Written by Chad Anderson, Jetcraft President
Year-end is a good time to sell your aircraft and remove it from your books for the new year as a corporate (or personal) asset. Once you’ve decided that you are ready to sell, there are several key pieces of advice to keep in mind in order to sell your aircraft for the best price possible. This will help you prepare your aircraft for sale on terms that you will be comfortable with.
1. Work with an Experienced Partner
According to the National Aircraft Resale Association, 14 percent of airplane owners don’t enlist the services of an expert with transactional aircraft experience to handle their sales. While some in that group are corporate flight departments or others with the requisite knowledge, a considerable number are less experienced people who may be outside of their comfort zone.
It is inadvisable to take on the unnecessary risk of trying to sell your aircraft without the full knowledge of its worth and a thorough understanding of how it fits into the marketplace. For example, how is interest in your class or manufacturer of aircraft trending? Are there buyers in other regions of the world who would pay a higher premium for your aircraft on the market? Having answers to these types of questions can dramatically improve your chances of obtaining the best possible sales price for your aircraft.
>>See “So You Want to Buy an Aircraft…” for a complete overview of the aircraft sales process<<
An advisor with aviation transaction experience will enable you to not only determine the right target sales price to set for your aircraft, but also guide you on the best way to implement some of the additional tips in this article, in order to best prepare your aircraft for the market.
2. Consider a Trade-In
If you’ve outgrown your aircraft, the end of the year can be the ideal time for a trade-in, both freeing up capital quickly and enabling you to fly in an upgraded aircraft sooner. A trade-in can be accomplished in as little as 30 days, facilitating an upgrade to a larger or longer-range model, while maximizing value for your existing aircraft at the same time.
>>See “Achieve a New Year’s Resolution Early: Upgrade Your Aircraft via a Trade-in” for more on how a trade-in can be the best solution for you.<<
3. Be Judicious with any Upgrades
It is not uncommon for sellers to assume that they should rush out to upgrade their aircraft with the latest and greatest technologies and add-ons in order to make it more appealing to potential sellers. This strategy can backfire, however, with sellers often disappointed that they are unable to recoup the costs of new additions to their cockpit or cabin.
On one hand, it’s true that the addition of new-generation avionics, in-flight entertainment or interiors can make an older aircraft more appealing. But such enhancements can often take longer than anticipated (six to twelve months for an interior completion or upgrade is not unheard of) with costs (not to mention overruns) eating into desired savings. In many cases, upgrades should be thought of as long-term investments into aircraft that you will keep for years, in order to amortize costs.
Consider upgrades cautiously and on a case-by-case basis, with insight from an experienced aviation consultant who possesses a sense for current market trends around the world. They are better positioned to advise you on conservative upgrades that may make sense for the bottom-line.
4. Have a Timeframe in Mind
We advise clients who are putting their aircraft on the market to have a sense for when they optimally want the aircraft to sell. While selling in a rush and taking any offer that comes along is an unwise strategy, holding on to an aircraft too long for an unrealistic price that the market is unable to bear can also cost you in the long run.
There is no magic formula to determine the right sales price. But, here again, by working with the right partner, you are maximizing your market knowledge and exposure. It is necessary to factor in your aircraft’s devaluation over the years and its net present value vis-à-vis the overall market. The value of the price you may receive today could be substantially higher than the value of the price you may receive in six months or a year. So time may be of the essence. You may also need to be mindful of your overall cost of aircraft ownership (hangarage, crew, insurance, etc.), when considering the urgency of your sales approach. Those maintenance costs only escalate as you hold out for a higher sales price.
5. Know the Status of your Aircraft Maintenance Program
It is important that you have completely up-to-date statuses for the maintenance of different components of your aircraft, chiefly the engine, airframe and auxiliary power unit (APU). You need to know the ins and outs of your maintenance programs and coverage, as well as any exceptions in the event of aircraft sale. Can warranty or maintenance programs be transferred to another party upon sale, irrespective of geography? These programs can have a big impact on the overall resale price.
Pre-owned aircraft are normally purchased in an “As-Is, Where Is” condition, meaning the buyer’s purchase is predicated on no physical modifications being made to the aircraft. The buyer will create a set of conditions for the aircraft and the seller to comply with in order for the buyer to accept the aircraft. Typically these include no damage history, a complete and current set of log books, and the stipulation that the aircraft will be delivered in “airworthy condition.”
Obviously, having your aircraft in the best condition possible before putting it on the market will optimize your chances for success. An experienced aircraft ownership strategist like Jetcraft can assist you with not only ascertaining the true value of your asset, but also with all the steps needed to ready your aircraft for sale at a good price.
Our network of global agents gives us insight into prevailing marketplace trends around the world – putting you in a stronger position throughout the sales process. This also enables us to better advise you about how to set the price for, and how to market, your aircraft, with a subsequent and increased likelihood of the best possible result for you.