The process at a glance.
The purchase of an aircraft begins with the selection of the right type. The purchase decision is based on an in-depth analysis. The aircraft’s operational spectrum will be defined (e.g. operating region, route length, destinations, number of seats required, infrastructure available in the route network). Direct Operating Costs, Aircraft Servicing Costs, Indirect and System Overhead Costs of the eligible aircraft are weighed. Fleet and scale effects are determined and evaluated in relation to the target size of the (new) fleet. Synergies with existing aircraft and personnel are also determined. Marketing considerations may also play a role in the selection of the aircraft and are taken into account. An assessment of the required onboard equipment and any age restrictions to be taken into account are also carried out (in certain countries aircraft may only be operated up to a certain age, for example in Egypt the maximum age for commercially operated aircraft is 20 years). Ordering certain aircraft, such as of the Airbus A320 Family, may involve many years of waiting. If this is not an obstacle, contact is made with the aircraft manufacturer (OEM). If an aircraft is purchased from the manufacturer, the purchase is made according to the manufacturer’s process. This will be explained to you at the beginning of the negotiations.
If a used aircraft is to be purchased, a market sounding is carried out. GMP works together with renowned aircraft dealers and brokers and also has its own network to the asset management departments of various airlines. Used aircraft may also not be available at all or only at high prices. In the course of the Boeing 737MAX crisis, for example, almost none or only very expensive 737-800s were available. Some common methods of aircraft procurement are leasing, lease-to-purchase or purchase. Certain airplanes are offered only in the leasing or to the purchase. If there is a concrete purchase interest, a Letter Of Intent (LOI) is usually concluded and a certain amount is paid into an escrow account to secure the purchase intention. When buying used aircraft, a pre-purchase inspection (PPI) is carried out on the aircraft, which may include one or more flights. The cost of the PPI is usually borne by the buyer of the aircraft. The Aircraft Purchase Agreement (APA) is then or simultaneously negotiated. Serious aircraft dealers have a clear and transparent purchase process, similar to the aircraft manufacturers, which is presented to you right at the beginning of the negotiations. GMP has a network of international law firms that are experienced in the aircraft trade and that advise you together with us on the drafting and evaluation of contracts. We also advise you on structuring the financing of your aircraft and, if necessary, act as intermediaries for leasing companies and aircraft financiers. On the way to a used aircraft there are various stumbling blocks that had to be avoided at all costs. These include a poor technical condition, an incomplete history or the non-existence of equipment for which a legal regulation comes into force within the period of use. Not quite as obvious, but no less important, is the consideration of the transfer of any warranty claims, the consideration of certain tax circumstances or the avoidance of risks that may arise from raising and transferring money.
When leasing aircraft, it is also important to avoid certain stumbling blocks. For example, when taking over a used aircraft, in the context of which the technical condition of the aircraft is meticulously recorded, at least one flight takes place. There are also some contractual stumbling blocks that must be avoided at all costs. This requires experience. With GMP you have access to this experience, avoid risks and get the best out of your company. In addition to support in the procurement of aircraft, we also support you in selling your aircraft or returning it to the leasing company. We will also act on your behalf if you do not wish your company’s name to appear when aircraft purchases and sales are initiated.
