Buying a Private Jet step-by-step for first-timers

It’s easy to make million-dollar mistakes buying a private jet if you don’t know what you are doing and you don’ have the right team. Here’s what you need to know before you make an offer

A recent Town Hall by Corporate Jet Investor with private jet aircraft sales executives revealed a stunning data point.

First-time buyers who rushed to buy private jets to escape COVID-19 are already putting them up for sale. The pros say this is mostly because they didn’t know what to do.

The newbies didn’t know the game. In fact, they didn’t have a game plan.

And, in some cases, they didn’t have a team.

That’s right, buying a private jet is something you shouldn’t try to do with a click of your mouse on the internet.

The process of finding the right jet and then making sure everything is in order can take up to a year.

Many used aircraft that are on the market are still there for a reason.

Used private jets can cost from under $500,000 to over $50 million.

What seems like a great purchase price might come with millions of dollars in necessary maintenance and upgrades behind the curtain.

Panelists at the Town Hall say management companies and flight crews often downplay the costs of owning. M

ore than that, first-time buyers often make mistakes by not putting together a team of pros, from aviation-experienced lawyers to tax specialists to title specialists and, of course, a trusted broker.

Here’s a winning game plan to ensure you get things right – and avoid expensive surprises.

40 Steps To Buy A Private Jet

Below are 40 steps Corporate Jet Investor, as part of its masterclass series, has identified key steps that are part of buying a private jet:

1. Choose your broker/dealer/transaction adviser. They should easily save you more money than their fee, and the same is true for a specialist aviation lawyer

2. Select an aircraft to match your needs/view aircraft

Making an offer on your Private Jet

3. Make an offer/agree Letter of Intent (long-form vs short-form, standard versus bespoke)

4. Legal counsel review transaction structure and assess tax issues

5. Deposit placed in escrow (negotiate terms of release)

6. Buyer’s lawyer/buyer negotiates finance term sheet with financiers

7. Buyer’s lawyer conducts due diligence on the title, searches for liens, etc

8. Start negotiating the Aircraft Purchase Agreement and who pays what

9. Aircraft Purchase Agreement signed

Inspecting your Private Jet

10. Log book review by buyer’s technical team, check back-to-birth records

11. Appraisal for finance (if required)

12. Test flight/re-location flight – who is paying for this in Aircraft Purchase Agreement

13. Pre-purchase inspection

14. Finance documents reviewed

15. Sale document drafting starts

16. Tax advisers determine the structure and importation route (if required)

Registration and Aircraft Management

17. Decision on aircraft registration, ownership structure (may require specialist counsel)

18. Choose an operator if needed

19. Legal opinions on different jurisdictions requested

20. Seller rectifies discrepancies from pre-purchase inspection/negotiates changes or buyers walks away

21. Buyer reserves registration number

22. Export certificates, certificate of airworthiness

23. Final documentation review

24. Assignment of Maintenance Plans

Closing on your Private Jet

25. Final closing points agreed

26. Insurance arranged

27. Liens and discharges

28. Money wired to escrow by financier/buyer

29. Ferry flight

30. Tax ruling opinions issued (depending on jurisdiction)

31. Seller de-registers aircraft

32. Closing call

33. Signing

34. Escrow agent receives proof of de-registration

35. Agent files bill of sale, registration application

36. Liens filed with the International registry (Cape Town)

37. Registration – in U.S. Federal Aviation Administration issues flight wire

38. Importation of aircraft (if required)

39. Miscellaneous bills settled – satellite communications, maintenance programs

40. Protect asset value – hangar, engine covers, etc. – ready for when the aircraft is sold

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