Before purchasing a commercial aircraft

The purchase of an aircraft is a major commitment. This practical checklist walks through the considerations every buyer should weigh before signing.

The purchase of an aircraft is a major commitment that requires careful consideration. Before entering into any purchase transaction, many aspects of aircraft ownership must be weighed, from pre-purchase inspections and replacement parts to maintenance, records, engine logs and insurance. The checklist below covers the key considerations.

1. Budget. Decide how much you are willing to spend. Beyond the purchase price and applicable taxes, include operating costs per hour, maintenance costs and the cost of replacement parts.
2. Financing. If financing, compare rates from different finance companies. Aircraft financing differs from a car loan. The amount financed is the main factor, and many lenders will not finance older aircraft.
3. Pre-qualify for financing. Financing pre-approval offers flexibility and the ability to act quickly on good opportunities.
4. Aircraft type. Larger aircraft suit longer trips; a smaller aircraft may suffice for short-range needs. Consider speed, weight and range, along with impact on price, landing requirements and potential routes.
5. Aircraft hangar. Confirm the location of the primary hangar and maintenance bases for the aircraft.
6. Pilots. Ensure you can hire a qualified pilot for the desired aircraft. Pilot salaries depend on aircraft type, confirm you can afford to crew the aircraft you intend to purchase.
7. Aviation consultants. Consult experienced advisers for your purchase. Experts in brokering, taxes and the technical aspects of commercial aviation should be considered.
8. Legal counsel. Tax planning and aviation regulatory issues matter. You will need legal counsel familiar with aviation law, tax law and insurance, Danan Aviation Consultants can assist with legal issues relating to your purchase.
9. Insurance. An experienced agent will know the coverage and minimum requirements you need. Aircraft liability insurance is among the costliest types and depends on the age, model and value of the aircraft, check rates before buying.
10. Insurance certificate. Secure the appropriate insurance certificate if the aircraft purchase is being financed.
11. Airworthiness Directives. ADs are legally enforceable aviation regulations. Danan Aviation Consulting will check the nature of the ADs and ensure the aircraft logbooks comply with all applicable ADs.
12. Purchase agreement. Danan Aviation Consulting will assist in preparing an aircraft purchase agreement detailing the terms and conditions of the transaction.
13. Due diligence. After execution of the purchase agreement, we assist with due diligence of the aircraft and the seller, ensuring service and maintenance logs and other records are complete, and confirming damage history.
14. Aircraft records. Review maintenance reports to confirm whether components need replacement. Examine any damage history closely, confirm engine flight hours and life expectancy, check for corrosion, and inspect flight control surfaces and landing gear. Engine logbooks, equipment list, weight-and-balance data and the flight manual must be current.
15. Pre-purchase inspection. Complete a full pre-purchase mechanical inspection of the aircraft, inspecting all components before you commit.

Danan Aviation Consulting can support you at every step, from budgeting and financing through to airworthiness compliance, purchase agreements, due diligence and the final pre-purchase inspection.