View Full Version : What is an AOC worth?
Two_dogs
12th Nov 2010, 01:29
Gday All,
I know of a ME Charter / Air-work AOC for sale and was wondeing the true value of such an asset. Said AOC has approx 12 months till the next re-issue and has a handfull of common types authorised.
How would purchasing an existing AOC compare to an initial AOC application, considering time taken, ops manual production, CASA costs etc?
kalavo
12th Nov 2010, 04:36
I'll give you $10 for it.
bizzybody
12th Nov 2010, 04:49
The last Aoc I submit for someone 2 different twins on it airwork / charter was estimated by casa as costing 8000. 6 weeks later ops manual approved all right to go and casa gave a refund of 1300.
Costs don't depend on how good and clear your ops manual is because every FOI has a different opinion as to what a good ops manual is. I can submit 2 identical ops manual to 2 different inspectors and get 2 different answers. After a while you get to remember what inspectors like to see what.
People selling a company with an aoc attached seem to think there is some kind of premium because it's ready to go. The problem is there are too many people outthere still paying stupid amount for them.
Horatio Leafblower
12th Nov 2010, 05:54
"At cost" to produce an AOC - assuming you could "buy" the component parts - I would expect you to pay:
$8000 for CASA approval
$5000 for someone else to author your manuals
$1200 for accounting and legals to set up a Pty Ltd company.
...and of course, you can't sell "an AOC". You CAN sell a company which owns an AOC.
If the company has all its key personnel in place (CP, CFI and HAAMC) then the CASA change-over should be painless or, in fact, non-existent.
The manual authoring bit is getting more complex all the time, with SMS and DAMP now required. All good if you can write it yourself (or steal someone else's) but beware the first audit if it is "off the shelf".
A mature company with extensively documented administrative procedures etc will be worth more.
Existing business/goodwill is only worth something if the business will continue in its present location.
Good luck
tail wheel
12th Nov 2010, 07:23
You can't buy an AOC. You can buy the shares in a company to which CASA has issued an AOC.
The company is worth the surplus of assets as per the balance sheet: Equity + retained earnings + assets - liabilities = surplus of assets.
Caveat emptor!
An AOC may have a good will value if it comes with approved personnel, Chief Pilot etc, and if the AOC authorises use of the aircraft, aircraft types and types of operation you intend to operate. It may then be worth what you are prepared to pay, which is not necessarily what the AOC holder asks.
Keep in mind that if you acquire an AOC as an asset, it will become an instant liability if CASA decide to send you one of their favourite Friday afternoon Show Cause faxes.
A basic AOC with no approved personnel and not authorising operation of the aircraft, or types of operation you intend to operate, is a piece of A4 paper only, which at law remains the property of the Commonwealth.
Last I looked, A4 paper was around $7.00 for a 500 sheet ream at Woolworths or the Newsagents.
...and of course, you can't sell "an AOC". You CAN sell a company which owns an AOC.
The above is correct. Also be wary of AOC issued in the name of a person, i.e. "Joe Blogs" trading as "Blogs Aviation". This type of AOC cannot be traded.
It is just a piece of paper.
simsam
13th Nov 2010, 01:25
A quick question related to this, these days you need SMS and DAMP system, but can you still legally operate with only a Chief Pilot and one or two line pilots, or will this create conflict of interests?
Simsam
AussieNick
13th Nov 2010, 01:40
Simsam: i can off the top of my head count 5 companies that do just that and have been for some time :ok:
longrass
13th Nov 2010, 09:42
PM Sent two dogs
these days you need SMS and DAMP system
Where is it legislated for a charter or AWK AOC holder to have a SMS?
To my knowledge it is only a requirement for RPT operations.
Horatio Leafblower
14th Nov 2010, 14:13
Where is it legislated for a charter or AWK AOC holder to have a SMS?
...it's not now, but you won't have to wait too long.
Many of my clients and prospective clients require it, whether legislation does or not. :=
Many of my clients and prospective clients require it, whether legislation does or not.
Like the ag operator who had to implement a SMS for one days work seeding before an "Aviation Auditor" would recommend his company for the work.
I still would like to know how one implements a SMS into a single pilot operation.
werbil
15th Nov 2010, 09:30
it's not now, but you won't have to wait too long.
One of the reasons I cancelled my AOC back in the late 90s (wasn't using it at the time and had no need in the immediate future) was the impending requirement to implement a SMS.
flying-spike
15th Nov 2010, 09:55
Seeing as the requirement for CA0 82.3 and CAO 82.5 operators only came in in 2009 I hope you invested the returns on "cancelling" your AOC were put into fortune telling or did Y2K put you off?