Ask the Experts: Aviation
It takes experience to put together the kind of deal that works for everyone. That is true in all sorts of businesses, and it is particularly true in private aviation.
Those kind of deals where everybody wins are what Premier Group and Steven Allen, Jr. specializes in.
Steven Allen, Jr. knows where the trip-ups and snags are when it comes to aircraft. “First and foremost, owning any turbine size aircraft or larger is the equivalent to owning a second or third small business in and of itself. Make no mistake, the most expensive part of owning an aircraft is not the acquisition of it, the most expensive part of aircraft ownership is the operation and maintenance of that aircraft.
“Even when executed properly, aircraft ownership is quite costly. When executed incorrectly, aircraft ownership is short lived,” Steven says.
Doing it correctly takes the right team.
“My first advice for successful aircraft ownership is, surround yourself with a knowledgeable team with significant tenure in aviation. Aviation companies come and go as the wind blows. Secondly, utilize a team that does not profess knowledge in aircraft ownership; locate and utilize a team that owns and operates aircraft themselves. My team provides that, coupled with a full-time experienced legal department, maintenance consultation, and a global network more than 48 years strong,” Steven says.
In any given aircraft transaction one can expect to actively work with 20 to 40 people from a dozen or more separate entities across the nation and or world. Some of these people are straight-forward professionals; others are not so easy to accommodate.
“One will encounter numerous state and federal agencies across numerous jurisdictions, numerous states and counties all with varying tax implications, compliance with the Federal Aviation Administration, compliance with the SEC in some cases, compliance with the anti-terrorism background checks, and the list goes on,” Steven says.
The steps are pretty well-defined but they can get complicated quickly. There are loan pre-approvals, closing timelines and transaction details. And that is even before locating the right aircraft that will meet the customer’s safety, maintenance and cosmetic and design requirements.
“Once an aircraft is located, we negotiate the showing, relocate the aircraft to the client or the client to the aircraft. Often it is not as easy as it sounds. I encourage making an offer prior to ever laying eyes on the aircraft. This typically eliminates months of wasted time and numerous misrepresentations of the aircraft. Once an offer and terms are accepted, then you can go and visually accept or reject the aircraft based on the cosmetics. At this point, we have already reviewed all of the aircraft maintenance and history in great detail. After agreements are executed, the aircraft is flown to a certified inspection facility for a pre-purchase inspection (PPI). Pre-purchase inspections start at a flat rate of $6,000 and quickly climb to $350,000.”
The PPI portion of an aircraft transaction is where most deals die. “If the PPI process is completed successfully and closing takes place, you are well on your way to aircraft ownership. Having a team that completes this process well over two dozen times per year will make most of these issues non-existent or painless and will increase the success rate of acquiring and or selling an aircraft that is safe, meets the client›s needs, and will position the owner to take advantage of the greatest exit strategies available—whether trading up or down or exiting aviation all together.
“You should utilize a team that will listen first, ask the correct questions second, and approach every scenario with a third party, bird›s-eye view to deliver a solution that meets the mission of the client. A pilot will sell you what they want to fly. A mechanic will sell you what they like to work on. A broker will sell you what they have listed or what makes him the most money. An insurance agent will sell you what they want to insure. A friend will sell you their problem.
“A large asset dealer such as our team will sell or trade you our inventory or show you how to buy like we do. Period.” he says.
An important sale or purchase like an airplane naturally requires legal help in putting it all together.
“I have a full-time legal team with Brunson, Barnett, and Sherrer, P.C. J. Scott Barnett, Esq. is the team member whom I rely on the most when working through complicated transactions. I chose Scott Barnett to represent me along with my clients due to his superior diplomacy, significant experience in corporate and governmental relations, and his precision for commercial transactions both large and small.
“I am proud to say that the majority of our customer have worked with us for more than twenty years and have been key to the growth of our company through referring friends, family, and associates,” Steven says.
Style in the Sky
Another important aspect of Premier’s avitaion business is remodeling and refurbishment.
“As in most professions, I›ve had my share of difficult and lengthy refurbishment projects, but I typically look at refurbishment as one of the more fun elements of my job.
“After years of my wife, Heather, the kids and I traveling together, that experience has migrated into Heather leading our company’s refurbishment projects from beginning to completion.
“Having a natural eye for beauty, combined with the knowledge of functionality and practicality from years of having four children traveling with us, Heather brings a unique perspective to the design, paint and interior elements of an airplane.
“Our most impressive refurbishment work to date has been completed without client oversight, allowing Heather to deliver her expression of design, class and style. The results have always exceeded all client expectations, including mine.”
Aircraft refurbishment all depends on the size of the aircraft, whether a total or partial refurbishment, paint or no paint, quality of materials used, and additional upgrades or upgrades required for legal conformity purposes.
“Due to our company’s global outreach, we aren’t always able to use the same completion facilities. But over the years we have certainly narrowed our preferred completions facilities to a very short list.”
Major decisions and costs come with large refurbishment projects. That’s why it is so important in each and every aspect of avitaion to associate with professionals that are well known for high-quality work.
Premier Group, Inc.
4725 65th Place North