Selling a business aircraft is a complex process, and the pre-purchase inspection (PPI) is one of the most critical phases. For a seller, navigating this part of the transaction can be nerve-wracking, as the outcome can significantly impact the deal’s final price and timeline. By preparing thoroughly, communicating transparently, and managing expectations, you can ensure the process goes as smoothly as possible.

PREPARATION: THE KEY TO A SMOOTH INSPECTION

Your goal as a seller is to minimize surprises. The best way to do this is to get ahead of the inspection.

• Conduct a pre-sale assessment: Hire a trusted and experienced IADA certified broker to perform a pre-sale inspection. This “mock PPI” allows you to discover and address any issues, major or minor, on your terms before the buyer’s team arrives.

• Organize all records: A buyer’s inspection begins with a meticulous review of your aircraft’s maintenance logbooks and documents. Ensure all records are complete, accurate, and properly organized. This includes all forms, Supplemental Type Certificates (STCs), Airworthiness Directives (ADs), and documentation related to damage history or repairs. A well-documented history demonstrates a high level of care and can protect the aircraft’s value.

• Confirm compliance: Verify that all applicable ADs and Mandatory Service Bulletins (SBs) have been complied with and properly documented. Missing or incomplete records can be a major red flag for buyers.

• Address cosmetic issues: A buyer’s inspection isn’t just about mechanics. Cosmetic condition, both inside and out, can influence negotiations. Fix any minor issues, like paint chips, scratches, or interior wear, to prevent them from becoming negotiation points.

COMMUNICATION AND NEGOTIATION DURING THE INSPECTION

The sales agreement, or Purchase Agreement, is the road map for the PPI. It’s vital that the terms are clear and agreed upon before the inspection begins.

• Define the scope upfront: The sales agreement should explicitly state the scope of the inspection, including who pays for the inspection and how discrepancies will be handled. This is a key area for your IADA certified brokers expertise.

• Understand the discrepancy report: The inspection facility will provide a detailed report of all findings. You and your IADA broker must carefully review this report and distinguish between “airworthy” discrepancies (safety-related, often the seller’s responsibility) and “non-airworthy” discrepancies (cosmetic or non-critical, often negotiable).

• Be prepared for negotiation: It is standard to expect some discrepancies to be found. How you respond to these findings will dictate the success of the negotiation.

• For airworthy discrepancies, be prepared to cover the cost of repairs as outlined in the sales agreement.

• For non-airworthy discrepancies, your IADA broker will help you negotiate a fair outcome. This could be a price adjustment or an agreement for the buyer to cover certain costs.

• Allow for Test Flights: An integral part of the PPI is a test flight to evaluate the aircraft’s performance and system operations. You should be prepared for this, and the sales agreement should specify who covers the crew and other expenses.

PARTNER WITH AN EXPERT AND TRUSTED IADA AIRCRAFT BROKER

Your broker is your most valuable asset during this phase.

• Managing the Process: They manage the complex logistics of the inspection, from coordinating with the facility to communicating with the buyer.

• Interpreting Findings: They have the technical knowledge to properly interpret the inspection report and understand the implications of any findings.

• Expert Negotiator: They can act as a buffer during negotiations and ensure your interests are protected, securing the best possible outcome for your business aircraft being sold.

By following these best practices, you can navigate the pre-purchase inspection with confidence and bring your business aircraft transaction to a successful closing.

At Holstein Aviation, our IADA certified professionals bring decades of transaction experience, real-time market intelligence and global reach. We guide our clients through every step of the process, ensuring confidence and clarity in today’s dynamic environment. If you’re preparing to sell your aircraft, Holstein Aviation is your trusted partner in business aviation.