Do you need help buying your Jet?

Do you need help buying your next jet aircraft?  The answer is short and simple—YES.

This is often the single largest capital expenditure of a company.  It is an item that is not purchased on a regular basis, but only every few years or decade.

If you are buying a jet, you need someone who does multiple transactions on a regular basis and is “inside the ropes”.  An aviation manager or chief pilot simply does not have the time to be as good as a full time professional.  Your in-house counsel does not handle all of your legal work, your personal doctor will refer you to a specialist.  Your aircraft purchase team should be the same.  It should consist of your flight department, your legal counsel both inside and aviation specific, aviation tax specialists and an aviation purchase specialist.

My friends in the aircraft selling business will not like this, but you getting the best terms, conditions, and pricing is not their number one responsibility.  Aviation companies spend thousands of dollars on sales and negotiation training to get better prices, otherwise they would all adopt the one price, big box discount store model.

It does not matter whether it is a pre-owned sale, or a new shiny jet from a company you have done business with for years, the only person that is looking out for your interests are the ones paid by you directly.  Hawkeye Aircraft, as your buyer’s consultant, is your in-house expert with the transactional experience to insure the aircraft is selected at the best price, terms and conditions. 

We immerse ourselves into your company culture so we can represent you both professionally and ethically.  We provide you the information that you can’t find on the internet or without being in the day to day business.  The information that saves you money and reduces your risks.

Our Creed

Integrity--Our word is our bond.—PERIOD

Knowledgeable--Know the products and the market

Add Value--Value added above and beyond your normal expectations

Customer Focused--Our customers are our partners.

Professional-- Someone you want to be associated with.

Call us or email us to discuss how we can assist you in your selection and purchase of your next jet.

Mike McCracken

Hawkeye Aircraft Acquisitions LLC

www.hawkeye-aircraft.com

info@hawkeye-aircraft.com

Office 727 796 0903

When is the Business Jet market going to get stronger?

When is the jet market going to get better is the $64 question and if you know the answer, you could make a fortune!  Everyone wants to know, is this the new normal?  I am sure you have read, as I have, the numerous reports that the turn around is next quarter or third quarter or?  Perhaps they should qualify with which next quarter!

It is perplexing as the reliable indicators are proving to be unreliable in this market.  The macro models do not seem to be working, that is why you need to look at your own micro model.

The micro question is what difference does it make to my operation?  What is the downside versus the possible upside or the risk/reward of a decision made today?

If you are buying, are you safe at the valuations?  If you are selling, are you leaving residual value on the table?  Is it worth delaying a few months to a couple of years to recoup value?

The answer is not simple and is different for each aircraft owner.  There is not a one size fits all or a herd mentality answer.

Does it make economic sense for you to spend money upgrading avionics for future compliance, safety, paint and interior when the real upcoming need is for a more capable and reliable aircraft?  Is it reasonable to make a change now before a possible upswing in values and leave hundreds of thousands on the table?  Have our missions changed enough or are there other factors that indicate we need to change?  Is what I leave on the table of residual value today offset by current values and more efficiency going forward?  Is supplemental lift a shorter term alterantive?

The answer takes research and a detailed analysis, similar to other business decisions you make when deploying your capital.  These are not emotional decisions, but practical fact driven decisions.  Fully understanding the current conditions and making model assumptions that are in line with the economics and planning for your company will help you make an informed decision.

This is the reason you need a partner like Hawkeye Aircraft Acquisitions to assist in preparing the models and analysis to help you make a solid business decision.

Mike McCracken

Hawkeye Aircraft Acquisitions LLC

www.hawkeye-aircraft.com

info@hawkeye-aircraft.com

Office 727 796 0903

New Jet or Used Jet?

For those who can afford a new jet, there is nothing quite like the experience of acquiring and operating a new jet plane.  Having sold predominately new planes for 26 of my over 30 years in aviation, I can attest to the many visible and some of the less visible benefits to the new jet.

I started this article with the comment “for those who can afford”.  This is perhaps one of the larger issues that often is misunderstood.  There are categories in any purchase that simply changes the parameters and results in influencing the purchase price.  Capital constraints and the need for a larger aircraft for your missions is an influencer.  There are others as well. 

However, for those who have the capital, the issues become more complex than the simple “I can buy a lot of maintenance for the extra capital, or upgrades” or whatever the comments are.  It is important to understand how the age of an aircraft can impact your reliability and availability limiting the available hours you can fly a particular aircraft.  How your mission profiles might dictate a more modern aircraft etc.

