Articles - Page 27 of 28 - Mesinger Jet Sales

Real Value

I am on a flight home from New York after a successful few days showing our Gulfstream IV and our Falcon 900B to two different buyers.  And, I’ve been thinking about conversations I have had this week with many different buyers and brokers regarding what determines real value and what distinguishes real value between two competitive offerings.

I was reminded yesterday when I showed our Falcon 900B S/N 42 of what a great airplane it really is. It has average total time for its vintage.  The records are impeccable.  The aircraft has no major damage history. The cosmetics look great.  It has a lot of avionic and cabin upgrades. The engines are on MSP Gold.  And, we just lowered the price by $900,000 last week making it the most competitive offering in the market.  Then I thought how ridiculous it is that most lenders would probably refuse to loan money to a buyer with good credit, even one possibly willing to put 20% down, based on age alone.  Many lenders clearly don’t recognize real value.  I’m glad that the prospective buyer that I am talking to does!

On Monday of this week I showed the Gulfstream IV that we are representing for sale.  I have written before about the need to look below the skin of the onion to really understand the differentiating factors between competitive offerings.  The prospective buyer asked me why our aircraft was worth more than others that are on the market.  If you took all available Gulfstream IVs and just looked at total time and vintage you would think that they should all be worth the same thing.  If you, however, study the inner layers of the onion for each, you would clearly start to see significant tangible differences: engine programs, modifications, cosmetic condition and more.  If you continue to dig down you will also start to understand the value of pedigree and maintenance history.   I really believe that the great pedigree and condition of our GIV S/N 1165 (average total time, full engine program, highly equipped and with high ASC compliance, no expenses spared maintenance, average cosmetics, ready for immediate worldwide operations, one U.S. owner) will result in lower go forward costs compared to other offerings.  No two aircraft are exactly alike and you need to look at the inner layers of the onion to understand true value or you could end up with pretty skin and a rotten core.

I could go on and on, but the point has made.  Aircraft don’t just have to be new or like new to have real value.   And, there are real tangible and intangible value differences that can effect the go forward operations and costs of the aircraft.  They aren’t all worth the same just because we are in a depressed market.

Pre-Purchase Planning, Part 4 – Log Books and Records

Never enough can be said here.  Prior to the aircraft leaving for pre purchase “all” records should be itemized with a very detailed inventory list.  Boxes of some sort should be used to hold all historical records and these should be identified in some manner and shown on the inventory list by number (could be chronological) to their specific contents. 

The records review by a facility during a pre purchase is by far the most time consuming and important part of this process.  It will most likely be the pacing item to the whole operation.  It has been my experience that most facility personnel tasked with records research will inspect what is immediately available and easily accessed and beyond that write a discrepancy.  I see many discrepancies written for missing data, manuals or equipment paperwork which I can find in box sent with the aircraft after a couple of hours of searching.  Here again these are written discrepancies that must be cleared by someone. 

All log books must be available at this time, they must be in good condition, chronological, “every” entry must have the correct documentation, including appropriate signatures and dates.  Every entry which makes reference to a document (337, engineering letter or drawing) should be supported.  It helps to have a copy of the FAA file on CD or even better a three ring binder containing printed chronological copies of all.  All installations will require “instructions for continued airworthiness,” copies of pertinent STC cover sheets as well as flight manual supplements when referenced.  In speaking to these items it is also a good thing to check that CAMP records are supporting and tracking them per the ICA data.  All installed parts as we know now require traceability.  Some operators leave this data with filed work orders or CAMP records, place them in log books or keep them all in single location. 

All life limited components during a pre purchase will have to show documentation by serial number to the unit installed or face being unnecessarily overhauled.  It is good practice to take a CAMP status run and go down the list matching parts to paperwork.  Missing information can usually be tracked down by log entry and work order and supplied by the vendor ahead of time.  It is better to send all available records to meet the above requirements so they are available to the facility at the time of inspection than to have the facility bill their labor to research them. 

All flight manual and operations manuals will have to be current on their revision status and available to the facility.  During a records review a facility will also research “all” AD listings for an aircraft, this includes the vendor and appliance AD lists.  In the normal scope of operations most operators only concern themselves with pertinent AD list to their specific aircraft, so what one could see at this time would be a long AD list supplied by the facility as “open” yet they still need to be addressed in the records as “Not Applicable.”  On older aircraft this list can be quite long and a facility will try to charge large amounts of labor to research these and sign them off as NA.  An operator could take the supplied list and supply the list of NA sign offs to address this issue. 

