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Old 8th Apr 2013, 17:04
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Best of the old iron

I am selling my company to another entity but have now been asked to retain some of my team and act as consultants for a fixed period after the sale. Purchaser has two offices 700 and 1400 miles from our location. Purchaser has a flight department but can not transport us on their company planes due to new rules about appropriate use they were pressured in to creating by their board during the downturn. They will agree to cover all direct operating costs if we travel on our own aircraft. They were adamant that we must own and operate the aircraft outright; leases, charters, fractionals, hourly maintenance prepays can not be paid by them. I suspect they intend to bury our travel costs somewhere in their travel or aviation budgets, as long we meet their stipulations.

Given this proposed arrangement I am looking for options on 8 passenger aircraft of sufficient range with the lowest combination of acquistion and maintenance costs. Direct operating costs can be pretty much ignored except I will have to absorb the risk of running engines that are not on a maintenance agreement. My intial research came up with three candidates: Westwind II, Hawker 700A, Sabreliner 65 all have very low acquistion costs along with active support and maintenance operations. It looks to be a total buyers market on all three. Conversely I am certain any of the three will be tough to impossible to resell in 2020 when this agreement ends, but with purchase costs as low as they are the total dollars at risk even if the aircraft has to be scrapped, at that point, are tolerable. An A&P said something in jest that maybe isn't crazy when asked how to ensure reliability on an old jet he said "buy two". Maybe we should buy two of whatever we decide on fully intending to cannibalize one unit to support the other? We can readily buy a vacant hangar to support our operations so space to store the aircraft and or parts will not be an issue. In fact as desperate as people appear to be to get planes back in those hangars we will probably be able to resell for substantially more in 2020 than the current low asking prices.
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Old 8th Apr 2013, 18:40
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in 2020 when this agreement ends,
A 7 year consulting handover, incredible!

Last edited by Grenville Fortescue; 8th Apr 2013 at 21:51. Reason: removing a stray 1
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Old 8th Apr 2013, 18:59
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7 years that is... realistic.

On the plane side.. buy two... you will need a special form (8130 or equivalent) in order to be able to cannibalize a plane in order to fix the other one, along with some life limits on these parts.

Fractional.. you own a part of the plane, as far as IRS and FAA are concerned, you are a co-owner, all accounting is in phase with this status.

Budget...you are by-passing the budget thing...and the schedule of operations ( daily, weekly monthly, more ? Less ?)

Most probably, YOUR accounting will introduce a company in between you and your plane in order to firewall some liabilities, i will be surprised if it was not the case with your buyer's planes. Therefore their requests will be somewhat flawed...

This forum is definitely NOT the place for a detailed advice, as this kind of stuff is sold for ten of thousands in various fees. As a courtesy, i can only suggest to meet a proper and reputable aviation company in your area that will lead you to a proper opt-out scenario in 7 years...With the financing associated with it.. Operating a plane is quite simple, the financing of it is another challenge..
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Old 8th Apr 2013, 19:58
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Newly formed consulting entity will own the aircraft. Terms appear to be driven by what the buyer can push through their own internal audit committee and not by what the IRS or the FAA think is an appropriate ownership structure. The current market prices for the three birds mentioned are representative of the purchase price arena I am considering. No financing will be necessary at these price points and the opt out strategy is not an issue, which is substantially why I have chosen this section of the market. Tens of thousands for opinions on the flight characteristics, and maintenance costs for some 30 year old business jets seems kind of steep. If these is a better forum on which to post a request for this type of information I am definitely taking direction.

Last edited by Trimup; 8th Apr 2013 at 20:18.
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Old 8th Apr 2013, 20:27
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As you don't have to worry about the DOC while flying it, get an aircraft where the engines have recently been done so you may well get to the end of the agreement before you have to replace them. A Hawker 700 would fit the bill nicely, so would a lear 55. The hourly cost is irrelevant for you and airframes of that age have already fully depreciated.

Have a walk through some of the types you have in mind and see what cabin suits you the best. I reckon you are in the States so don't discount the 601, you will appreciate the cabin when you get to year 2 of your travels. You can get decent 601's for only slightly more than your 700, if you find one on an engine program then it becomes a no brainer as your cost will be fixed for your whole 7 year agreement.

The key is to cover your incidentals, that should be a bigger priority than your residual value or engine overhaul cost, get most if not all your costs fixed at least you know what you are getting yourself into.

Here is a good example, 2.87Mn, engines on JSSI, APU on MSP, even the avionics are covered, your next 5 year is do in 2016, 1988 BOMBARDIER/CHALLENGER 601-3A Jet Aircraft For Sale At Controller.com

The other party pays for your DOC, your costs are fixed and you will be able to flog it again in 7 years for close to what you pay for it as long as you keep it tidy.

I appreciate that the 601 is dearer compared to a 700 or sabreliner, but you will come to appreciate the cabin after your 20th trip, and you will get most if not all your money back in the end. You also will have no surprises a all your cost is fixed.

