Covid-19 and why now is the time to buy November 2020

COVID -19 AND WHY NOW IS THE TIME TO BUY

The Latest White Paper From SunStar Jets, Has Just Been Released...

While we all try to live with Covid-19 around us, we have to realize that at least for the near future this will be the new normal, and we simply have to adapt and move on with business, taking the necessary safety precautions of wearing a mask and social distancing , some might think it’s time to hold back on making those expensive purchases, such as a yacht or private jet, but in reality now is actually the time to buy those yachts and aircraft.

It’s a Buyer’s Market: Due to tax cuts which have lowered the acquisition costs of an aircraft many companies and high net worth individuals have taken advantage of this to either acquire their first aircraft or upgrade their existing aircraft.
Abundant Inventory: Presently there are ample supplies of aircraft, for example there are 29 Bombardier Challenger 300’s, 153 Cessna Citation 525’s, 28 Dassault Falcon 900’s, 53 Gulfstream G550’s to name but a few.

Sellers Take Cover: Many owners are downsizing and knowing that the market is flooded are pricing their aircraft well under the forecasted pricing for 2020, and even then, many are incredibly open to negotiate down even further.

ADS-B Upgrades: Most of us knew years ago that ADS-B was going to be needed yet many owners kept putting it off and now rather than spend the money they have decided to simply sell their aircraft.

Commercial Airlines and Covid 19: As airlines struggle, they have cut employees and routes making it even more difficult to get close to a meeting as they streamline and leave some regional airports void of any commercial connecting flights.

Low Fuel Costs: Thanks to lower fuel costs typically the largest single operating cost line item, the operating costs of a private jet have declined, and that combined with the fact newer jets are becoming more fuel efficient keeps the everyday costs of ownership way down..

Older Might be Better: As I approach 65 in 2021 my opinion might be a little bias on this one, but maybe older is better, for years many people have steered away from older aircraft, but you can buy an older jet, refurbish, update the avionics and have virtually the same identical features as a more modern jet, and save millions.

So, what do you need to know about buying a private jet?
One of the most common mistakes in purchasing an aircraft is to buy impulsively without fully considering the effects of your decision. Take the time to analyze your requirements carefully and be realistic. Consider the typical flight loading, trip distance and conditions of flight, then compare aircraft. To avoid the trap of buying more than you need or can use, ask yourself if you really need all the fancy bells and whistles. If possible, rent the type of aircraft you are interested in to get a feel for how well it will meet your requirements.

Did you know the major factors that affect resale value, generally speaking are:
Engine Hours — perhaps the most common influence on resale value. The closer an engine is to its recommended time between overhaul (TBO), the less its value. Equally important is a record of consistent use coupled with a good maintenance program. Regular use helps keep seals and other engine components lubricated and in good shape.

Installed Equipment — such as avionics, air conditioning, deicing gear, and interior equipment. The big item here is usually avionics that can easily double the value of some older aircraft. Also, older equipment is generally more expensive to maintain.

Airworthiness Directives —ADs are issued by the FAA for safety reasons and are a fact of life for most every aircraft. Once issued, owners are required to comply with the AD within the time period allotted. It is important to look at the AD history of an aircraft. Check the nature of the ADs and whether they are recurring or a one-time compliance. Make sure the logbooks show compliance with all applicable ADs. You can search for ADs on the FAA website or you can have a list prepared by an aircraft title and search company..

Damage History — major repairs can affect the value of an aircraft significantly but may be hard to pin down. A damage history will decrease the value of an aircraft, depending on the type of accident, nature of the damage and the degree to which major components have been involved. Any aircraft with a damage history should be closely scrutinized to make sure it has been properly repaired in accordance with the applicable FAA regulations, and manufacturer’s directives.

Paint/Interior — used on occasion to give "tired" aircraft a quick facelift. Check new paint jobs carefully for evidence of corrosion under the surface. Interior items should be checked for proper fit and condition. Done properly, both items enhance the value of the aircraft.

Be careful of the terminology used to describe engine condition. A top overhaul involves the repair of engine components outside of the crankcase. A major overhaul involves the complete disassembly, inspection, repair, and reassembly of an engine to specified limits. If an engine has had a top or major overhaul, the logbooks must still show the total time on the engine, if known, and its prior maintenance history.

A "zero-time" engine is one that has been overhauled to factory new limits by the original manufacturer and is issued a new logbook without previous operating history. As a general rule, an aircraft with a "zero-time" engine has more value than the same aircraft with an overhauled engine.

It is always a good idea to fly the aircraft before you make your final decision. During the flight, carefully check all equipment and systems to determine if they are fully functioning.