Any damage history or major repairs due to corrosion, however minor, should have as much supporting documentation as possible.  It is a good idea to take all materials affected (work order, photographs, drawings, engineering statements and complete parts lists) and make copies of all to be placed in specific box or file folder envelope along with copies of the log entry and a brief description of the event and have it readily available to the buyer and the facility.  Fear of the unknown is the single most concern to an unknowledgeable buyer.  This type of presentation tends to minimize the event and calm nerves and keep a buyer from running away.

Logs and records can mean as much to the value of the asset as the asset/aircraft itself.  This is a critical component of any pre-purchase inspection and the above are some simple suggestions that can help the log and records research go smoothly.

“MSP doesn’t allow us to boroscope the engines.”

I cannot tell you how many times in the course of a year I hear that statement from a maintenance facility; many times from the same facility and same person within a period of a couple of months about different aircraft.  That statement is not exactly true and should be completely understood by the seller and the buyer during a pre purchase inspection.  I have also heard that MSP will only allow a visual inspection of the aft part of the engine to identify any irregularities and 5 point runs to determine the overall health of the engine and that if there is a problem, even from FOD, then this should be sufficient to identify the problem. 

I can say from past experience that we have successfully accomplished those steps then complied with full boroscopes only to find internal issues with the engines that required disassembly.  To address this issue MSP has published many letters to facilities (read that as Authorized Service Centers) and operators to completely state their position.  What we do know and should all adhere to based on that information is as follows:

  • MSP should be notified by the maintenance facility and the operator prior to any work taking place
  • The facility should be an authorized service center or at the very least supported in writing by Honeywell
  • MSP does state that a performance evaluation is not required for transfer of the contract to the buyer
  • Per MSP should the buyer elect to go beyond that they recommend a visual inspection of the inlet and tail pipe areas (at buyers expense) only
  • Should an operator (or buyer) elect to expand that further they will be responsible for all related “test” cost.  These “tests” could include vibration surveys, 5-point performance runs, boroscope inspections, bearing cavity and accessory gearbox pressure checks, special SOAP samples and analysis and flight tests
  • MSP is not obligated to pay for any repairs as a result of an owner or buyer electing to perform the above inspections
  • Per MSP if a maintenance action is deemed necessary by the expanded inspections Honeywell will pay for said repairs under normal guidelines (excluding FOD) at a warranty level with a 5% handling fee on Honeywell parts only
  • Per MSP in order for the above statement to be valid they must be formally notified of the location and date of any such expanded inspection (as we have already touched on).  And, very important, they must be “given the opportunity to have a technical representative present during said inspection.” In the event the expanded inspections identify the need for engine repairs normally covered by MSP, Honeywell is “given the opportunity” to re-inspect the engine and direct the maintenance workscope to be followed

I can say from past experience that Honeywell and MSP want the customer to be happy with their experience and have a safe and operable engine.  They will do all they can to support that.  MSP understands that addressing a minor problem now means that we could be preventing what could lead to a more catastrophic event later on.  If FOD damage is found it can be identified by the maintenance facility and addressed by the seller’s insurance as it should rightly be.

Hopefully these thoughts will help take away some of the scariness of the dreaded per purchase engine or APU boroscope and prevent starting into things on the wrong foot.  I cannot reinforce enough  that you  need to “communicate!” with the facility and Honeywell MSP, follow the steps above and point them out to the facility if they tell you “MSP doesn’t allow us to boroscope the engines”.

Pre-Purchase Planning, Part 3


At some point in advance of the aircraft traveling to pre purchase there should be a complete and thorough cockpit sweep and avionics functional check (it is a good idea to have a pilot and maintenance person work together here).   Preferably this should be done far enough in advance to address any major issues that are found by exchanging or troubleshooting expensive avionics boxes or equipment.  I see many discrepancies written by facilities during pre purchases for minimally functioning systems that in a day to day operation would be allowed by either MEL or the understanding that it is an intermittent problem and not yet identified.  These can be the most time consuming and expensive issues in a pre purchase to repair. 

Any item not used on a daily basis such as HF radios, phone systems and heads up displays are prone to small issues that can become a concern by someone not familiar with the aircraft and must work correctly at the time of the sale.  It is important that each item or installed system should have available a dedicated manufacturer’s manual and most likely a current flight manual supplement.  From that, find the documented self test or operational test for that equipment and complete it step by step as that is what will happen at the facility.  These tests are seldom done nor are they truly required on a daily basis and can uncover problems that go unnoticed in normal operations.  Also check the cockpit for burned out light bulbs, loose switches or knobs, crew seat operation and all required emergency equipment.  Here again, many of these items can be fixed simply in house but would require additional labor and undue exposure at the pre purchase.

It’s late and I’m tired, but I’m proud.

