The Duncan Download Blog: Business Aviation Advice & Observations

 

As one industry broker told us, “Without ADS-B, you may as well use your aircraft as an expensive paperweight. No one is going to buy it.”

Duncan Aviation’s Aircraft Sales & Acquisitions team says that whether an aircraft is equipped with ADS-B Out is already affecting its resale value. In this buyer’s market, if you don’t pay to upgrade to ADS-B Out now, the price you’ll be able to ask for your aircraft will be significantly less than if you had performed the upgrade.

And, with less than 35 months remaining to equip the entire US business aviation fleet with ADS-B Out avionics equipment, there will likely be shortages of hangar space at qualified shops as the deadline draws nearer. From now until the mandate deadline, January 1, 2020, roughly 167 aircraft per month still need to find available hangar space and qualified technicians.

Avoid The Scheduling Crunch

If you are not yet ready for the required upgrades and are worried about finding available capacity at certified service centers, take a look at our ADS-B Slot Program

The Duncan Aviation ADS-B Splot Program lets you buy a slot to reserve a confirmed date and hangar space for your aircraft at one of our Satellite Avionics Shops. The deposit will will applied to the ADS-B installation when you arrive.

By scheduling now, you will see better pricing, have easier access to the certified transponders and GPS sensors, and find time for the upgrade/installation that fits your flight schedule and calendar.

Contact the Duncan Aviation Satellite Shop (www.DuncanAviation.aero/locations/#satellites) nearest you, one of our Duncan Aviation Avionics Installation Team Members (www.DuncanAviation.aero/services/avionics-installation/contacts), or call +1 402.475.2611 for more information about ADS-B upgrades and the new slot reservation program.

ADS-B Myth Busting

ADS-B Myth #1: There Is Plenty Of Time

ADS-B #2: The Deadline WIll Be Extended

ADS-B Myth #3: The Prices Will Drop

ADS-B Myth #4: We’re Going To Sell Our Aircraft Anyway

ADS-B Myth #5: I Don’t Need ADS-B

Peter Burwell’s experience with aircraft consignments have not all been positive experiences. “I have had several brokers feed me a line of garbage, telling me what they think I should do in order to achieve their objectives, not mine.”

While Burwell Enterprises’ 39th aircraft, a Falcon 900EX, was in prebuy at Duncan Aviation in Battle Creek, Michigan, Peter, president & CEO, sought recommendations on whom to work with in order to sell number 36, a Challenger 601. It took no time at all before he was handed the name of Doug Roth, one of Duncan Aviation’s Aircraft Sales and Acquisition team members.

Burwell Enterprises has operated and flown so many aircraft over so many years that when it comes time to add to or upgrade their fleet, Peter puts his trust in the experience of his flight department to research and find the right replacement aircraft while at the same time working with a broker to handle the previous aircraft’s consignment.

Although because of previous encounters, he was skeptical when he picked up the phone to call Doug Roth.

Doug has been selling aircraft for customers for more than 36 years. During that time, he has learned that no two transactions are alike. What works for one customer will not necessarily work for the next. So the first thing he does when he talks with a client is LISTEN.

Within a few minutes of speaking with Doug on the phone, Peter knew this experience would be different. “Doug was honest and upfront. He provided me with the facts without the fluff. He shot me straight and I believed him,” said Peter. “I feel I can trust him.”

After meeting with Peter and examining the Challenger, Doug tapped into the technical resources at Duncan Aviation. Armed with the knowledge of airframe, engine, avionics and interior experts and his personal knowledge of and experience with the preowned aircraft market, Doug told Peter exactly what he would do to best represent him and the aircraft. Then, he followed through and did what he said he would.

“Whether buying or selling, I work for my client every time, keeping their objectives in mind. ” says Doug. “I listen to them and create a plan that leverages all the resources I have at Duncan Aviation combined with my knowledge of aviation and the aircraft sales aftermarket.”

It may be several years down the road, but Peter says he will absolutely return to Doug to sell number 39.