Before buying, have a mechanic you trust give the aircraft a thorough pre-buy inspection and provide you with a written report of its condition. A pre-buy inspection should include a borescope of the engines and any other inspections necessary to determine the condition of the aircraft. In addition to a mechanical inspection, the aircraft logbooks and other records should be carefully reviewed for such things as FAA Form 337 (Report of Major Repair or Alteration), AD compliance, the status of service bulletins and letters, and aircraft/component serial numbers. Ideally, the mechanic you select to do the inspection should have experience and be familiar with the problems that may be encountered on that type of aircraft.

Part of your pre-buy inspection should include an analysis of the spare parts market. Difficulty in acquiring spare parts can cost you a lot of time and money, and ultimately risk grounding your aircraft.

Make sure the following documents are available and in proper order for the aircraft: Airworthiness certificate, engine and airframe logbooks, aircraft equipment list, weight and balance data, placards, and FAA-approved aircraft flight manual or owner's handbook. Missing documents, pages or entries from aircraft logbooks may cause significant problems for the purchaser and reduce the value of the aircraft.

Seek the help of an experienced aviation underwriter when determining what coverage, you need. Check on hull rates before you buy so you will not be surprised. Some aircraft are insurable only at extremely high rates because of age or other factors. Avoid the trap of either over-insuring or under-insuring. Each has its unique problems that can be handled by securing the proper amount of coverage appropriate to the risk. An experienced underwriter or agent will be knowledgeable about any minimum insurance requirements that may be mandatory in your state. When shopping for insurance compare coverage, not just premium cost. Check on the reputation of any insurance company you intend to do business with. Ask for a sample policy and read it carefully so you can compare features.

Determine whether you will need to register your aircraft with the state. Some states have registration requirements and impose a fee based on aircraft type, age, value, or weight. In some instances, this fee is in lieu of personal property taxes.

Determine what state sales or use tax might apply to your purchase. Always consult an aviation tax consultant.

Visually inspect the aircraft prior to taking possession to assure yourself that no damage has occurred since the pre-buy inspection and that all contract conditions have been fulfilled. Also, make sure the necessary documents as required are transferred with the aircraft at the time of sale.

Have the seller execute a Bill of Sale and make sure that the seller signs his or her name, in ink, as it appeared on the previous Bill of Sale.

Execute an Aircraft Registration Application, and submit this, along with the Bill of Sale and the recording fee, to the FAA.

Your application for aircraft registration must include the typed or printed name of each signer in the signature block. FAA will return any applications that do not include the printed or typed name of the signer.

The pink copy of your Registration should be retained and placed in the aircraft as a temporary registration certificate. It is valid for flight within the United States for 90 days. At the same time, submit any necessary state registration forms and fees to the appropriate state office.

So far, we have mentioned items regarding buying an aircraft, but on the other side of the coin there is the owner/seller, we have not forgotten you, if you want to sell or trade in.

I want to sell: Do not panic, even in a slow market you can still get a good price for your aircraft, just follow a few good tips to get the most ROI for your aircraft
Sensible Makeovers Before You Sell Your Jet

Today’s buyers want aircraft already outfitted to meet future avionic mandates. Upgrades, however, require significant investment on the part of their present owners, and some scheduled down-time to install. Simpler, shorter lead-time upgrades tend to find favor among many buyers.

Of the four basic categories of upgrade (cockpit, engine, exterior and interior), the one with arguably the most flexibility is the interior.

Interior upgrades come in a variety of forms, from a complete interior refurbishment to updates focused on improving the cosmetics. The goal should be to make the interior look and smell like new.

Upholstery takes a lot of wear and tear; after all it is where the owners spend most of their time.

For the prospective seller, there are a multitude of opportunities to increase the aircraft's ramp appeal, while focusing on some of the simpler, lower-cost options for renewing or refreshing the interior.

Reupholstering seats, for example, requires relatively little downtime compared to other more-invasive jobs such as a full-interior makeover. With advance planning and coordination, renewing the seating upholstery can fit into the time window of an annual inspection or longer term “C” or “D” Check.

By selecting more common materials, you’ll find them at a lower cost than customized items, while giving your airplane a pleasant cabin environment that will likely increase the aircraft’s appeal to a wider pool of prospective buyers.

At the same time as you consider upholstery renewal you may also want to replace the carpeting, neutralizing it from a customized interior for the purpose of achieving a sale.

Conversely, combining the replacement of carpeting and upholstery together can open up the option to change the interior look altogether.

The shine in your newly refurbished cabin will owe much to the buckles, trim and woodwork. While renewing the appearance of upholstery and carpeting, it makes sense to consider giving equal treatment to related hardware.