It’s late and I’m tired, but I’m proud.  I am on a late flight home on Friday night.  I have been in four cities since last Sunday and I wouldn’t trade any of it.  I have been in Tucson, Arizona to show a Global Express that we are selling.  From there, I went home to Boulder, Colorado long enough to repack and sleep for about 3 hours before heading to go to Houston, Texas to show a Falcon 2000 and from there on to New York to show both a Gulfstream IV and a Falcon 900EX for two different clients to two different buyers.

We still have problems in our industry.  Not every market is recovering.  Overall, however, people are flying.  People are buying airplanes.  People are modifying and refurbishing airplanes.  I think that mostly, people (and companies) are excited to get out again.  They are excited and ready to go see their clients, customers, partners and operations and travel for personal reasons.  We still have obstacles and hurdles to cross.  Parts of our global economy are still struggling and some are just starting to experience their worst pain.   Our aircraft finance markets are still weak and the lenders inability to see the value in older aircraft not only saddens me, but angers me.  I could understand it a year and two years ago when prices were inflated in some cases 100 percent and values were in free fall.  Today, however, at current market values our financial institutions need to recalculate their understanding of true value and not write off the majority of corporate aircraft worldwide because of age alone.

I am proud of the work that I have done this week.  During over two years of slow sales we (J. Mesinger Corporate Jet Sales, Inc.) never put up the “gone fishing” sign.  We never retreated.  Instead, we diligently kept up our communications.  We maintained our marketing.  We supported our clients’ needs.  We provided good guidance and good information to help them make smart informed decisions in difficult times.  As a result, today, we are busy.  And tomorrow, we will still be busy and we will continue to thrive in our industry. We also don’t do it alone.  We have a lot of good peers in our industry and this week I met with many of them as they represented buyers for aircraft that we are representing for sale and we talked to several representing sellers for aircraft we are working to buy for clients.  Thank you to all of you in our industry that kept working hard in our hard times.  Thank you to all of our clients for your support.  People don’t often stop long enough to say thank you.  We could not do this if we were not all doing it together.  Tonight, on this late flight home, it’s late and I’m tired, but I am proud.

Everyone wins as buyers come back, but we aren’t out of the woods yet.

I am writing you from an airplane as I fly home after showing a Falcon 900EX that we are representing for sale.  This is an exciting time in our business as buyers come back in and I am proud to say that we are working on many pending transactions both buying and selling.  Everyone wins as buyers start buying again.  A seller finds a buyer.  A buyer finds a good aircraft at a great value.  A service center gets business for a prebuy inspection.  Brokers help facilitate the sale.  Attorneys help contract it.  Insurance agents sell new policies.  Flight departments are built, sustained or expanded.  Fuel is sold and so on. 

At the same time, I was reminded today of the harsh reality that we are not out of the woods yet.  We have been representing an incredible Challenger 601-3A for a long time.  In 2007 we sold eleven Challengers.  Today, the Challenger markets are still sitting virtually quiet as other markets around them start to move.  This particular aircraft has approximately 6,000 hours total time.  The engines have 200 hours each since overhaul.  It is highly equipped and it has had many avionic upgrades over the years.  It has a 12 passenger interior in good condition.  And, the records and pedigree couldn’t be stronger.  Yet, we have struggled to find a buyer even though it stands out as one of the best aircraft and best values in the 601-3A market (call today to learn more if you might be interested in the aircraft). 

About a month ago we started working with a buyer.  He seemed well qualified and he built the right team of partners around him to help facilitate the sale.  We agreed on a sale price and sale terms and had a signed LOI and deposit in escrow.  Unfortunately, today he terminated our sale because the bank that initially approved him has decided they are unwilling to loan on the aircraft.  Actually, he said that he contacted many banks and none of them will finance the sale through a traditional aircraft loan; even with his willingness to put down 20% or more.  The objection was not about the merits of the aircraft or even its competitive value in the market, but instead the age of the asset.  The aircraft is a 1989 model and none of the lenders he talked to want to loan on an aircraft that is twenty years old. 

As I sit here thinking about losing this potential sale I am reminded that as great as it is to see buyers come back into the market, we are not out of the woods yet. Many make and model markets are experiencing great activity, however, that activity is predominantly in the newer aircraft.  We still have challenges ahead of us.  Hopefully the buyers, lenders and our industry won’t lose sight of the fact that for aircraft that are well maintained, age alone won’t make them obsolete.  Even aircraft that are twenty years old or older can provide safe reliable lift for owners, operators and buyers for years to come.  There is a lot of value in some of these aircraft.  This particular Challenger 601-3A would have sold quickly in 2007 for $11,000,000 or more.  Today, we are only asking $4,850,000.  I have spoken before about looking at all of the layers of the onion to understand the full story about an offering.  Age is only an outside layer.  I hope that buyers (and their lenders) don’t miss the sweet inside due to the age alone.

