a future aircraft. Understanding all of your goals and ensuring that your advisors who are negotiating the deal understand them as well will make it much more likely that you will be able to achieve them.
Lori N. McGee is a partner with the law firm of Jetstream Aviation Law and counsels clients on the acquisition, financing and operation of corporate jets operated under Part 91 and Part 135 of the Federal Aviation Regulations. Jetstream Aviation Law can be found at www.JetstreamLaw.com.
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.