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The Duncan Download Blog: Business Aviation Advice & Observations

Diane Heiserman

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A Little Perspective on the Business Aircraft Purchase Agreement

Posted by Diane Heiserman on Tue, Feb 14, 2017 @ 09:00 AM

Contributed by Doug Kvassay, Aircraft Sales Representative

An aircraft purchase agreement provides the roadmap, defining processes and deadlines, through to the point of closing.

An aircraft purchase agreement provides the roadmap, defining processes and deadlines, through to the point of closing.

A couple of years ago, one of the larger banks in the business aviation industry called asking for my immediate assistance in locating the purchase agreement for an aircraft that we bought for a client a few years prior. The bank was undergoing an audit and had no record of it. Although I located the file on the transaction, it did not contain a purchase agreement. This transaction was for the acquisition of an aircraft that, at the time, was worth close to $20 million for a well-known individual. It didn't take long to remember the details of the events surrounding the deal.

There Was No Aircraft Purchase Agreement

The aviation attorney for our client negotiated with the bank (the aircraft owner) until the bank called and said they had had enough. We were told we had to close on the acquisition the following day or lose the aircraft. We wired funds, received an FAA Bill of Sale (BOS) from the bank and took delivery of the aircraft.

When I started in this business the process to buy a business aircraft was simple. You flew out to look at it, reviewed the records, did a quick test flight around the patch, handed the owner a cashier’s check, received a FAA BOS in return and flew home with the aircraft, all in the same day. No purchase agreements. No pre-purchase inspections. No escrows. Today, it is not uncommon to have two outside aviation attorneys spend the better part of two or more weeks negotiating a purchase agreement, usually at considerable expense to their clients.

Purpose of Aircraft Purchase Agreements

An aircraft purchase agreement provides the road map, defining processes and deadlines, through to the point of closing. However, in almost all cases, the purchase agreement is filed away once executed and never referred to again during the transaction. Even if a point of contention arises prior to closing, the buyer and seller usually work it out together without legal action, as the cost of litigating a dispute is never an economical option.

What many fail to realize is that an aircraft purchase agreement governs and spells out what both the buyer and seller are responsible for prior to closing. Typically, the only contractual promise in the purchase agreement that survives closing is the warranty of title, which is included on the standard one page FAA BOS. In the scenario above, since time was of the essence, we verbally agreed to move along with the deposit and pre-purchase inspection and were finished before we had a contract, at which point it didn't really matter. All we were receiving was warranty of title. And if you ever bought an aircraft from a bank, you know that warranty is limited to anything they specifically had to do with the aircraft.

Necessary Legal Advice

If you have special tax requirements or require setting up of an entity to hold the aircraft, legal advice from an aviation tax attorney can be indispensable. However, for a business aircraft transaction, where a straightforward purchase and sales agreement is sufficient, a competent broker working with your in-house or regular corporate attorney is a much more economical alternative to hiring a specialized aviation attorney.

Know the Details Before You Sign

Whether you are buying or selling a business aircraft, the Aircraft Purchase Agreement is a very important document to the transaction. Because it incorporates all terms and conditions of the sale, it is vital that you take the time know all the details of the contract before you sign.

Buying and selling an aircraft can be a stressful experience. You can lessen the stress by having a thorough understanding of the Aircraft Purchase Agreement.

Duncan Aviation’s Aircraft Sales & Acquisitions has been assisting operators buy and sell aircraft since 1991. Backed by in-house legal counsel, flight operations staff and over 2,000 airframe, engine and avionics technical representatives located around the world, gives Duncan Aviation first-hand access to, and knowledge of, the aircraft marketplace unmatched by any other broker or acquisition organization.

Visit www.DuncanAviation.aero/aircraftsales/listings.php for the latest aircraft for sale.

Doug Kvassay is a part of a team of four Aircraft Sales Representatives. He specializes in advanced aircraft aftermarket analysis and managing complex transactions. His aviation career began in 1980.

Tags: Aircraft Sales

Be Aware of Naked Brokerage Transactions with Business Aircraft

Posted by Diane Heiserman on Tue, Feb 07, 2017 @ 09:00 AM

Contributed by Doug Kvassay, Aircraft Sales Representative

Naked Broker

The primary focus of a Naked Broker is to maximize their personal income, not minimize the cost or risk to the buyer.

