Aircraft Transaction Masterclass

September 10th & 11th | Surrey

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A very interesting two days covering a number of topics. Great networking opportunities! Would recommend this course to those who are both experienced and new to the industry.

Martyn Fiddler Aviation

 

A unique two-day residential course for anyone looking to become an aircraft dealmaker. Using a mixture of expert presentations and interactive case studies the Aircraft Transaction Masterclass covers all aspects involved with buying, selling and financing an aircraft.

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The two-day Masterclass covers:

Typical steps in an aircraft transaction

  1. Choose your broker/dealer/transaction adviser- they should easily save you more money than their fee. The same is true for a specialist aviation lawyer.
  2. Select an aircraft to match your needs/view aircraft
  3. Make an offer/agree Letter of Intent (long form vs short-form, standard versus bespoke)
    Legal counsel review transaction structure and assess tax issues

4. Deposit placed in escrow (negotiate terms of release)

5. Buyer’s lawyer/buyer negotiates finance term sheet with financiers

6. Buyer’s lawyer conducts due diligence on title, searches for liens etc. Start negotiating the Aircraft Purchase Agreement and who pays what Aircraft Purchase Agreement signed

  1. Log book review by buyer’s technical team, check back-to-birth records
  2. Appraisal for finance (if required)
  3. Test flight/re-location flight – who is paying for this in Aircraft Purchase Agreement
  4. Pre-purchase inspection
  5. Finance documents reviewed
  6. Sale document drafting starts
  7. Tax advisers determine structure and importation route (if required)
  8. Decision on aircraft registration, ownership structure (may require specialist counsel)
  9. Choose operator if needed
  10. Legal opinions on different jurisdictions requested
  11. Seller rectifies discrepancies from pre-purchase inspection/negotiates changes or buyers walks away
  12. Buyer reserves registration number
  13. Export certificates, certificate of airworthiness
  14. Final documentation review
  15. Assignment of Maintenance Plans
  16. Final closing points agreed
  17. Insurance arranged
  18. Liens and discharges
  19. Money wired to escrow by financier/buyer
  20. Ferry flight
  21. Tax ruling opinions issued (depending on jurisdiction)
  22. Seller de-registers aircraft
  23. Closing call
  24. Signing
  25. Escrow agent receive proof of de-registration
  26. Agent files bill of sale, registration application
  27. Liens filed with International registry (Cape Town)
  28. Registration – in US FAA issues flight wire
  29. Importation of aircraft (if required)
  30. Miscellaneous bills settled – satellite communications, maintenance programmes
  31. Protect asset value – hangar, engine covers etc – ready for when the aircraft is sold

Agenda

Day One

Buying & Selling Aircraft 

Introduction to the course 

How good brokers get deals closed 

Why aircraft transactions are a team sport 

Choosing the right team 
Keeping all the parts moving 
Paying cash versus financing 

The first questions: How will you use the aircraft?  

Where will you use it? Who will use it? 

09.50 Anatomy of a transaction 
Negotiating the letter of intent and the purchase agreement 
Pushing through pre-purchase inspections 
Exporting and Importing aircraft 
Delivering and closing 

Cleaning up – not finished on closing day  

New versus old  

The differences between selling new and used aircraft 
Are there still different buyers for each? 
Selling one series versus selling them all

Key legal aspects of the sales process 
Essential elements of the LOI 
Long form versus short form 
Negotiating the deposit and escrow 
The aircraft sale and purchase agreement  
Getting deals to completion  

Case study: Negotiating a letter of intent 

The joy of the pre-purchase inspection 
Airworthy vs unairworthy 
Who pays for what? 
The C-word: What causes corrosion and why is it an issue? 

Importing aircraft into the EU, VAT and other issues 
Aircraft – the tax universe 

Customs duties 
Key VAT Concepts 
Main structuring options 
Temporary admission relief 
Leasing options 

Choosing an aircraft registry 
The key factors to consider: 

The Aircraft 

Cost and Service 

Use and Operation 

Ownership Structure 
Financing 

Political environment 

What is an aircraft worth? 
The different approaches for valuing aircraft 
What affects valuations 

Day Two

Day two: Aircraft Finance 

The rules of financing aircraft 
Business jet finance versus commercial aircraft finance 

How institutions choose their sweet-spot 

Competing with other asset classes 
Minimising risk 

Legal considerations for aircraft debt and lease finance 
Structuring loan and lease agreements 
Personal and corporate Guarantees 
Aircraft Mortgages and security Assignments 

Mitigating risks: Maintenance programmes  
What do you need to think about? 
What should you be tracking? 
What do maintenance programmes protect? 
How maintenance affects asset values 

Mitigating risks: Using Tripartite agreements 
The importance of the manager relationship 
Sub-leases and quad-partite agreements 
Key provisions and negotiation points 
Case study: Enforcing a tripartite agreement 

Key insurance issues 
What is insurance?  

How aviation insurance works 

What covers are available to what risks?  

Insurance as a financing tool 

Repossessing aircraft 
Identifying potential risks 
Managing risks 
The importance of planning 
Case study: War gaming a hostile repossession 

Corporate Jet Investor