From the time of signing a Letter of Intent to closing, a transaction normally takes 2 to 2 and a half months. That timing may shock those that have never been involved in a pre-owned transaction before, but the reason is that jets are complicated machines and more importantly, they are complicated assets. As a result, there are a number of different parties involved on both the buyer and seller’s sides. Each side will have a lawyer and most likely a financier, and more times than not they will each have an operator. The contract must be negotiated and structured to satisfy the needs of all parties. This process takes time. People get distracted, or go on holiday, or are working on other projects and reading, amending, and approving transaction documents takes time.
Another event that takes time is the Pre-Purchase Inspection, which usually takes longer than estimated. The Maintenance Facility never knows what they will find when they start an inspection and once they have found issues, they need to fix them and find parts for the repair. Sometimes the facility has limited man power to work on an aircraft. All of this can create small (or sometimes large) delays.
Doing the deal correctly will take time and will require these different parties to be involved.
The solution is not to figure out how to cut out these people, because they are necessary and key for both buyer and seller, but it does mean you should enter a pre-owned transaction with the proper expectations. To accomplish a transaction in the best way that meets buyer’s requirements and desires and the seller’s requirements and desires, it will take time.
*Bonus Note: THE QUICK DEAL
Does the “Quick Deal” exist? Well yes it does, but it usually means the buyer is forgoing the Pre-Purchase Inspection or some other sort of due diligence. Some buyers say they can offer a quick deal, but it’s usually to lure a seller into a commitment and then not perform on their quick deal promise. The true Quick Deal is definitely a rarity.
Blogs are written from real world experience by Colibri Aircraft’s individuals. If you have any questions or comments about the topic of this blog, please feel free to contact our team at enquiries@colibriaircraft.com