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FREQUENTLY ASKED QUESTIONS
WHY
USE AN ACQUISITION CONSULTANT LIKE
WILKE & ASSOCIATES?
They are basically
three professional ways to buy an aircraft:
#1. The Stocking
Aircraft Dealer The stocking aircraft dealer has an overhead that
is so great they have to make a large profit on each deal in order
to stay in business. That gross profit is generally 10 to 15% above
their purchase price. Also, when you call this company, they have
only one thing in mind, "selling you the aircraft they have
in inventory". The salesmen will do everything in their power
to convince you that their aircraft will fit your mission requirement
whether it does or not. Their loyalties are with their company,
not you.
#2. The Aircraft
Broker The aircraft broker is obligated to sell you the aircraft
that he has for sale on a listing contract with the owner of an
aircraft. He usually has a 90 or 120 days listing and will lose
the deal if he does not sell the aircraft within that time. He makes
his money from the seller. Again, the loyalties are with the company
and the aircraft owner, not you.
#3. The Acquisition Consultant We have only one thing in mind and
that is working for you to acquire the best possible aircraft that
will fit your needs for the best possible price. We spend the time
to get to know you and your company's transportation needs and which
aircraft would best fit your particular mission requirements. We
then look at the entire world market and every dealers inventory
for the best aircraft for the dollar that fits your budgetary requirements.
We work for a flat fee established up front and in writing with
you and your company. We do not take commissions from aircraft owners
or any dealers. Our loyalty and obligations are to you.
HOW
CAN YOU SAVE ME MONEY?
Generally we
can buy aircraft at wholesale prices or very close to it. By staying
on top of the world market and knowing where the very best buys
are for the dollar, we can always save you money. We have been buying
aircraft for 25 years and exclusively turbine aircraft for over
15 years.
HOW
DO YOU KNOW ABOUT ALL THE AIRCRAFT THAT ARE ON THE MARKET?
Corporate jets
acquisitions are the only thing that Wilke & Associates does
on a daily basis. We research all available market data by the top
research firms in the United States as well as our dealer and personal
contacts. Many times we know about the good deals before they are
ever advertised to the buying public.
HOW
CAN YOU SOMETIME ACQUIRE AN AIRCRAFT FOR US THAT IS A BETTER BUY
THAN A DEALERS?
Once an aircraft
gets into a dealer's inventory, the price has to go up. They are
paying interest & insurance as well as advertising, hangar,
employees and a host of other expenses. As a rule of thumb, you
can add 10 to 20% to the initial acquisition cost to get to their
selling price. Many times we are able to purchase aircraft directly
from the owner or motivated sellers.
WHY
ARE FOREIGN AIRCRAFT SOMETIME THE BEST DEALS?
Many times aircraft
become available on the market because of currency devaluations
in their country that is created by the economic conditions. Owners
will become very motivated to sell so they can take advantage of
the strong U.S. Dollar. In some cases, it means 300 to 400 percent
more dollars in their currency thus, they are able to sell their
aircraft at a very good price in U.S. Dollars.
WHY
USE A FACTORY AUTHORIZED SERVICE CENTER FOR THE FORMAL PRE-PURCHASE
INSPECTION?
An authorized
service center is generally more knowledgeable about that particular
type aircraft and is more qualified to find any problems that the
aircraft may have. Also, it carries a great deal of weight with
a prospective buyer when you are ready to sell it. In most cases,
the seller pays for all of the airworthiness squawks at the time
you are buying and every one you can find on the pre-purchase inspection
will save you just that much more on your future maintenance.
ARE
NOISE REQUIREMENTS A BIG ISSUE?
YES! Noise requirements
are a big issue. Most large cities, resorts and even many smaller
cities now require an aircraft to meet FAA Stage III noise requirements.
The hand writing is on the wall as we get closer and closer to the
time when most countries will require all corporate aircraft to
be Stage III compliant. Resale values for non-compliant aircraft
are dropping rapidly as a result of this.
