Jay Mesinger

Questions & Answers

October, 2006:

Q: I am involved in an aircraft transition, selling my light jet for a mid-size. The cost of the replacement aircraft seems to be going up right before my eyes, and the aircraft I am trying to sell is getting very little market activity. Could this really be happening? I thought the whole market is "on fire!"

A: This must be very frustrating, but even in today's robust market environment there are segments that still languish. I, too, am involved in a few transitions that are unbalanced, as you suggest. Without knowing the particular types of planes involved in your contemplated transition, it is hard to be market specific, but I would bet, however, that the relinquished aircraft is either older than the replacement or is an aircraft from a category that has a very narrow market segment (meaning few aircraft in that model were produced). The newer aircraft today are, as you mentioned, mostly enjoying a robust market environment. The Citation Excel and the Citation Sovereign are a couple that come to mind because of their short supply and high demand. In fact, in these two categories, the pre-owned planes are selling for more than what the original purchaser paid new. The real question is what to do about it. Do you take the position that it is better to pull from the market and wait until the market cools? My answer would be absolutely not! This market is not a seller's or a buyer's market and it's very efficient right now. Yes, some planes are selling quicker for a higher price and some are selling slower for less, but if you feel committed to the need for the transition, stay in the process. A slower market environment will not positively affect the difference you will pay in the transition. It may, in fact, make the spread greater. In a cool market, the plane you are trying to sell may even go down at a faster rate than the one you are trying to buy.

Q: I am buying a pre-owned aircraft and it's my first purchase. What should I do for a pre-buy inspection?

A: Just the fact that you ask the question tells me that you are on the right track. I always suggest that unless the aircraft is very new and under full warranty, it should undergo the most invasive set of inspections that the individual manufacturers recommend. Most service centers today offer a simple technical survey, (which is often not much more than a glorified pre-flight), all the way to a chapter 5 maintenance manual invasive inspection. For instance, in a Citation X, I always suggest an AH inspection with several add-ons like log book research to 135 standards, (including a life limited components tag check), engine and APU boroscopes, and window checks. Rather than use this answer to define the scope, I would rather just point you to the corresponding manufacturer's individual facilities. Here a trained technical representative can asses the most logical inspection based on the current maintenance tracking report of the specific aircraft, as well as the specific aircraft's age and proximity to recent or near term maintenance events. The bottom line is that this opportunity to inspect is the only time most buyers get to reject an aircraft. Be thorough in your planning and understanding of both what is and what is not going to be looked at during the proposed inspection. Accept the plane with caution, reject with confidence.


- Jay Mesinger