Risky aircraft deals a two-pronged issue
Why aircraft buyers are purchasing aircraft at almost any price point and risk profile is a two-pronged issue, according to Paul Lange, founder, The Law Offices of Paul A. Lange.
The Connecticut-based lawyer is heading into what is traditionally the busiest time of year for aircraft transactions, however 2021 is proving even busier than usual. Lange tells CJI: “To paraphrase the Chinese proverb, we’re certainly living in interesting times.”
He continues: “The willingness to take larger risks is motivated by the lack of available aircraft supply. At the same time, pandemic-motivated behavioural changes increased demand for travel by private aircraft as compared to flying commercial. As a result, there is feverish interest in obtaining the desired aircraft at almost any price point and risk profile with buyers unwilling to lose a deal.”
Although it is probably expected, those taking the largest risks are people “least experienced in business aviation” –first time owners.
However, Lange said fleet operators are also taking increased risks based on the lack of availability of aircraft, “but the risks we’re seeing them take are more measured and calculated”.
Lange’s firm deals with a variety of legal aviation matters including regulatory topics, transactional and litigation. But due to the “frothiness” of the business aviation market “given a greater supply and demand imbalance than has existed at any time in history per industry pundits”, Lange said the focus remains largely on the transactional front. Working both on transactions and the “inevitable disputes that arise either post-closing or post deal failure”.