Of course you haven't given us a budget, but if you are looking at a 700 or Sabreliner at the low end of the market, you can get them for 500k, the thing will eat you alive in 2-3 years. The engines on a 700 will need overhauling every 4000 hours, unlike the CFM's (they are on condition), again it all depends on how many trips you are making over those 7 years, you may well end up having to do your engines twice on a 700, don't know as you haven't been very clear in your mission profile.

We are all happy to help you here, but we need quite a bit more info out of you before any of us can make a good judgment, now we are just shooting blanks in the dark....

Last edited by cldrvr; 8th Apr 2013 at 20:40.
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Old 8th Apr 2013, 21:54
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Operation costs

Out of the three aircraft you have given as candidates I would choose the Westwind. Although you haven't given enough information to really make an informed decision. You mention an 8 passenger airplane. Does that mean you will put 8 pax day in and day out, or just want the capability to hold 8 pax? What kind of airports are you operating out of? Will you have a MX person on staff? The WW is fairly small for 8 pax on a regular basis. However, excluding O2 bottle and some avionics checks the WW has no calendar inspections. Purchase one on MSP and your engines are covered. If I remember right the inspection intervals were 200A, 400B, 600A, and 800C. Park it and fly it when you need to. The HS125 and the Sabre both have calendar inspections that have to be complied with.
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Old 8th Apr 2013, 22:25
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All mission points in the lower 48.

Rarely will more than six people be with for business use.

Eight passengers is for my personal use to destinations of KEGE and KHII.

I am talking with an A&P who used to split his time between two corporate flight departments but one stopped flying and sold both their aircraft during the downturn. He is interested in putting something together. He has previously supported Hawker 400/700/850, various Citations, Westwind I, LJ45, and an Astra.

I am thinking about 500 hours per year declining 10% per year then tapering dramatically after year four.

Too much opportunity cost for me at this point to tie up excess capital in this aircraft even if I might get it all back in at some point.

If I buy any engine coverage at all it will be a catastrophic unscheduled plan.

Hence the reason I floated the idea of buying two of something.

What about an out of the box solution like buy a nice example of one of the three I mentioned, without MSP, $500K should cover it. Then run it until it incurrs a 50% of acquisition expense then buy another one and cannibalize the first one for parts. Wash, rinse, repeat as needed.

As I understand it Westwinds IIs are inspect by time not calendar so if the flight schedule varies per year that could be an advantage.

Is their anything besides the three I mentioned that I should be considering?

Last edited by Trimup; 9th Apr 2013 at 00:38.
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Old 9th Apr 2013, 07:54
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If you decide to buy two and use one for spares, break it up immediately on purchase and get EVERYTHING through any inspections/inhibition requirements.

Leaving an aircraft parked and taking bits off on an as needed basis is a recipe for finding the same problems your flyable aeroplane has. Also a lot of what appear to be silly little items (seals etc) often have shelf lives that may not last out your seven years, but because they have aviation part numbers will cost a lot more than you may expect.

Get an expert in who you trust, and listen intently to him, like you he is a specialist in one area, he won't be cheap, but if he's good he'll tell what you have to hear, not want you want to hear.

We run 17 aircraft here (Europe) and always tell new customers that. They may not like what we tell them, but with no sugar coating they get a rapid and firm grasp on reality. Our customers tend to stay for the long term because of the trust we have in each other, and the openness with which we deal with them.

Good luck

VH
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Old 9th Apr 2013, 08:28
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verticalhold - quite right.

Anyone seriously considering going into aircraft ownership and operating would recruit a professional adviser/consultant to map out the way ahead in the clearest of terms.

Never cease to be amazed by those (not suggesting the OP is among them) who feel they can just "wing it" when it comes to such things.

Quality professional advice from a reputable organisation which is accountable will save you in the long run.
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Old 9th Apr 2013, 08:56
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Yep $5000 spent now could save you millions!
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Old 9th Apr 2013, 10:48
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If you really want the 8 seats and you don't want to spend money then your best choice can be for the Sabre 65.

We have one here in Sweden and is still on American register.



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Old 9th Apr 2013, 16:38
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That is a nice unit and I bet the owner would have hard a time saying no to $500K no hassle, immediate sale. The specific disadvantage Sabreliner represents for me is the obvious choice for my local maintenance has no Sabreliner experience.
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Old 9th Apr 2013, 16:43
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I am so far outside the normal with my proposed solution that very few industry insiders are going to be able to look past their "this is what everyone always does" blinders. You should hear the ones I have talked to when I say I don't want MSP'ed engines. It is like they came out of one of those telecomm adds on TV.

We all bundle.
but WE ALL BUNDLE!!!!
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Old 9th Apr 2013, 17:00
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"Yep $5000 spent now could save you millions!"