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Read more from the Fall 2015 Duncan Debrief Magazine

When acquiring or upgrading a business aircraft, selecting the right make/model is one of your most important decisions. Duncan Aviation’s Aircraft Sales and Acquisitions team can help you narrow your selection with the use of a comprehensive and up-to-date Model/Market Summary. The summary data is compiled for the light jet, mid-size jet and long-range jet categories. And the team regularly updates the data in these lists with the latest market intelligence on business aircraft models in operation today and how they compare to others in the same size category.The Model/Market Summary is sorted by the seats-full range for aircraft built in the last decade. It displays one-line descriptions detailing several attributes, including the following:

• Years Produced. The range of years the model was in production.
• Vref Price Range. The current marketing value according to the Vref - Aircraft Value Reference.
• Variable Cost / Hour. The estimated cost to operate the aircraft at full capacity.
• Normal Cruise Speed.
• Cabin Volume / Length / Height.
• Cabin Seats. The number of available seats on the aircraft.
• Expected Avionics. The expected avionics found in the Flightdeck.
• NBAA IFR Range-Seats Full. The list is sorted by this, the flight range in nautical miles with all seats full.
• NBAA IFR Range Ferry. Flight range in nautical miles with no passengers.
• Payload with Fuel Full. In pounds.
• Average Fuel Burn. In gallons per hour.
• Pilots Required. The number of pilots required to fly the aircraft.

The data in this summary is a good starting point when considering your first aircraft or your next upgrade. All the data in these reports comes from Conklin & de Decker aviation information, the aircraft manufacturers’ preliminary data and Vref valuations. 

ADVICE

Doug Kvassay, aircraft sales representative at Duncan  Aviation, first developed the Model/Market Summary when a client called asking for advice over lunch about upgrading his light business jet to one that had a little more payload and range. Doug wanted to make the process of narrowing down the search as easy as possible, so in the days leading up to their meeting, he created a listing of every model in the light jet category, taking care to detail several attributes. Through a process of simple elimination, by the end of their lunch, Doug and his customer had identified an aircraft model to investigate further. They closed on an available one just one month later.

Seeing how much easier this tool made the identification of the most appropriate model of aircraft for the specific needs of his client, Doug shared his concept with the rest of the Duncan Aviation Aircraft Sales and Acquisitions team. Since then, they have honed the information and expanded it to other size categories. Now, they publish it quarterly.Download the latest model/market summary now. 

 

Contributed by Doug Roth, aircraft sales rep

As your business aircraft ages, there will come a point when you begin to ask yourself if it is still worth spending money on it or is it time to sell or trade. This generally occurs about the time a major inspection, engine overhaul, paint/interior refurb or mandatory avionics upgrade is coming due.

There are a lot of factors that go into making the decision to reinvest in the aircraft, but the biggest and most obvious is whether the money is well spent. The answer to this question can actually be quite simple and lies in the aircraft value once the investment is made.

The value of an older aircraft can be determined with this simple formula.

Value= Base aircraft marketable value + engine value + inspection value + paint / interior value

However, all the parts that go into it can be rather complicated. Let me walk you through it.

Base Aircraft Marketable Value

For a quick determination of the base marketable value of your aircraft, you can begin with industry-recognized aircraft value reference guides, such as Vref and Aircraft Blue Book. These books provide recent sales data and information on your specific make model aircraft. However, at the time of their publication the information can be almost six months old so they may not accurately reflect any market changes that are beginning to trend.

If you need accurate market information to make a decision about selling or trading your aircraft, it is wise to consult with an aircraft sales professional for the latest in market conditions.   

Keep in mind, this base value is just a starting point. You still need to take into account how fresh your inspections are or how many hours remain on the engines. These factors will have an impact on the overall value, both positive and negative.

Engine Value

The model of your aircraft and whether or not others like it are typically on an engine maintenance program, will determine how you calculate engine value.

