A preliminary inspection of an aircraft is your chance to research and investigate your potential investment before committing more substantial money to the purchase process. The preliminary inspection should include a thorough inspection of the mechanical as well as the cosmetic condition of the aircraft. In addition, a preliminary records review should be carried out to ensure that the regulatory records of the aircraft are up to date. An often overlooked step of the pre-buy is investigating which STC’s are legally installed on the aircraft.
This is a highly recommended action step to be performed before the sales and purchase agreement has been finalised. Many things can affect the value of an aircraft that may not be covered in the delivery condition within the sales and purchase agreement. An experienced team can guide you in the right direction to avoid costly pitfalls at a later stage (i.e. paint condition, general condition of interiors, cabin smoke, mould, tarnish etc.)
PRE-PURCHASE INSPECTION (PPI)
A critical requirement for the purchase process is the Pre-Purchase Inspection (PPI). The PPI work scope will depend on the age and maintenance inspection cycle of the aircraft. Typically a PPI will consist at minimum of, a maintenance inspection of the aircraft and a thorough records review. A full-systems check in-flight is highly recommended as part of the PPI.
A borescope of the engines and APU is also highly recommended, even for very young aircraft. Damage to engines or an APU can occur on the first flight after a new aircraft delivery. If not discovered before you buy the aircraft, any subsequent damage found may not be covered by the insurance. If repair is required, it will become your problem when you come to sell the aircraft.
Engaging a highly experienced technical representative to oversee and scrutinize the PPI process adds value for the buyer.
Items to consider that should be included in a PPI are:
- The level of Inspection Information
- Pre-Purchase Inspection Checklist review
- Aircraft Condition Checklist
- Spare Parts Information included in the sale of the aircraft
So ensure you have an experienced technical representative to assess the resolution of the PPI findings, to meet the agreed aircraft delivery condition.
Have an aircraft title search carried out. Don't make the mistake of finding out about a lien after you’ve purchased the aircraft. Consider the protection afforded to you by the title insurance. For a nominal fee, you can protect yourself from surprise claims against your aircraft's title.
A detailed technical acceptance process that has been thoroughly documented, is critical. This should include processes to address unconditional technical acceptance, conditional technical acceptance and rejection. There should also be an agreed ‘adjudicator’, such as the MRO or the OEM, who can settle any disputes that arise over whether or not an item identified in the PPI Report constitutes a discrepancy or defect.
ENTRY INTO SERVICE
Preparation for the aircraft’s entry into service/operation needs to begin well in advance of the transaction closing. The preparation for entry into service typically involves items such as preparing and submitting the requisite registration and operational applications for the new ownership, enrolment of the aircraft under an insurance plan, preparation for the transfer of warranties and service programs to the new Owner, etc. It is integral to the coordination of the final closing of the purchase transaction. Engage your aircraft management company as early as possible to facilitate a smooth purchase transaction and a timely entry into service for your first flight.