I first heard the term "Naked Brokerage" from a colleague who used it to describe an aircraft brokerage deal where the broker did not have a written agreement with either the buyer or seller of a business aircraft. Because, the broker has no protection or guarantee of payment from either side, they essentially are "naked."

Increased Aircraft Sale Price

In a Naked Brokerage situation, a business aircraft buyer is typically talking to many brokers offering different aircraft, some of which are represented by a second broker, who has the actual agreement to represent the seller. During the course of the transaction, the broker will contract with the seller of the business aircraft while at the same time write a duplicate contract between themselves and the buyer, increasing only the sales price. Surprisingly, many aircraft transactions are done this way due to ignorance or indifference on behalf of the aircraft buyer.

No Incentive to Represent Buyer Interests

Brokers in a Naked Brokerage transaction are not guaranteed to receive payment for their efforts. During every transaction they look out for their own interests and seek to maximize their profit; oftentimes collecting fees many times greater than paid under an acquisition agreement. In the Naked Brokerage arrangement, the interests of the broker in the middle are not aligned with the interests of the buyer. Their primary focus is to maximize their income, not minimize the cost or risk to the buyer.

Seek Out Predetermined Brokerage Fees

More and more aviation attorneys are refusing to consult on purchases set up as a Naked Brokerage transaction. They want to receive the warranty of title and any other representations, directly from the actual owner, not from a broker in the middle of the transaction.

Most business aviation brokers offer an acquisition service, where the fee is predetermined and the acquisition agreement clearly states that the broker is solely looking out for the interest of the buyer. This benefits both the buyer and the broker. The broker will receive the predetermined fee and the buyer will get 100% of the broker’s effort in the acquisition transaction.

The Bottom Line

Always take a second look at the Letter of Intent and make sure you understand exactly who you are buying the aircraft from.

Duncan Aviation offers business aircraft acquisition services where the fee is predetermined and the agreement clearly states we are working for the buyer. Our interests are to secure the aircraft that best fits their needs at a greatest value. View the latest aircraft for sale by Duncan Aviation’s Aircraft Sales & Acquisition.  

Doug Kvassay is a part of a team of four Aircraft Sales Representatives. He specializes in advanced aircraft aftermarket analysis and managing complex transactions. His aviation career began in 1980.

Tags: Aircraft Sales

Robert Duncan Reflects On 60 Years of Success & Innovation

Posted by Diane Heiserman on Thu, Jan 05, 2017 @ 12:10 PM


DonaldD_phone_SM.gifThe bedrock at the foundation of Duncan Aviation’s success was formed by the values of its founder, Donald Duncan. “…taking care of the customers, taking care of each other, telling the truth". So many talk about it, so few are able to consistently maintain it.

Values & Innovation

Duncan Aviation’s Core Values were established in 1996. They are proudly displayed at all of our locations and reviewed at every new employee orientation. Since they were first identified and written down, Duncan Aviation has more than tripled in size. However, the core values still match the company’s culture. They ring true to all team members and remind us daily about what is important.

Near the top of the list of Core Values is ‘lead through action and innovation’. These are not just words on a poster to be read and forgotten, it is a belief taken very seriously. Duncan Aviation team members have always been given the latitude to explore ways that can improve the customer experience without compromising integrity or safety. It is this eye towards innovation that has been vital to our providing improved services and, ultimately, more value to our customers.

Watch this video of Robert and Todd Duncan reflecting on 60 year of success and innovation at Duncan Aviation. 

 

 

As we look back on our 60th year in business aviation, we are reminded that it is our Core Values and innovative spirit that is the foundation of the culture and the cornerstone of Duncan Aviation’s continued success.

Thank you for helping us celebrate 60 years. We are proud of our family ownership and history of excellence, innovation and responsiveness. We are also truly grateful to have had the opportunity to work with you.

Here’s to 60 more!

Tags: Announcements, 60th Anniversary

Duncan Aviation’s Chuck Zahnow Receives the 2016 AMT Next Gen Award

Posted by Diane Heiserman on Wed, Dec 28, 2016 @ 10:53 AM

Duncan Aviation team members are among the most experienced in the business aviation industry and the quality of the service they provide is among the best in the world. So it comes as no surprise to us when others recognized and acknowledge what we already know. 

Congratulations Chuck on an award well-deserved. 