WHAT
ABOUT HIGH TIME AIRCRAFT, ARE THEY SAFE?
Generally speaking,
higher time aircraft are safe as long as they have been properly
maintained in the right environment. The major problem with buying
a high time aircraft is the resale value and the ability to sell
it in a reasonable time frame. High time aircraft must be purchased
carefully and require the maximum amount of inspection in order
to reduce risk.
WHAT
ABOUT HOURLY OPERATIONAL COST?
Operating cost
is generally the most important consideration beyond the acquisition
cost. However, many times a high operational cost aircraft can be
purchased at a much lower price that will justify the acquisition.
If the annual hourly use is low, many times you can more than pay
for the high operating fees with money saved on the purchase price.
These options would be covered in the initial consultation with
Wilke & Associates.
CAN
YOU HELP US FIND PILOTS & MECHANICS?
Yes, through
our contacts acquired from many years in the business, we usually
do not have any problems finding pilots and mechanics. We know what
to look for in reliable personnel that are safe and qualified.
CAN YOU HELP US WITH NEW PAINT AND INTERIOR
IF WE DON'T LIKE THE EXISTING ONE?
We have contracted
for many paint and interiors for corporate jets in the past 25 years
and know where to get very high quality work at a reasonable price.
We will advise you on the advantages and disadvantages of fireblocking,
stripping procedures, down time required, performance contracts
and paint & interior designs.
IS
AIRCRAFT INSURANCE HARD TO FIND, EXPENSIVE?
The selection
of your flight crew and how you will be operating the aircraft are
generally the most important items that effect your insurance premiums.
Insurance is available and there are approximately six underwriters
of corporate aviation insurance. We can give you names of agents
that specialize in aviation insurance and know where the best premiums
are for your particular type of operation.
WHY
IS THE LOCATION OF OUR HOME BASE IMPORTANT IN THE SELECTION OF THE
AIRCRAFT WE PURCHASE?
You will want
your corporate aircraft to be able to operate out of the closest
and most convenient airport to your home or corporate offices. The
operational capabilities and performance of each aircraft is different.
The aircraft you select must be able to operate from the length
of the runways and at your airport's altitude and temperature. Conditions
effect how many people you can take with you on a trip and how far
you can go without refueling. We can give you the operational data
on most corporate jets and turbo-prop aircraft.
Also, if your
normal operational area is in the United States and your home base
is in the center of the country, then you could save money by purchasing
an aircraft with a range of 1500 nautical miles instead of one with
a greater range. The operational range of each aircraft is an important
consideration as your trip cost goes up a great deal if you have
to stop enroute just for fuel.
WHY USE AN ENGINE CONSULTANT WHEN YOU HAVE YOUR
ENGINES OVERHAULED OR HOT SECTIONED?
A good engine
consultant can save you a tremendous amount of money on your major
turbine engine maintenance. Just like any free enterprise business,
overhaul and hot section shops are in business to make as much money
as possible. If you have a professional consultant there representing
you when the engine is opened up and the decision is made to discard,
exchange or replace with new parts, it will always save you money.
Always!
IS
WHERE WE PURCHASE OUR AIRCRAFT PARTS IMPORTANT?
Yes, definitely.
A good aviation manager that knows where to shop for parts can come
close to paying his salary every year by knowing where to purchase
the parts for your aircraft and its engines. Manufacturers and dealers
make a lot of money each year in their parts department for a good
reason.
SHOULD
YOU HAVE YOUR OWN AIRCRAFT MECHANIC?
Every flight
department is different. The availability of a good outside maintenance
shop and how far you have to ferry the aircraft to the facility
makes the big difference. Generally you can pay for an in-house
mechanic that is F.A.A. qualified by having him perform most of
the smaller inspections and work off the daily squawks.
WHY USE A SERVICE CENTER FOR MAJOR MAINTENANCE
IF THEY ARE HIGHER PRICED?