Since aircraft have long economic lives, you really don’t own a $50M asset as much as you rent it for the period of ownership.  Figuring the life cycle costs can definitely influence what constitutes the best value for your ownership requirements.  Looking at only one parameter is similar to the first day in statistics class, more people die in hospitals, therefore don’t go to a hospital because your chances of dying are much higher.  Looking carefully at all of the purchase and operating elements will allow you to make a better decision.

A good analysis will include an in-depth life cycle cost analysis and development of a strategic plan for acquisition and disposal.  It is an involved process and takes time with your finance and executive team.  Various scenarios need to be run similar to other business decisions.

Once a direction is agreed on, then a well thought out acquisition plan can be implemented making sure that you are getting the best value in the marketplace.  

Mike McCracken

Phone 727 796 0903

info@hawkeye-aircraft.com

www.hawkeye-aircraft.com

Out of Production Beechcraft Premier 1 and Premier 1A Used Prices

Hawker Beechcraft has received court approval to exit bankruptcy as a standalone company producing only prop aircraft as Beechcraft Corp.  The court has also allowed HBC to discontinue warranty and support programs for the Hawker 4000 and Beechcraft Premier I/IA.  What impact does the lack of warranty support and being out of production have on Premier aircraft?

There are slightly less than 300 Beechcraft Premier aircraft in service, of which approximately 60% are out of warranty or close to being out of warranty.  In many industries 300 units would be too small of a number to provide support.  However, in the aviation industry, with long economic lives for aircraft, this is a significant number of aircraft that will need parts and service.  As a result of bankruptcy many of the vendors will be released from their proprietary contracts with HBC and be allowed to sell and repair parts.  The biggest negative might be a pool of rotatables, however I suspect some maintenance providers will see value in inventorying those as well.

The market place quickly factored in the bad news of the Premier being out of production and the news HBC would not stand behind their warranty and support agreements.  Some of this is over-reaction since the engine and avionics package is modern and desirable in the light jet market.  JSSI has announced an option for Premier owners to help guarantee their operating costs.  Likely not to be inexpensive, operators will at least obtain the ability to forecast their operating costs.  However there are issues to operating a Premier that you don’t have with other competing aircraft.  Price will offset some of those and it appears the marketplace has adjusted prices accordingly.

What to do if you own a Premier?  I have two suggestions.  First, is to fly it and keep it as long as originally planned.  When the time comes to trade you won’t be shocked by the lower values and will understand that the market place can be cruel but there will be a market.  You may experience some parts issues however they should not be severe.  You will have gotten good transportation at a higher life cycle cost than planned but it still provided efficient transportation.  Second, is to bite the bullet with the lower values and take advantage of the weak overall market that exists for the replacement aircraft.  More than likely we will not see a big percentage increase in future Premier values, but we will see competing aircraft become more expensive.  You will soften the downside and help your future life cycle costs.

Hawkeye Aircraft Acquisitions has over 30 years of aviation experience and is an aviation consulting and acquisition firm.  Our product is the peace of mind of knowing you have made the most informed decision available.  Call or email to learn more about our services.

Mike McCracken

President

Hawkeye Aircraft Acquisitions LLC

727 796 0903

info@hawkeye-aircraft.com

www.hawkeye-aircraft.com

Out of Production Hawker 750/800XP/850XP & 900XP Used Prices

Hawker Beechcraft has received court approval to exit bankruptcy as a standalone company producing only prop aircraft as Beechcraft Corp.  How does being out of production affect Hawker jet aircraft? What potential impact will there be on service and second prices?

There are a large number of Hawker series aircraft in service around the globe.  This represents a captive market and provides the various vendors with an incentive to sell, produce, and maintain inventory on those parts.  HBC made very few components on these aircraft, with Airbus manufacturing the fuselage and wings.  Although Airbus might not be inclined to build those parts, there are various out-of-service aircraft that parts could be procured from.

Additionally, there are a large number of service providers around the world that have the technical expertise and capabilities to maintain the Hawker.  Bottom line is that support should not be an issue and there is always the possibility that someone will buy the Hawker production rights and even re-start production.

What about Hawker prices?  The market continues to factor in the worst case scenario and the result is depressed prices.  In my opinion, prices are a result of the suspended production and bankruptcy is already factored in.  The fluctuations moving forward will be the result of what the mid-size market as a class experience.  

Hawkeye Aircraft Acquisitions has over 16 years of Hawker experience.  Our product is the peace of mind of knowing you have made the most informed decision available.  Call or email to learn more about how we can provide assistance in your next aircraft transaction.

Mike McCracken

President

Hawkeye Aircraft Acquisitions LLC

727 796 0903

info@hawkeye-aircraft.com

www.hawkeye-aircraft.com