CJI Town Hall raises questions on pre-buy inspections and fractional

Questions about the availability of pre-buy inspection space and the potential reimbursement of members on fractional plans and other programmes were highlighted by Lee Rohde, President and founder of Essex Aviation at Corporate Jet Investor’s Town Hall online meeting yesterday.

“The availability of pre-buy inspection space at facilities is one of the biggest factors that’s going to come into play very quickly,” Rohde told hundreds of delegates at the meeting. One client planned to move the C-Inspection of their Dassault Falcon 7X, due at the beginning of next year, to this year while little travel is taking place.

Also, it was more difficult to find a facility to take on a C-Inspection, as it is a large programme of work, said Rohde. “We are certainly seeing that service centres are very busy with a lot of activity, so starting soon is important.”

Also, restrictions, related to Covid-19, enforced by service centres, was frustrating the completion of aircraft transactions. Some facilities deny access to all but employees – meaning when a crew delivers an aircraft to a facility they are met on the apron or ramp and not allowed to enter the building.

‘Limitations on people working on transactions’

Some facilities demand a six-day quarantine for people who arrive at their centres by commercial flights – requiring visitors to either fly in privately or drive. “That’s going to put certain limitations on people working on transactions and trying to get through the normal due diligence process,” he said.

Rohde also revealed several clients were in discussion with fractional plan providers about the prospect of reimbursing unused flight hours. “We have several clients who have not gone anywhere near their fractional share since February or March and have accumulated unused flight hours,” he said.

“So, there’s been discussions with the providers about how these unused hours are going to be handled.” During normal times, un-flown hours would be lost.

Similar questions will be asked by owners who are on power-for-the-hour programmes. “Many of them have not done their annual hours and clearly are not going to come near that utilisation,” he said.

‘Expect some sort of pay out’

Every year several of Essex Aviation’s owners know they are not likely to reach their contracted level of utilisation and “expect some sort of pay out”. “But if you are potentially flying only 20% of the hours that you were supposed to fly, there are going to be significant numbers that people are not going to be too happy to address,” Rohde warned.

Meanwhile, Stephen Kelly, Global AVX’s global sales director, told delegates the company planned to hold its first auction on November 12th. The global auction site for business and commercial aviation launched in late April, offering brokers, leasing companies, liquidators, airlines, individuals and corporations, a dedicated aircraft auction and listing platform.

The free access one-hour Town Hall, sponsored by Los Angeles-based law firm Aerlex Law Group, is available to watch here.

Lee Rohde