Impossible. "Millions" implies multiple million dollar increments so lets be conservative and say, three. I would have to buy and reduce entirely to zero value, six discrete $500K Westwind II aircraft to even have total capital expenditures of $3M. So how exactly is an "adviser/broker/consultant" with his hand out going to save me millions?

Jet broker = realtor ... in a better suit.
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Old 9th Apr 2013, 17:02
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"Quality professional advice from a reputable organisation which is accountable will save you in the long run."

Agreed! The question is merely if the advice costs more or less than the savings, which varies depending upon specific circumstances.
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Old 9th Apr 2013, 17:11
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With eight passengers, they will be cramped in both the Westwind II and the Sabre 65. The Hawker 700 has the biggest cabin for passenger comfort, but the worse performance at airports such as Eagle in the summer time.

As for the range with all three aircraft with eight passengers, all three should be capable of a range of 1,400 miles, from low elevation airports, not airports such as EGE in the summer.

So do keep that in mind. I have considerable experience operating both the Westwind II and the Saber 65 in and out of Aspen, plus a few times out of EGE when weather prevented us from landing in Aspen.

With full fuel in both the Westwind II and the Sabre 65*, in the one's I operated, you can only carry four adult passengers with normal baggage. I'm not familiar with the Hawker 700, so you need to find somebody that has operated one from high altitude airports.

Now, just a suggestion, have you considered a used straight Falcon 50? The prices on these aircraft have dropped considerably in the last year or so, in fact serial number 10, which is in the same age group of the Westwind II, 65 and 700, is on the market today for less than 2 million USD. Also, the 50 will have a resale value in 2020, where the others will not, except most likely for scrap.

Here is a link to a website that has everything from BBJs and Boeing 757s to Citation 500s for sale. You will be able to check prices on this site. It is updated every Tuesday and Thursday every week.

Jets For Sale

On page 2 is the Falcon 50, serial number 10, that has an asking price of $1.9 million USD.

My recommendation would be to check this site out, then find a good aircraft broker and proceed from there.

Now just a couple of other things.

Before purchasing a used aircraft, any used aircraft, have a neutral maintenance facility do a very in dept pre-purchase inspection. Your broker should have you do this and should know two or three facilities that can do a competent inspection. Some of the issues that the inspection will find will be cosmetic, things like chipped paint, worn interiors, etc. Ignore these things, with the exception of bargaining for a lower price. Serious maintenance issue must be addressed, unless the seller makes huge allowances in the price, force the seller to address any and all maintenance issues. If the seller will not, move on.

The other item is, have a title search done on the aircraft, including any possible issues with Homeland Security. As the aircraft you are considering buying, may have once been involved in some type of illegal activity. Not that you would be in any trouble purchasing the aircraft, but that this could cause problems with customs when returning to the US from other countries.

A good aircraft broker should tell you all that I've mentioned above, it not, find another broker.

Good luck and have a good time looking.


* If the Saber 65 has an APU, only three adult passengers can be carried with a full fuel load. But, leave off 200 pounds of fuel, you're safe to go.
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Old 9th Apr 2013, 22:23
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Excellent information thank you. I am trying to figure out where one would be going from KEGE that would require a full fuel load. Most locations that far from there are wet. I make it 700 miles to LA, 800 to Houston, 900 miles to Seattle, 1500 miles to NY, 1600 miles to Miami and 1700 miles to Bangor.
My usual mission from KEGE would be only 750 miles so full seats should still be fine even on a high density altitude day.
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Old 9th Apr 2013, 23:46
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Hands Down...The B-727...Yes it's big....Yes it's a fuel guzzler...Yes it needs 3 Flight Crew and 2 F/A's....

The range is more than enough to cross the pond or Pacific in style...(with a VIP conversion)...Aux tanks underneath, The classic bedroom with a large private toilet, a bidet, and shower, etc...

The best part, B-727 VIP A/C are on the market NOW....and for not a lot of $$$...

If you were to amortize a Used 727...throw in the fuel and crew costs, and compare this with the acquistion cost...I'm sure you would come out ahead...

One great point about the 3 crew concept...the F/E should be and A&P which will help you out if you find yourself in certain situations....

Good Luck in your search...
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Old 10th Apr 2013, 13:16
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"If you decide to buy two and use one for spares, break it up immediately on purchase and get EVERYTHING through any inspections/inhibition requirements.

Leaving an aircraft parked and taking bits off on an as needed basis is a recipe for finding the same problems your flyable aeroplane has."

Good advice, if I hire a half time A&P to support my one flying aircraft he could use his excess time to disassemble the donor. I intend to have the prepurchase inspections done by one of the specialists in whatever type I chose. I was thinking of asking for their opinion on the weakest systems to know where to start disassembly.
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Old 10th Apr 2013, 13:20
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"The best part, B-727 VIP A/C are on the market NOW....and for not a lot of $$$..."

You mean like this 1967 BOEING 727-100 EXECUTIVE Jet Aircraft For Sale At Controller.com

$700K??? but I bet the MX would be stupendous.
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