Seat belts and buckles get as much wear as the upholstery, and they are relatively simple and inexpensive to replace, the same goes for wood-finish inlays, metal finished trim work, and side panels in the cabin.

Even if your airplane has been refurbished relatively recently, you should consider hiring a detailing crew to give the entire interior a deep cleaning prior to placing it on the market.

One sticking point for some operators involves the more constrained options of fabrics, leathers, and carpets for aircraft use. Always remember that fabrics, leathers, and carpeting approved for aircraft use under Part 23 or Part 25 must meet FAA / EASA burn standards for the type certificate in use.

Finally, while the interior appointments may get the most use, and the most attention, never forget that first impressions start with first viewing. A deep cleaning, waxing, and polishing of the exterior can make old paint look newer.
Of course, new paint is always an option, but a full blown repaint typically takes a few weeks.

A deep cleaning of the paint, polishing of stainless steel and polished aluminum surfaces can render an old paint job to look like new.

If the trim colors are faded or dated but the base color is in decent shape, a change in trim-colors design can help make an old paint livery look more contemporary. Often the new trim colors can be applied without the removal of control surfaces.

Who really pays: Finally, what about those broker fees?

Why are there rarely issues with real estate and yachts about paying a fee to a broker, the bottom line is the buyer always pays in the long run anyway, even if you think you are not paying a penny in fees, believe me the seller is paying if you are not, and that deal you thought you had for your aircraft purchase may have been less if you had control of the fees from the very beginning.

Your attorney gets paid by the hour for services rendered so if you ask a broker to find you an aircraft, why should you not pay him for his services, and that way you know up front what you are paying?

Even though SunStar Jets are not brokers, we are acquisition specialists and typically work and are paid by our client buyers and are rarely on the other side of selling aircraft.

We are an avid supporter of trying to push for certification of brokers, to be more in line with real estate agents / brokers, with one subtle difference, we believe whoever you are working for should pay a fee, in the same manner as an attorney.
The rates for our services are simple straightforward and 100% transparent
Final Purchase Price Fee
$0 - $4.99M USD 4%
$5M - 11.99M USD 3.5%
$12M - $19.99M USD 2.5%
$20M - $24.99M USD 2%
$25M - $39.99M USD 1.75%
$40M USD + 1.5%
Does Not Include:
Travel (Ground Transportation / Air Transportation)
Travel Day Charges @ $1500 Per Day, Per Crew Member
Perdiem @ $150 Per Day, Per Crew member
Administration Fees @ $150 Per Hour
Lease Arrangement Fee: If required upon the lease of an Interim Aircraft during the term of an Agreement the Buyer / Lessee shall pay to the Agent a (“Lease Arrangement Fee”) equal to one hundred thousand US dollars ($100,000 USD), for each Aircraft lease agreement.
It’s not just about buying an aircraft, after all it is far more complex than buying a car or even a house.
What We Do:
Our Procedural Plan
Day 1 through 10
i) Signing of our Aircraft Procurement Agreement
ii) Completion of a KYC
iii) Validation of proof of funds
iv) Attorney account opening with an Aviation Attorney
v) Escrow opening
vi) $1M refundable deposit per aircraft paid to Escrow (one account per aircraft as closings typically occur at different times)
vii) Aircraft interim wet lease (If required) organized with crew (Delivery approximately 7-10 days after a lease agreement has been signed and the required deposits received by owner).
viii) Consult an aviation tax attorney

