Clay Lacy Aviation
I miss the good old days. I’ve been buying and selling corporate jets for clients since 1994, and I can tell you that everything about the transaction process back then was simpler and easier for everyone. A client looking to purchase, upgrade or sell an aircraft would ask a few questions about cost, potential revenue from charter to offset fixed costs, market timing and conditions. Then they would hire me to buy or sell a plane for them. I would research the market, provide recommendations, get a decision from the client and move forward.
TRANSACTIONS ARE FAR MORE COMPLEX
That’s still the basic process, right? Yes, but it’s become far more complex. Complicating matters are four factors that make the services of a transaction specialist more valuable than ever before to identify and resolve issues before the transaction—and minimize risk for the client.
- A large amount of incomplete, misleading and inaccurate information online.
- International aspect of many transactions.
- Proliferation of subscriptions and service programs.
- Evolution of the role played by aviation attorneys.
TOO MUCH “INFORMATION”
Anyone can pose as an expert on the Internet, which is why so many people do. For example, search for a specific aircraft model and you’ll find page after page of “facts.” This can be confusing for clients who are unaware that much of this publicly available information does not provide the vital details they really need.
What’s likely missing are accurate accident, maintenance, and title history, service and subscription information, and other crucial details. Clients might even conclude that all this information eliminates the need to work through an experienced aircraft transaction specialist. The reality is that our services are more important than ever.
GROWTH OF INTERNATIONAL MARKETS
Not that long ago, most of business jets on the market were US-based and registered for most if not all of their lives. That made it easy to determine a plane’s maintenance history. Now more than 30 percent of aircraft are foreign-registered. Up to 70 percent of ultra-long range aircraft delivered between 2009 and 2012 went to locations outside the U.S., many to countries with little to no infrastructure or support for business jets.
For transactions today, buying and selling entities must both enroll in the international registry. That is not a DIY task. You need the help of an experienced professional.
The International Registry is an electronic registry which operates under the legal framework of the Cape Town Convention and Aircraft Protocol adopted in November 2001. It provides for the electronic registration and the protection of ‘international interests’ which are recognised by all ratifying states, with priority being determined on a “first-to-file” basis.
SUBSCRIPTIONS AND SERVICES
In addition to the engine program there might be as many as nine or more separate avionics, engine, apu, airframe, internet, phone or trend analysis programs. Each of these programs requires a document signed by the buyer, seller or both in order to transfer ownership. Not to mention the evaluation of the program against its competing offerings.
Programs may require a physical inspection of their respective area of coverage, which some people resist because they don’t want to be responsible if any problems are found.
THE MODERN AVIATION ATTORNEY
Lawyers and accounting experts have broadened their focus from legal and tax matters to include negotiating each deal point. Some provide real value. Yet others add needless complexity. All this adds up to a much more complex and time-consuming process than was the case only 20 years ago—and this complexity will only increase as time goes by.
If you are considering the purchase or sale of a business jet, the expertise and knowledge of a proven transaction specialist is well worth the investment. You will minimize or eliminate risks and liability, save time and money, and ultimately enjoy the aircraft ownership experience you deserve.
Richard brings thirty-five years of aviation experience to Clay Lacy Aviation, where he advises individuals and corporations in the acquisition, sale and management of business jet aircraft. From assisting an individual in the selection and delivery of their first aircraft to developing a comprehensive multi-year fleet plan for a corporate flight department, Richard’s thorough knowledge of the aircraft acquisition and operational planning process affords clients the guidance to make a smart purchase decision.
He is supported by the more than 300 employees of Clay Lacy Aviation, who operate 80+ aircraft, and provide a comprehensive suite of services to aircraft owners including aircraft management, charter, FBO services, and maintenance, avionics and interior repairs and upgrades.