Republished with permission from AMT Magazine

Zahnow, Charles_SM.jpg39-year-old Chuck Zahnow is an Airframe Technical Representative for Duncan Aviation in Battle Creek, MI. His great uncle worked on aircraft during WWII and he thought that would be a good path to follow.

After high school he attended American Flight and Technology Center, a one-year trade school that has since closed due to low attendance. He has continued his education with aircraft specific training on most of the Citations, Hawker, and Falcon 50 EX and 20 at FlightSafety. Zahnow has also been fortunate in having many people guide him along the way. "I adopted early on that people are always willing to teach, you just have to make yourself available to learn. I have learned from so many I could not begin to list them."

Zahnow started at Zantop Airlines, then went to American International Airways, and from there to Duncan Aviation. He currently works as liaison between the techs on the floor to Textron Aviation (Citation and Hawker) for all facets of airframe maintenance. He is also responsible for managing the tooling needs as it pertains to Textron aircraft and provides additional technical support to techs on the floor as well as external customers. This may mean a phone call, but could also include on-site support.

Mark S. Chaney, senior director, aviation at Coca Cola Bottling Company, says, "Chuck Zahnow has shown a strong commitment to business/general aviation through his incredible work ethic and support of Duncan Aviation customers. I have seen evidence in his support of my company's aircraft as a Duncan customer and reports from other customers. Chuck also serves the industry through his membership on the NBAA Citation 500 Series Technical Committee. I have the pleasure of serving with him as a current committee member and former chairman. He represents his company and Citation operators through a strong personal and professional commitment to safety and product/process improvement. He exceeds all of the qualifications for this award. I expect to see great things for our industry from Chuck in the coming years."

Zahnow is a member of NBAA and its Technical Committee for both the large cabin and small cabin Citation aircraft which helps to better the aircraft for the owners and operators. Duncan Aviation has also given him the opportunity to speak with high school students that are considering aviation as a career either by tours or by visiting with them at a local vocational center.

As for the future, "I have never put a ceiling on my career. I have always considered each opportunity and made a decision that would best serve myself and my family. I have been fortunate to be at a company that recognized and promoted me along the way to get where I am."


Chuck is one among many of whom we are very proud. Meet them all. 

Duncan Aviation Tech Reps

Tags: Airframe Maintenance, Announcements, Careers & Recruiting

Aircraft Landing Gear Repair & Overhaul Is Not a Commodity Service

Posted by Diane Heiserman on Wed, Dec 07, 2016 @ 08:00 AM

An aircraft can't go anywhere without its legs. Landing gear are an integral part of the whole operation, yet their overhaul and inspections are more often viewed as something that is taken care of behind-the-scenes; scheduled alongside, but taking a backseat to, a major airframe inspection. Yet, it can have a huge impact on the entire project's schedule if the restoration runs into major squawks.

So who’s taking care of your aircraft’s legs?

landing-gear_blog.jpgAlthough landing gear overhaul and repair services are not available from everyone from coast-to-coast, it has a bit of a reputation of being a commodity in the business aviation industry. There are almost too many choices on where to send your gear when it comes time for inspection.

It is fair to think with FAA regulations, Chapter 5 requirements, and access to the same maintenance manuals, that all facilities are equal. You would be wrong.

In reality, landing gear overhauls are not created equal, and there are often many differences among the maintenance facilities and the quality of work performed, and out-the-door price.

So how do you decide? Let’s begin with what’s most important to you.

Video: View the entire process of a 192-month inspection of a Challenger 604 landing gear here.

Downtime

Landing-gear-shop-full.jpgAsk nearly every aviation service sales person what the top deciding factor is for their customers when choosing an MRO for service and they will tell you Downtime.

No one looks forward to having their aircraft down for inspection. Time is money and your aircraft needs to be available at all times. That is why your time requirement is one of our requirements.

At Duncan Aviation, we continually examine our processes to find more efficient avenues to deliver landing gear faster. However, we will never sacrifice quality or safety for the sake of time.

In 2015, our landing gear shop met quoted turn times a near perfect 98% of the time on scheduled, complete landing gear sets. In 2016, we are on track to improve that number even further thanks to a more efficient process and interactive calendar.

Experience

When it comes to overhauling, inspecting, and repairing landing gear assemblies and subassemblies, we’ve been doing it since 1978. The shop started out modestly as a bench at the back of our main hangar but has since grown to a 6,000-square-foot facility equipped with an overhead crane, dedicated paint booth, and cure room.