Day 11 through Day 30
i) A selection of aircraft will be presented to you
ii) Viewings will be set up
iii) Letters of Intent (LOI) will be produced and presented to each seller and negotiated
iv) Once the LOI has been accepted we will then start on the Aircraft Purchase Agreement (APA)
v) Arrangements will be made and completed for all pre-buy inspections
vi) Pre-buy inspection to be completed (to include borescope, and corrosion inspection, etc)
vii) We will assure that your transaction meets international import and export FAA / EASA requirements (if needed)
viii) Management Agreement signed (applicable only if SunStar Jets, Inc. will be managing the aircraft)
Day 31 through Day 75/90 days
i) Indoctrination fee for each aircraft to be paid to SunStar Jets (applicable only if SunStar Jets, Inc. will be managing the aircraft)
ii) Bank accounts for each aircraft will be opened and deposits made into each account (operating costs) (applicable only if SunStar Jets, Inc. will be managing the aircraft)
iii) Indoctrination of aircraft into SunStar Jets system begins (applicable only if SunStar Jets, Inc. will be managing the aircraft)
iv) Plan your aircraft operating structure to comply with FAA and, or EASA regulations (applicable only if SunStar Jets, Inc. will be managing the aircraft)
v) Crew would be chosen for all aircraft (applicable only if SunStar Jets, Inc. will be managing the aircraft)
vi) Crew indoctrination & any required training completed (applicable only if SunStar Jets, Inc. will be managing the aircraft)
vii) Fuel Cards / Aircraft Safety / Aircraft Credit Cards, etc will be authorized and issued (applicable only if SunStar Jets, Inc. will be managing the aircraft)
viii) Crew housing arranged (if applicable) (applicable only if SunStar Jets, Inc. will be managing the aircraft)
ix) Crew transportation arranged (applicable only if SunStar Jets, Inc. will be managing the aircraft)
x) Aircraft handling arranged at base (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xi) Aircraft Navigation fees arranged and account set-up (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xii) Aircraft maintenance program set-up (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xiii) All required equipment would be purchased for each aircraft (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xiv) MedAire account set up for aircraft along with purchase of Tempus IC units for each aircraft (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xv) Aircraft and crew insurance arranged and purchased (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xvi) Accounting set up for each aircraft to allow for monthly billing (applicable only if SunStar Jets, Inc. will be managing the aircraft)
xvii) De-registration and re-registration of aircraft with FAA New registration painted on aircraft
xviii) SPV’s if needed would be set-up
xix) Final balance of aircraft purchase to be placed in Escrow ready for closing
xx) Aircraft Purchase Agreements (APA) will be signed, and SunStar Jets aircraft procurement fees released and paid
xxi) Delivery acceptance agreement signed & Escrow funds released to seller
xxii) Ferry flights arranged for aircraft
xxiii) Each aircraft will be delivered to you under our “White Glove” delivery service which starts 48 hours prior to final delivery
xxiv) In the event of a helicopter purchase, if needed we will arrange and oversee the shipment of the helicopter to the Country required

Ongoing:
Under our management program all operating expenses are paid directly out of the bank account set-up for each aircraft and on a monthly basis you will receive an invoice for the monthly expenses along with a current bank statement, after which the invoice should be paid by wire transfer into the bank account set-up for each aircraft (so that a minimum balance is always held on account).
When a maintenance item is due for each aircraft you will be notified in advance of the slot date, and approximate amount of each maintenance procedure, after which that amount should be deposited into that aircraft’s bank account so that funds are available immediately once the maintenance items have been completed, by the service center.

All travel arrangements and scheduling will be made through the chief pilot who will liaise through our office in Florida (For US registered aircraft)
In general, it should take between 60-90 days to have the aircraft purchased and delivered with crew, once we have everything in place, and Escrow opened
We will normally start sending you aircraft to review within 48 hours after the Escrow deposit has been placed with Escrow, as most owners require both Proof of Funds (POF) and confirmation that Escrow has been opened prior to releasing the required aircraft records to us for review before presenting any aircraft to you.
One of the most important items that is sometimes overlooked when buying an aircraft are the tax implications, and for that we suggest that every potential buyer consults a professional aviation tax attorney / tax consultant prior to the purchase of an aircraft.

We hope this information has been helpful and informative.
The SunStar Jets team looks forward to working with you in the near future.

Website: www.sunstarjets.com
Email: info@sunstarjets.com

1822 Wiley Post Trail,
Spruce Creek Airport
Port Orange, FL 32128, USA.

Website: www.sunstarjets.com

Info@sunstarjets.com

Contact: Geoff Andrews (Managing Partner) 386-2136-0476

At SunStar Jets we offer a wide array of “Customized Aviation Solutions”, for private and commercial jet buyers, and ongoing aircraft asset management.

With offices located at Spruce Creek Airport, Florida / Helendale, California / (Partner Office) located at Tampa International Airport, Florida and a global aviation network, we are well positioned to identify and offer the very best “Customized Aviation Solutions”, tailor made to fit our client’s needs.

SERVICES INCLUDE:
Business and Private Jet Aircraft Acquisitions
Helicopter Acquisitions
Commercial Aircraft Acquisitions
Passenger Aircraft Charter
Worldwide Cargo Charter
Private Jet Aircraft Management (FAR) Part 91 / 135
Aircraft Ferry Flights (Buyer Clients Only)
Aircrew Placement Service (Management Clients Only)
Jet Aircraft Pre-Buy Inspections (Buyer Clients Only)
Aviation Legal Services
Jet Aircraft Interior Refurbishment & Custom Design
Aircraft Painting and Custom Livery Design
Aircraft Maintenance Programs (Buyer & Management Clients Only)
Fuel Discounts (Buyer & Management Clients Only)
Insurance Discounts (Buyer & Management Clients Only)
Aviation Tax Referral Services

This release was published on openPR.