Every year as the summer draws to an end I do my best to prepare for the crush of 4th quarter closings. I expect 2024 to be a particularly interesting 4th quarter. First, in a presidential election year, transaction volume slows immediately prior to the election due to the uncertainty of the outcome. However, historical data shows that the transactions are only delayed, and the actual volume is not impacted over the course of the 4th quarter. Another interesting issue is that a larger number of older aircraft are continuing to fly while a larger number of newer aircraft are also being added to the private aircraft fleet. The increase in the number of units available for buying and selling will also increase the total number of units that are transacted. Additionally, as certain popular models continue to age, more systems, components and equipment on those aircraft are becoming obsolete. As a result, having a fully operational aircraft ready for sale is increasingly difficult and time consuming, especially as we continue to have supply chain issues with aircraft parts. Finally, finding available inspection slots is always difficult in 4th quarter. It may be more difficult than expected this year due to a compression of transactions after the presidential election and also due to the fact that some inspection facilities are limiting or eliminating pre-purchase inspection slots for older aircraft.
As we prepare for the remaining sales which will take place in 2024, certain items in the sales process can be completed in advance, resulting in a less condensed and more seamless sale. Some of these items should be done annually, regardless of if the aircraft is going to be sold, and are not a waste of money even if the aircraft is not sold.
1. Loose equipment and spare parts can be a part of the aircraft sale, sold separately, or retained. Since the Seller can decide what is being sold with the aircraft, a loose equipment list can be created in advance of the sale and anything that is not included can be priced and listed for sale separately or retained for future use.
2. When listing an aircraft for sale, an aircraft specification will need to be developed for advertising. Creating the aircraft specification and the photos of the aircraft can be done in advance of when the aircraft is listed for sale. Later, if it is decided that the aircraft will not be sold, most of these items can be reused whenever the sale happens.
3. The flight department or management company can review and organize the aircraft records to confirm they are complete and continuous.
4. A title search can be performed by an aircraft escrow agent. Upon receipt of the title search, the Seller can address any title issues in advance and thus avoid any closing delays.
5. If the aircraft has a registration number on it that the Seller would like to keep, a request to change the tail number can be filed before the aircraft is listed for sale. Depending on how long it takes to sell the aircraft, it is possible that the FAA will issue the 8050-64 prior to the sale, which would allow for a change in tail number prior to closing. Changing the tail number before the sale will allow the Seller to retain control over the preferred registration number and have the tail number available sooner for future use.
6. The Seller can schedule a pre-purchase inspection for the aircraft and oversee the inspection, then sell the aircraft with the inspection already completed. This allows the Seller to control the timing and the scope of the inspection. However, it does mean the Seller pays for the inspection instead of the purchaser. Though this may be a reasonable trade off to maintain control of the process.
7. Building the sales team in advance is also very helpful. The Seller can interview and decide who will broker the aircraft, oversee the inspection and handle the legal work for the transaction. When it is time to list and sell the aircraft, the team will already be in place and ready to move immediately.