Are we the largest landing gear shop in the industry? Possibly not, but to the nearly 500 operators who rely upon us each year, we are big enough.

With capabilities on more than 50 different make/model aircraft and 3,143 unique landing gear parts, we’re confident we’re big enough for you, too.

Video: Embraer Landing Gear Before and After

Warranty

By the very definition, a warranty is a promise of continued support and service even after the project is over. We believe so highly in our own work, that our warranties cover everything. Parts, labor, and not just our work, but the work of others...covered.

I know what you’re thinking! How can Duncan Aviation possibly offer a warranty on work they didn’t perform?

It’s simple. Through our experience, we’ve been able to identify high-failure parts and will take the extra time during overhaul to make sure those parts are able to last.

We think we’ve done a pretty good job at it because our warranty claim rate in 2015 was less than 1%, 0.6% to be exact.

Pricing

Although price is likely not the most important factor in your buying decision, it still is an important one. That is why we offer three different pricing structures to fit your budget requirements.

Firm Fixed. Before your gear gets to Duncan Aviation, you will know what you are paying. Firm Fixed guarantees one price with no bill-back, regardless of the condition of the gear. We have heard from several operators who chose a lower-cost provider that with additional billing based on the gear’s condition, their final invoice was higher than our Firm Fixed quote.

NTE (Not To Exceed). With NTE, we will provide you with the maximum quote. Your final bill will not exceed that quote. It could even be less. There will be no additional billing that will drive the invoice over the NTE maximum price.

There could be some exceptions to the above pricing structures of which you will need to be aware. These include additional customer requests, optional Service Bulletins, missing or abused parts, and replacement of life-limited parts and engineering fees, if required.

Standard Pricing. Standard Pricing includes all labor required to perform the normal inspection or overhaul, and required parts. Any discrepancies found during the inspection that may require additional parts and labor, will be quoted over and above.

Each pricing structure has its advantages. We will work with you to identify which makes sense for you.

We realize that you have a lot of choices when it comes to servicing your landing gear. We know you want more than the minimum required.

  • You expect your downtime requirements to be respected
  • You require quality and experience
  • You demand a guarantee of a job well done
  • You want flexible pricing options to meet your budget,

Seems like an easy decision really. Duncan Aviation.

Tags: Parts & Accessories, Landing Gear

Duncan Aviation Gives Thanks

Posted by Diane Heiserman on Wed, Nov 23, 2016 @ 09:50 AM

Business Aviation is about more than the bottom line. It is about the friendship, trust and partnership we build and cherish.

Thanksgiving_blogDuncan Aviation is thankful for our many friends in the aviation world. We appreciate you and wish you a Happy Thanksgiving.

What are you thankful for? 

Tags: Announcements

A Customer's Simple Act Speaks Louder Than Words of Praise

Posted by Diane Heiserman on Tue, Nov 22, 2016 @ 08:00 AM

Earlier this year at our Lincoln, Nebraska, facility, we re-installed three Honeywell TFE731-60 engines fresh from their initial 3,000 hour MPI on their Falcon 900EX, that delivered on-time from its major C-inspection. The aircraft’s first scheduled flight back in rotation was a trip to Europe.

With decades of honed turbine engine skills, we experience very few surprises when it comes to Honeywell TFE731 engines and MPIs. However flying that far right after a major inspection is significant.

According to Jeff Schwebke, Duncan Aviation Engine Project Manager, most operators fly locally around their home base after MPIs are performed to make sure there are no minor squawks to work through. “This simple action by a long-time Duncan Aviation customer says more about their trust in our work than glowing words of praise,” he says.

With an average of 192 MPIs a year for the last 15 years, experience has told us which parts should be ordered in advance, what components need a closer look, and how to put together a team of trained turbine engine technicians ready to get to work for every customer.

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With the triple MPIs completed, engines re-installed, and post-MPI performance runs, the customer’s aircraft departed with better engine performance than it had when it arrived.

Watch this time-lapse video and follow along as the engines make their way through the Duncan Aviation turbine engine shop for this triple MPI event.

35+ years

Duncan Aviation began servicing the first generation TFE731-2 engines in the early 1970s. In 1981, we received two major level authorizations to work on the Honeywell (then AiResearch) TPE331 and TFE731 engines. Over the years, as Honeywell added different TFE731 model engines, each was added to our capabilities.

