ASA Frequently Asked Questions About Buying and Selling Jet and Turboprop Aircraft
Questions About Brokers
Q: Do I have to have a broker to buy or sell my plane?
A: The short answer is no, you do not have to have a broker to buy or sell a plane. But the more important question is, should you? And that depends heavily on your own experience and comfort level with buying or selling aircraft. It may surprise you to learn that we sometimes recommend people don’t use a broker, even us. If you have the experience and skills to handle it yourself, then it may be a wise decision. it’s important not to make this decision be about money, because very often an experienced broker can actually save you money, even when you factor in his or her fees. Or at the very least, a good broker will help you make sure you don’t end up spending more than you intended from unknown or unaddressed items. Be up front with your potential broker and talk to him or her about the fee. He or she should not be reluctant to disclose everything about their fee to you. If they are reluctant, that’s a good sign you should keep looking for another broker.
Q: Can ASA help me buy or sell my plane?
A: Absolutely. ASA is here to help you fulfill your dream of flying but our day job is buying and selling aircraft. If you’re thinking about buying or selling a plane, feel free to contact us. We have a lot of useful information we can provide and we won’t make you sign a contract just to talk to us. After we talk and provide you with some useful tools and information, then you can decide if you’d like us to represent you. If not, no hard feelings and you’re still welcome to the advice and information.
Q: What licensing or registration do brokers have to go through?
A: So we might as well introduce the concept of brokers vs dealers to you here. Brokers do not have any type of registration or licensing with any government agency, with the possible exception of a business license or such at the local level. Dealers, on the other hand, are registered with the FAA and are given the ability to fly aircraft on their Dealer’s registration certification, allowing them to avoid sales tax on aircraft in inventory. Neither is better or worse and are often two sides of the same coin. But since no licensing, bonding or certification is required for either type, it’s critically important that you find a broker (or dealer) that you can trust.
Q: Do brokers have to be pilots in order to sell planes?
A: They do not. But we’ve often thought that they should be. Honestly, we got into aviation because we love flying, we love planes. We would argue that someone who is a broker without a pilot’s license is really only in it for the money. At ASA, we all have pilot’s licenses because we all love to fly. Brokering aircraft just allows us to make a living on something we love to do.
Q: Does ASA only work with jets and turboprops or will you help me with my piston-engine plane?
A: ASA will absolutely help you with your piston. We specialize in jets and turboprops but the information we provide for those types of aircraft is very relevant to piston aircraft. Our videos and advice all apply and we’ll even be happy to broker a plane for you. We care deeply about helping people fulfill their dream of flying, so if you need assistance, just reach out. That’s what we’re here for.
Q: How old is too old when it comes to Total Time?
A: Short answer, never! There are some amazing old planes out there with some incredibly high total times. As long as they have passed annual and are well cared for, total time doesn’t affect how much fun they are to fly. However, from a buying and selling perspective, you should keep in mind that higher time airframes tend to bring much less money. Buyers are worried about fatigue on the aircraft, cycle times, etc, and lots of times it’s just easier to buy a plane with less TT. A good rule of thumb is to think of aircraft total time the same way you do mileage on a car. If a car has over 100,000 miles on it, there may not be anything wrong with it. But chances are it’s not in as great a shape as one with only 20,000 miles on it. Same with planes, but the magic number for aircraft is 10,000 hours. This roughly equates to 100,000 miles on a car. Planes with over 10,000 hours on them are considered high-time airframes. A high time airframe can still be the right aircraft for you, but you need to carefully weigh that plane’s TT against what you plan to do with it.
Q: How big of a deal is damage history?
A: Well, it depends on the circumstances. Generally speaking, any damage history at all is going to lower the resale value of the aircraft. If you have two planes that are equals in every way, but one of them has damage history, the one with the damage history will be worth less than the one without, sometimes substantially less. So if you are buying an aircraft with the intention of selling it later and getting your money back out of it, damage history can be a huge deal and something you want to avoid at all costs. On the other hand, if you are purchasing a plane for your own enjoyment, an aircraft with properly repaired and documented damage history may be a way of getting into a bigger or better aircraft than you would typically be able to afford. Just recognize that damage history never goes away, and if you buy a plane at a discounted rate because of damage history, expect to sell it at a discounted rate as well. If you’re considering a plane with damage history, give us a call. We’d be happy to give you our insight on some things you might want to consider.
Q: I keep hearing about 135, what is that?
A: Part 135 of the Federal Aviation Regulations governs the operation of Air Charter Certificates. When an owner of a Jet or Turboprop talks about Part 135, or putting his or her plane on a 135 Certificate, they are talking about placing the aircraft on a 135 Charter Certificate in order to make money on the plane. Typically, you would place your aircraft and pilots on the 135 Certificate and pay the Certificate owner a monthly management fee and they in turn will find charters for your aircraft and pay you a certain amount of money per flight hour. Charter can be incredibly complicated, but it definitely has its benefits. If this is something you are interested in, give us a call and we’ll get all your questions answered.
Q: Can I really fly my plane for “free” by putting it to work on a Part 135 Charter Certificate?
A: The answer is, maybe. You absolutely can earn money putting the right plane on a 135 Certificate. The question of whether or not you can make enough to fly it for free has a lot to do with the aircraft’s cost of operation as well as its overall expenses. There is a “sweet spot” where you can actually fly for free. Here’s how it works. Let’s say that you buy a snazzy jet that charters out for $2500 an hour. Let’s say that it costs, for easy math, $2000 an hour to fly it. Well, if you charter the plane for 4 hours, you’ve made enough to cover 1 hour of “free” flight time for yourself, right? Sort of. You’ve covered the aircraft’s operating cost, but you haven’t necessarily covered it’s fixed costs, which include everything from pilot salaries to insurance to the monthly payment for the plane. However, if you have an aircraft that is new enough to be very efficient, but inexpensive enough to not have huge holding costs, but desirable enough to keep it popular on the charter certificate, then yes. You can make enough money to cover all of the aircraft’s expenses and “bank” 5 or 10 hours a month for you to use for free. There are only a handful of aircraft that fit in this sweet spot though, so work carefully with your broker and your Part 135 operator to ensure you get a plane that will do what you want.
Q: If I want to put my plane on a 135 Certificate, do I have to use the 135 Operator as my broker?
A: You do not. And, in fact, we would argue that you don’t want to. A good broker is going to help you get the very best plane for you and your needs. A 135 Operator may be tempted to help you get a plane that is the very best for his or her Charter needs, and not necessarily the best for you. Most 135 Operators are very happy to add new aircraft to their certificate, even if they didn’t help you buy the plane. They still make their money off the charter and their management fee. So, unless you are very comfortable with the 135 Operator, it’s probably best to keep the Purchase and the Charter as two separate, distinct deals, and get the very best deal for you in both instances.
Don’t see your question addressed here? No worries! Email us and we’ll answer it straight away. We’ll be continually expanding this FAQ based on your feedback so send it our way!