International Aircraft Transactions: Its the people that make them successful.

This week I was privileged to both co-moderate as well as speak at the International Aircraft Transactions conference at the EBACE Convention in Geneva. The event was a success and very well attended. The attendees list was made up of brokers, attorneys, lenders, manufacturers  and other industry professionals and it was a truly an International group. This made for a very engaging program. The question and answer period that followed each presenter was really great with terrific perspective. What became clear very early into the day were the complexities of international transactions. There is no such thing as a cookie cutter technique. Every country has very different tax considerations, regulatory considerations, recordation body complexities. So even though the day was filled with wonderfully skilled professionals, each speaking eloquently to their assigned topics, weaving the day together was challenging at times.

What was not challenging was identifying the real solution to building a successful International aviation transaction; good people. After all, isn’t that usually the real solution to complex problem solving? I have always said I am not in the aircraft sales business, I am in the people business. People selling people aircraft. This piece of our business is no different.

So here would be my strategy for building an International transaction. Get a clear understanding of the client’s operational needs. This first needs assessment should be based on their travel patterns. Once you have identified the desired home base and the most common trips, and then reach out to that group of local players that will make up the transaction team. This team should be made up of local tax authorities, local legal advisors, and local specialists in the regulatory and airspace territory and local operators who are familiar with the intricacies of the country or countries that will be regularly flown in and out of. It is also important to find lending partners with familiarity and willingness to work in the buyer’s country and where the aircraft will be operated. In short build a group of highly skilled, carefully chosen people who can lend their individual talents to the strategy.

As I invest in traveling to shows like EBACE in Geneva, I am reminded of one of the most valuable reasons to come. Networking. Not just with the usual group that a broker would want to meet. Networking to build the team players that can assist you and your clients as that clientele grows globally. The only way to stay relevant as well as a team captain in these processes is to be able to build the team. So next time you plan on a trip to an event that aggregates industry professionals, remember to add to your target list of people to meet, those people that can help you complete, talk and act professionally in this arena.

By the way, this show was very upbeat and very well attended with many great people feeling good again about the future of our wonderful and exciting industry.

Exceeding Expectations

People often have a litany of questions when I tell them what I do.  The simple answer is that I work in a family business as an aircraft broker and we help people buy and sell corporate jets on an exclusive basis worldwide.  In today’s economic environment most people immediately question if anyone is buying or selling.  I am proud to say that it is nice to be able to tell people that buyers are starting to come back into the market.  For some, the conversation ends there and we move on, but many people I meet often ask more questions and they are curious what I like about my work.

Buying and selling corporate jets is how we earn a living.  It is how our success is measured.  It is not, in and of itself, why I jump out of bed in the morning.  I jump out of bed excited about buying and selling corporate jets because each day is a new opportunity to exceed expectations.  To deliver on a promise that I/we make each time we talk to a new prospective client or present a proposal.  The first sale that we make is not the sale or acquisition of an aircraft, but the sale of our service.  I do not know that I would enjoy selling widgets, but selling our service is an entirely different matter.  When I make the sale of our service, we are the product.  We can affect our deliverable every day.

The biggest testament to our work is that year after year over 80% of our business is from repeat and referral clients.  The rest is new business that we find through our marketing, speaking engagements, reputation and cold calls.  Every day that I go to work I have an opportunity to meet, exceed or fall short of expectations.  Every day I work to exceed them.  There is nothing more gratifying than when a client tells us that we have exceeded their expectations and they are happy that they made the decision to hire us.  It is that opportunity and that ability to directly affect our deliverable and fulfill a promise made that I jump out of bed for.  Meeting this challenge is rarely easy.  It is a constant pursuit and one in which we can never let our guard down.  We are available to our clients twenty-four hours a day seven days a week and that occasionally impacts my personal world.  But, I grew up around this business watching my father and today, I would not trade any of it.  Call me hokey, but I love what I do.

Pre-Purchase Planning, Part 2


Apply the same principles to the interior of the aircraft as you do the exterior.  Take time while the aircraft is powered up to functionally check every system in the aircraft (in today’s world that means manual seat adjustment, cabinetry latches and all door operations), check all lighting, switches, entertainment systems, monitors, galley equipment and water systems.  All systems must function within maintenance manual allowable tolerances as dictated by the manufacturer or as they are operationally equipped.  No items can be deferred in a pre purchase situation. 

