Business aviation: advantages of the primary and the secondary markets

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Dal Kikin
December 5, 2018

Photo: iStock/sheilades

When it comes to choosing your own aircraft in the aviation market, one of the main questions that a buyer will face will be: “Which aircraft to buy - a new or the second hand one?”

The secondary market offers a fairly diverse selection of airplanes and helicopters from different manufacturers, with a wide range of prices, production years, colorings and interior colors, number of seats and the availability of additional equipment, while the delivery of a new aircraft must be expected, as a rule, from one year or more , except for cases when a jet already ordered by another customer is not taken for various reasons (in this case there is a chance to receive the aircraft in the configuration selected by the previous customer). Sometimes the issue of changing the interior is solved within a reasonable time, but the installation of additional equipment may become impossible or very expensive, respectively, and the delivery time will change. There are still options for acquiring "demonstrators" - aircrafts, which belong to the manufacturer and are used for promotional flights of potential buyers. Demonstrators are given a discount, although the guarantee and bonuses in the form of free training for pilots are usually provided for a new aircraft.

Photo: iStock/sheilades

Of course, the cost of a new aircraft is several times higher than the cost of a similar model in the secondary market. It is no secret that, having left the assembly line, the jet immediately loses in price. However, a number of modern and equipped with the latest avionics aircraft of the new model line in the secondary market is practically unavailable. In addition, if you already have a aircraft, as well as a desire to change it to a newer model, manufacturers offer a trade-in program, when it is enough to pay the difference between the cost of this aircraft (as estimated by the manufacturer and, as a rule, understated) and a new one.

Among the advantages of acquiring a new aircraft is the availability of warranty service, selection of additional configurations and individual features of the interior, a more loyal attitude of banks on the initial leasing fee, free initial pilot training, more active demand on the charter market in the event of leasing the aircraft to third parties. The downside is the waiting time for delivery, the so-called childhood diseases and, of course, the initial cost of the aircraft is quite high.

Photo: iStock/sheilades

The resources of business aviation airplanes are quite large (approximately 40 years and from 20,000 flight hours with the possibility of extension), so you can still buy, for a pittance, still flying models of aircraft manufactured in the 70s. Of course, such aircrewfts require serious investments in additional equipment, requirements for them are being tightened by aviation administrations of many countries.

The main criteria when choosing an aircraft of the secondary market are the model of the aircraft, the country of registration and operation, the flight time of the clock, the presence of programs on the engines and the glider, the presence of incidents and incidents, recurring technical problems, additional equipment, cabin configuration and so on. I note that in the case of choosing a specific aircraft, it is possible to put the aircraft on a pre-sale inspection (Prepurchase inspection), whose task is to identify all possible technical problems, and then, before buying, eliminate them or refuse the transaction. The buyer pays for the inspection, and it is carried out at an authorized service station that is authorized to service this type of aircraft.

Photo: iStock/sheilades

Programs for engines and glider are very convenient, because even when selling an aircraft, the right to use the programs passes to the buyer and, if necessary, to overhaul the engine. For example, a new owner enjoys all the rights and benefits of a contract at no additional cost, except for the fee to re-register the contract for the new owner.

And the undoubted advantage of the secondary market is the fact that within a few days after the closing of the transaction, you can actively use your jet or helicopter.

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