We always recommend
that you take your aircraft to a factory authorized service center
for the larger inspection requirements. They generally have the
tools and talent to better perform these items. It will always make
you money on the resale value when the time comes to sell your aircraft
and it has their stamps and certifications in the aircraft and engine
records.
IS THIS A GOOD TIME TO PURCHASE AN AIRCRAFT?
Now is probably
the best time in the past five years to purchase your aircraft here
in the United States. Aircraft prices are the lowest since April,
1994 and seemed to have found the bottom. You can expect any good
jet or turbo-prop aircraft that you buy in the next six months to
increase dramatically in the next two to three years. "Well,
there we go again, predicting the stock market. Generally speaking,
as the stock market goes, so does corporate aircraft prices!"
CAN
YOU GIVE US A LIST OF EXPENSES WE SHOULD EXPECT IN THE PURCHASE
TRANSACTION?
Certainly, all
of the expected expenses will be outlined during our initial consultation.
We will outline all fees including escrow, pre-purchase inspection
and various other fees including post-purchase requirements of paint
and interior prices if needed.
HOW
CAN WE MAKE SURE WE HAVE GOOD TITLE?
We will always
use a good reputable title company that is bonded to handle the
title search, escrow monies, F.A.A. recordings and title insurance.
We have worked with several companies for many years and know who
to trust with these transactions.
WHAT
ABOUT BUYING AN AIRCRAFT WITH DAMAGE HISTORY?
We never recommend
buying a jet or turbo-prop aircraft with any in-motion damage history
or corrosion problems. Even though you can save money on your initial
investment, it generally cost you more money and headaches when
you decide to sell it.
WHY
ARE AIRCRAFT LOGS AND RECORDS SO IMPORTANT?
The only way
you have to show the history of an aircraft is from the airframe
and engine records. If an aircraft does not have good, consecutive
records it can cause problems with the Federal Aviation Agency as
well as problems when you get ready to resell the aircraft. We inspect
these on our initial inspection prior to sending the aircraft to
an authorized service center to be inspected again. If they are
ever lost or stolen, it can cost you 20 to 50% of the value of the
aircraft. Very important!
WHAT
IS MSP, JSSI, ESP AND ETC? IS IT IMPORTANT?
They are all
forms of turbine engine insurance plans. A company charges you a
fee every hour you put on your engines to take care of certain maintenance,
depending on the type and model of engines on your aircraft. The
insurance coverage can vary from a small percentage up to 100%.
The variance in the aircraft acquisition price can change accordingly
and could mean millions of dollars. We will cover the differences
with you and explain what each candidate aircraft may or may not
have.
CAN
YOU GIVE US A GOOD ESTIMATE ON OUR TOTAL EXPENSE PER HOUR? PER YEAR?
Through past
experience and the "Conklin and DeDecker Operational Cost Data,"
we will supply you with all of the latest operational expense figures.
This will be provided for your review prior to you making a decision
on the type of aircraft you want to purchase.
IS THERE TAX ADVANTAGES TO OWNING AN AIRCRAFT?
There have always
been good tax advantages to owning an aircraft. Recently there has
been some very good legislation passed that helps the new and used
aircraft buyer with advanced depreciation. We can provide you with
that information and also the names of aviation tax consultants.
There are also classes available each year for your accountants
to attend to insure that you are taking maximum advantage of the
system.
DO
WE NEED AN AIRCRAFT WITH THRUST REVERSERS?
This depends
on the type of aircraft that you are purchasing, runway length and
the environment in which you are using the aircraft. Every aircraft
is different in this regard and we can explain the differences to
you. Generally speaking if you are operating off of good long runways
they would not be required on most aircraft. On some aircraft with
slow approach speeds there is a deduction on the price if they have
them installed, instead of an increase in price. However, they can
save you maintenance on your brake system, especially on short runways.
When operating off of wet or icy runways they are sometime a great
advantage. ("Pilots like them, they make a lot of noise when
landing and they can make the first turn-off on the runway.")
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