If there are systems installed, but placed in an inoperable condition due to operator requirements then you should give consideration to technically removing them and seeing that they are not advertised at the point of listing the aircraft.  We see this with systems such as DVD and fax machines.  In some cases they were originally installed never used much and when they broke due to lack of use they are never repaired.  Operators feel, justifiably so, that they do not affect airworthiness and are costly to repair so nothing is done.  In a pre purchase they can be written up as a discrepancy (not airworthy), but an installed system on the equipment list and will have to be operable.  The same holds true of galley equipment.  Any collared circuit breakers or inoperable lights or switches will have to work.  

Be sure to check water drains and lav area for any signs of leaks or staining.  Pay particular attention to lavatory areas above and below the floor.  One of the biggest stop signs in a pre purchase is to find evidence of blue fluid in any area no matter how minimal.  If possible, take time prior to inspections to remove all stains and address any leaks no matter how minor.  

Cosmetic issues such as frayed carpets and worn leather or fabric will not need to be addressed, however, it is a good idea to have things cleaned and detailed prior to input.  Facilities will write up some cosmetic issues and although they will not be required repairs they detract from the overall impression of the aircraft.  

Prior to input it is also a good idea to determine what will be sent to the pre purchase with the aircraft and what is personal loose equipment that will be removed.  A good rule of thumb to consider – anything listed in the weight and balance equipment list such as life rafts, life vests, head sets and portable breathing equipment should be left on board (with paper work) unless special arrangements have been made in the contract.  Items such as Medaire kits, umbrellas, blankets, china and crystal can be removed.  If an operator has a Medaire subscription and the kit it is removed there will most likely be a discrepancy written for lack of a first aid kit.  A minimal one should be added prior to input.  It is a good idea to check tags and certification along with placards for all hand held fire extinguishers.  Along with that all original placards for evacuation, seat placement and door and cabinet operations should be checked and must agree with the original STC or certification of the interior regardless of 91 or 135 certifications.  Any cabin equipment operational manuals should be made available to facility personnel so things can be accurately checked for operation.  I see many discrepancies written for equipment operation that are in error due to the lack understanding on the part of the maintenance person.  The prevailing thought here is to keep the discrepancy list to a minimum, anything written up right or wrong must be dealt with by the facility to be cleared in the eyes of the buyer.

Pre-Purchase Planning, Part 1

This is the first in a series of blog posts regarding pre-purchase inspection planning.  These are, however, good ideas for all owners and departments to watch for throughout the life of your ownership.  Each post will focus on a different part of the aircraft.


Start with a complete external aircraft walk around by maintenance personnel looking for small areas of missing paint, small dents and scratches, even if previously known (pay particular attention to all leading edges, lower surfaces of flaps from runway debris, and also the area around the baggage door).  If they do not have engineering dispositions already these will at the very least be written up and require engineering judgment during the pre-purchase inspection.  Also pay attention to any leaks from any area of any type of fluid (the biggest concerns here are blue fluid from lav area and hydraulic leaks) and any polished surface for corrosion (all surfaces should be polished just prior to input) as any pitted area will be a major concern.  Check engine inlets and fan blades for anything out of the ordinary.  Also all windows and windshields should be checked for scratches or delamination.  

For anything found during this inspection it would be best to address in house as minimally as possible for example touch up paint areas, polish or remove corrosion, investigate, repair and remove evidence of leaks.  Thought could be given at this time to evaluation of dents or scratches, larger areas unfortunately will require some sort of historical evidence as to how the dent occurred.  Any old notes or photographs from incidents (even minor) that you have should be assembled to help tell the story to a prospective buyer.  These are much easier to explain to a buyer with historical data, engineering support and a log entry than to be a surprise on the discrepancy list.  No matter how small they will probably be found and written up.  With the right steps they quickly become a non event.  

At this time it is also good to check maintenance manual requirements for all external placards and markings required by Part 91 certification.  If they are missing or faded and illegible they are much easier replaced in house than at a service center.  Other items such as tires should be checked for wear and cuts in the tread.  If it is certainly out of limits then it would be best to change, if it is close consideration could be given to leaving it.  A tire changed at a service center can cause added exposure to wheel issues which probably would not be dealt with.  Also be sure   that all lights are operable.  Maintenance Manual Limits will be applied to any issue found.  Wheel well areas should be looked over and the same law applied, any leaks or damaged areas investigated, repaired and cleaned up.   Things such as rusty bolts or hardware will most likely be written up.  Usually they will be dressed out by the service center, but sometimes this can require hardware replacement, spending a little time to dress the area and apply touch up paint can prevent that requirement.

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