Example of Engines On Maintenance Programs

The majority of aircraft with the Honeywell TFE731-20,-40,-60 engines are typically on an engine maintenance program. If your TFE731-xx engines are on a maintenance program then their value adjustment will be zero, because they are considered base average among those model engines. However, if your TFE731-xx engines are not on an engine program, then adjustment to the base aircraft value will be negative the amount to buy into the program.

Example of Engines Not On Maintenance Programs

For aircraft with engines not typically on a maintenance program, such as aircraft with PW JT15D-5 series, the value adjustment is based on the number of hours remaining, above or below the engine’s mid-life. Take the number of hours above or below mid-life and multiply it by the hourly operating cost of the engine. If the hours are below the mid-life, add this to the base aircraft value. If the hours are above the mid-life, subtract.

Once an aircraft reaches 30 years, engine values are based more often on the life remaining rather than an engine program. Engines with less than 1500 hours will have a negative value adjustment based on the cost per hour.

Inspection Value

An aircraft’s base value on the market typically assumes that the airframe inspection life is at 80%. Therefore, an aircraft with a fresh inspection could add up to 20% of the cost of a typical inspection to this base value. The opposite is also true. If the inspection life is less than 80%, the value will be reduced.

For example on a Falcon 50, a C check can cost in the neighborhood of $250,000 and will add six years until the next major inspection. If there are three years, or 50% remaining in the inspection cycle, then the base aircraft value will be reduced by 30%, or $75,000.

Cosmetics Value

With normal use an aircraft paint and interior can have a life of about 7 and 8 years, respectively. Applying the same rule of 80%, the cost to restore the paint and interior can be applied to the base value in the same way we did with the inspections. 

However, the real value of your aircraft’s interior rests solely upon your personal preference and how you use it, not its age. You may love that 15-year interior because you were involved in the original selection of materials and colors.

Paint is similar, where personal preferences play a part, but to a smaller degree. Having the aircraft painted at major inspection intervals is beneficial to maintaining the value because a fresh coat of paint helps to protect from possible future corrosion.

Nonetheless, if you are considering selling, the value of the paint and interior rests in the personal preference of the buyer. Even a five year interior may be replaced because it is just not the new owner’s style. 

Avionics Updates

Deciding whether or not to invest in the necessary avionics to meet the upcoming mandates on your aging aircraft is a topic for another time. Stay tuned.

However, for the purpose of this example, all values above being equal, an aircraft with WAAS/LPV and/or ADS-B will have a significantly higher value than one without.

Total Aircraft Value

Now you have a snapshot of what your aircraft is worth. What now? Do you spend the money for the upcoming inspection or overhaul? Is it time to sell?

With later model aircraft, the costs associated with major inspections or restoration may be relatively small in comparison to the base market value, making the decision to invest in the work easy.

As aircraft grow older, those costs become larger in comparison to the base market value to the point where the majority of the aircraft’s value will be in the inspections and/or restorations.

This is where you need to take a hard look at and assess your future flying needs. If your aircraft meets payload and range requirements for the foreseeable future, the investment may be worth it.

Especially if your foresee operating the aircraft for at least 40% of the life of the inspections and/or restoration. In the end, when you reinvest, you are building value and life back into your aircraft to meet your future needs.  Your decision to invest should be based on your travel needs and requirements and what is most cost-effective for you.

Duncan Aviation Aircraft Sales

Need help in evaluating the value of your business aircraft? Contact your Duncan Aviation Aircraft Sales Representatives. We'll be happy to help. 

Download the latest business jet model/market summary here. 

http://www.duncanaviation.aero/aircraftsales/model-market-summary.php

 

 

One of the hardest decisions to make when purchasing a business jet is to purchase the make and model that is right for you and your business needs. The last thing you need is to take off on your first business flight and discover your aircraft does not fully meet your requirements.

A full schedule with multiple passengers for long hours requires an aircraft with appropriate cabin capacity and fuel range. Anything less will result in frequent refueling stops and a lot time sitting on the tarmac.

