Is Your Aircraft Ready to be Sold? May 8, 2019 | 1:30 pm 3:00 pm - PowerPoint PPT Presentation

Is Your Aircraft Ready to be Sold? May 8, 2019 | 1:30 pm – 3:00 pm MODERATOR: Lee Brewster, Flightdocs PRESENTERS: Amanda Applegate, Aerlex Law Group Blair Robson, Exxon Mobil Corporation W. Ashley Smith, Jet Logistics

Presentation Objectives • Examine the aircraft sales process • Build the sales team – it takes a team to sell an aircraft • Discuss best practices that will have a positive impact on aircraft value and demand • Recommendations on how to manage your aircraft asset in a proactive manner so it is always ready to sell

Aircraft Sale Preparation and Process Considerations • Aircraft Sales Team • Aircraft and Records Pedigree • Listing • Showings • LOI and Sales Agreement Negotiations • Pre-Purchase Inspection • Closing

Aircraft Sales Team • Define roles and responsibilities and identify who will lead the team • Team members – Director of Aviation – Aircraft broker/consultant – Aviation attorney – Escrow agent – Insurance broker (for cancellation and refund of premium paid) – Technical representative (in house or outsource?) – Lender (if financed, need payoff letter and lien release)

Aircraft and Records Pedigree • One owner or multiple – Title issues? Does the history of ownership create challenges? • Interior Configuration – will the configuration be an advantage? • Paint condition and interior condition – first impressions are important • Avionics and interior upgrades – the more the better • Complete and accurate aircraft logbooks and records – an absolute must to enhance the value of the aircraft • Part 91 vs. Part 135 – how the current operations may impact the value? • Mandate compliance – lack of compliance will influence price

Listing • Aircraft and hangar preparation – first impressions are everything • Engage an experienced aircraft photographer – lighting and angles • Prepare a complete and accurate specification – very important to sales agreement • Continually update hours, landings, and inspections on the digital aircraft brochure • Examine engine and/or aircraft programs – effect aircraft valuation; are accounts current • Compile list of loose equipment being sold with the aircraft – include in sales agreement to avoid conflict later

Showings • Planning and preparation – put your best foot forward • Proper representation of the aircraft – have a subject matter expert present • Do not negotiate the sales price or terms during the showing – do not make promises that you can’t keep • Ask for feedback from potential buyers – what can we do better for the next showing

LOI and Sales Agreement Negotiations • What do you do with a written offer? • Evaluating Fair Market Value vs. Offer vs. Seller Expectations – is the offer acceptable? • Pay close attention to revisions made during the negotiations of the LOI and Sales Agreement – do not make assumptions • Keep the process moving to a conclusion – time kills deals • Give special attention to engine/aircraft programs and loose equipment – make clear what is transferrable and be prepared for the transfer • Is the seller retaining registration number – start the process early and document it the Sales Agreement

Pre-Purchase Inspection • Clearly define in the LOI and Sales Agreement: – The scope of the pre-purchase inspection (including test flight duration) – What is a discrepancy – What the delivery condition of the aircraft must be upon closing (i.e. airworthy, inspection compliance dates, systems functioning) • If possible, send the aircraft records prior to the aircraft – the records review can be two weeks longer (on average) than the inspection of the aircraft • Proper and continual participation from the buyer and seller – it is a fast moving process and it is easy to have misunderstandings • Clarify the discrepancies during discovery by the inspection facility – this can sometimes decrease or eliminate the potential of the buyer rejecting the aircraft

Closing • Be prepared for discrepancies that occur on the flight to the closing location – how will this be handled? • Follow an Aircraft Closing Checklist – helpful to track all of the necessary steps of closing, including subscriptions and change of ownership notifications • Pre-position closing documents and funds with the Escrow Agent – Avoid surprises or delays – Successful and smooth closing

Questions?

Contact Information Lee Brewster, Flightdocs E-Mail: lbrewster@flightdocs.com Phone: 817-727-8298 Amanda Applegate, Aerlex Law Group E-Mail: aapplegate@aerlex.com Phone: 614-940-9181 Blair Robson, Exxon Mobil Corporation E-Mail: blair.t.robson@exxonmobil.com Phone: 214-208-5468 W. Ashley Smith, Jet Logistics E-Mail: ashley@jetlogistics.us Phone: 919-840-0555