Duncan Aviation's Honeywell Engine Authorizations, include: 

  • Heavy Authorization on TFE731-2,-3,-4,-5,-20,-40,-50,-60 engines
  • Minor Authorization on Honeywell AS907 (HTF 7000) Series 
  • Line Authorization on CFE738 Engines, GTCP36-100/150, RE100 series and RE220 series APUs.
Here’s to another 35 years of dedicated Honeywell service!

Tags: Engine Maintenance, Videos

One in Four Duncan Aviation Team Members is a Military Veteran

Posted by Diane Heiserman on Fri, Nov 11, 2016 @ 08:00 AM

z--website-blog-photo-duncan-veterans-poster

Duncan Aviation honors its 508 Veteran Employees.

That’s 508 team members with thousands of years of military experience—and counting.

During this Veterans Day, we pause to remember the sacrifices our Soldiers, Sailors, Airmen, Marines and Coast Guardsmen have made in serving our nation where and when they were needed.

From one generation to the next, young men and women have willingly joined the ranks of America's Armed Forces. Aware of their obligations as citizens of the greatest nation on earth, they answered its call; they served the United States with courage and commitment.

Duncan Aviation wants to say thank you to all veterans who have sacrificed much in the defense of this country. We proudly support our veteran employees and are honored by their sacrifice and are proud to work side by side with these brave men and women. We cannot thank them and their families enough for the sacrifices they have made for our nation.

Duncan Aviation openly supports our Reserve and Guard members, who continue to sacrifice for our country.

We honor each of you, America’s veterans, who served so faithfully and honorably. Through your sacrifices you have secured for millions of others the blessings of freedom, democracy and the unmatched opportunities that we enjoy in the United States today.

May each of you have a safe Veterans Day. God bless each of you and your families, God bless our armed services and God bless the United States of America.

Putting Your Military Skills to Good Use

 

 

We strongly encourage military personnel to apply for career opportunities.

Duncan Aviation is an equal opportunity workplace and an affirmative action employer.

Talk to Duncan Aviation's Recruiting Contact Today

Tags: Announcements, Careers & Recruiting

It's A Wrap! NBAA 2016

Posted by Diane Heiserman on Mon, Nov 07, 2016 @ 11:54 AM

Over three days last week more than 1,100 exhibitors and attendees from all 50 United States and more than 90 countries walked the floors of the 2016 NBAA-BACE. Hundreds of them, aviation professionals, operators, enthusiasts and students alike, came to the Duncan Aviation booth. 

Here's a pictorial recap of our time at 2016 NBAA.

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We Made Big Announcements!

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Duncan Aviation Named Rolls-Royce Authorized Service Center at NBAA

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Duncan Aviation Installs Winglet Technology’s Transitional Winglet Upgrade on Citation Sovereign

 

 

 

We Showed Off At Static!

Duncan Aviation and Rockwell Collins Show Off CJ3 Fusion Flight Deck Upgrade at NBAA

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We Talked With Customers

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A Lot Of Customers

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We Had Fun

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We hope you did too. See you next year!

Tags: Conventions & Exhibitions, NBAA

Citation Sovereign: Want Winglets With That?

Posted by Diane Heiserman on Wed, Nov 02, 2016 @ 11:03 AM

Do you want to go further faster in your Citation Sovereign? We can help with that.

WingletPhoto.jpgFor much of 2016 we have been collaborating with Winglet Technology, LLC on an STC (Supplemental Type Certificate) to certify their Transitional Winglet design for the Citation Sovereign aircraft.

During this process, we installed the wing reinforcement, the winglet attach structure and the Transitional Winglets. Flight testing was completed in late August. The STC will be completed by the end of 2016, with FAA approval during the first quarter of 2017.

Any Sovereign operators, who desire greater operational flexibility and performance benefits, such as increased speed at altitude, increased range/payload, improved time-to-climb, and more, need to consider the Transitional Winglet upgrade.

Oh, and don’t forget that winglets just simply look cool. It is a ramp presence that is certain to turn heads. 

When it comes to winglets, we know what we’re doing. We are already authorized by Winglet Technology to install the Transitional Winglet STC on the Citation X.

Want to talk about it more?

Visit us in booth #3126 today at NBAA, or contact your Duncan Aviation Citation Service Sales Reps now.

Tags: Winglets

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