However, buying a long-range jet for short infrequent flights will result in higher than necessary operating costs.

Identifying the right aircraft for you is can be a complicated process. With more than 80 make model business aircraft to choose from, how do you narrow the field to make the right decision?  

You Need A Tool

• A tool that breaks down all the available business aircraft by category, available features and many other details
• A tool that helps to prioritize your business needs and desires, narrowing the pool of appropriate aircraft
• A tool that would simplify the investigation of the market place, identifying several available options that meet your needs

 Yeah...Here Is That Tool

And if you still have questions...these are the guys that can help you!

Duncan Aviation Aircraft Sales Representatives

When buying or selling an aircraft, nothing can be more stressful than the "moment of truth"–that point in the transaction where the buyer and seller are presented with the aircraft squawk list and it is time for them to negotiate and finalize. Partnering with a service provider who knows how to clearly present its findings and communicate well with all parties involved can allow the key players to breathe a bit easier.

"Pre-purchase evaluations are complex, there’s no way around it," says Tim Klenke, an airframe service sales representative with Duncan Aviation. "Stress can be tempered somewhat, though, when the pre-buy evaluation occurs at a facility with a good reputation, excellent communication and integrity."

Pre-purchase events and aircraft purchases are uncharted territory for many operators. There are a lot of people involved, lots of choices to make and usually some surprises along the way.  

Here are Tim's suggestions on what to look for when selecting a service provider for a pre-buy evaluation.

Top 6 Things When Selecting a Pre-Buy Provider

1. Reputation. How is the facility viewed within the industry?
2. Experience. How many pre-buys does a facility perform? Do the buyer and seller feel comfortable with the provider and have confidence in the provider’s ability to understand and execute the pre-buy according to the terms and conditions of the buyer/seller agreement?
3. Post pre-buy capabilities. Can the facility perform interior work, exterior paint, avionics upgrades and larger inspections?
4. Import/export proficiency. Does the facility have these services if the airplane is coming from or going overseas?
5. Communication. This skill is critical in pre-buys; everything must be crystal clear and understandable for all parties – buyers, sellers, brokers, lawyers and the service facility.
6. Technical support. Does the facility offer in-house Technical Representatives for each model airplane who can engage quickly with OEMs and teams to resolve unexpected issues without disruption in schedule?

Aircraft paint can beautifully reflect hours of painstaking care and preparation—or it can cover a multitude of sins. The trouble is, you can’t always tell which applies to your aircraft until long after the job is finished.

According to George Bajo, completions sales representative for Duncan Aviation, “Anyone can shoot a glossy coat of paint. But the value is in the details.”  

He goes on to suggest operators conduct a visual inspection for dirt specs in the paint finish as one identifier of a quality job. “While a few dirt specs should be expected, a large number is cause for concern.”

The attention to detail at the sealed windows and cleanliness of the painted landing gear are also evidence of a job done right. New stair treads, dressed boots, wiped down wheels and wheel wells, painting inside of gear doors, radome boots that don’t yellow and erosion tape are also extras that customers should expect.

“It’s all about the details,” George says. “That’s what you pay for.”

Duncan Aviation Field Guides

To help aircraft owners identify a quality paint job and decide when to take an aircraft in for a touchup or full repaint, Duncan Aviation industry experts answer questions about pressing paint maintenance issues in the recently updated “More Than Skin Deep: Paint Maintenance and Turbine Aircraft Value” field guide.

This field guide explores routine maintenance and turbine aircraft market value, paint processes, and criteria to consider when selecting an aircraft paint service provider.

Paint Maintenance Topics

• Paint Maintenance Topics
• How to Recognize A Quality Aircraft Paint Finish
• How Long Does Aircraft Paint Last?
• Routine Maintenance & Paint Integrity
• Aircraft Paint Services

Duncan Aviation's field guides address topics of importance to business aircraft operators around the globe and are written by our very own technical experts.

These documents are available as free PDF downloads.