When buying a pre-owned jet, an important component is the condition of the interior. Interior colours and design are highly subjective, and the style of a jet may not suit the buyer’s taste. Furthermore, aircraft are often chartered or heavily used, and that wear and tear can reflect in its condition.
Understandably, a buyer wants the jet they are going to buy to look nice and be in good condition, but also ready to fly at the time they take delivery of it. They usually do not want to purchase the aircraft to then put it down for another one or two months to undergo changes to the interior.
Buyers will often suggest doing interior work during the Pre-Purchase Inspection (PPI). This most commonly gets proposed when an intensive PPI is taking place, often in conjunction with a major scheduled inspection that requires the interior to be removed. Many buyers assume doing the interior work during a PPI is an easy solution. While it can be done, it poses quite a few issues for the both parties that must be considered.
The crux of the issues that arise with changing an interior during the PPI is the “What ifs”.
What if the buyer defaults on the contract?
First and foremost, many sellers will not want a buyer to make any modifications to their aircraft while they continue to own it. If the buyer agrees to pay for the interior changes during the inspection, but defaults on the transaction contract in some way, then the seller could be stuck with an interior they did not choose and possibly with the interior bill if the buyer walks away. They now face the prospect of owning a jet with an interior they do not like – hardly enticing for most sellers. Many sellers, before considering such a request, will want to have some sort of guarantee that the plane will either A) be put back in the previous condition by the buyer, or B) that enough of a non-refundable deposit is in place in order to encourage a buyer’s performance in the transaction.
What if the seller defaults on the contract?
If a seller defaults on the contract and the buyer had agreed to pay for the interior change, then the question of ‘does the buyer get their money back?’ comes into play. It is extremely rare to see a transaction where the seller puts up a ‘good faith deposit’ to guarantee performance and many buyers are reluctant to invest into an aircraft where their only remedy is to pursue a non-compliant seller through the courts in an (often) international jurisdiction.
Some inexpensive or easily rectifiable interior work, such as re-dying seats, is often approved by the seller to be done during the Pre-Purchase Inspection as this is not a major change to the interior but simply sprucing up the current one. New carpet is also sometimes, but not frequently, deemed acceptable to do during a PPI because it is more easily changeable than other more labour-intensive interior components. We suggest keeping the old carpet in a condition that it can be replaced as well as leaving some funds aside to cover the costs of refitting the old carpet if the transaction falls apart for any reason. This will give the seller some comfort knowing that they are not tied down to the changes the buyer wants to make.
Larger changes get more complicated because of the time and money involved. New seat leather or woodwork will probably take longer than the Pre-Purchase Inspection will and prolong the transaction’s closing. Sellers most often want to make sure that a deal goes ahead in a timely manner and these time-consuming works often delay a closing and is unattractive to a seller.
Interior changes prior to closing can be risky and for the risk averse seller, they will likely refuse. But if everyone is in agreement with the risks and the contingencies have been properly planned for in case things go wrong, then it is a way to save time for the buyer and allow for the jet to be ready to fly in their desired condition after closing. As with all things, both sides need to weigh the pros and cons and, if possible, find a happy middle ground.