Buying a Jet? How to Find Gold on the Market

Just over a year ago, there were over 40 Cessna Citation CJ3s available on the pre-owned business jet market. The activity that subsequently occurred in the second half of 2020 into the present day is well documented, as is the fact that supply is limited: The issue is that some buyers may not realize how limited... 

According to Par Avion Ltd’s Founder and President, Janine Iannarelli, there were just eight CJ3s remaining for sale as of late September (representing less than 2% of the installed base). “Regardless of which resource you look at, it’s a very tight market,” she explains. 

Ms. Iannarelli had just told an online audience viewing a European Business Aviation Association market discussion [for which she was a presenter], that of the eight jets for sale, she believes “it’s possible only one or two would suit the needs of the majority of buyers”. 

While that makes for stark reading, viewed in the light of today’s market, the same applies whether the market is awash with options or not. In reality, buyers need to consider a variety of factors when shopping for their ideal private jet, each one whittling down the available options, meaning they will actually be shopping a much smaller pool of jets than the market statistics would suggest. 

Akin to panning for gold, a large amount of grit and stones must be sifted through to uncover the treasure. So what factors distinguish the best picks for buyers on the pre-owned market? Having identified the aircraft, right down to the desired make and model to fit the mission need, what should today’s buyers be asking as they assess the available pool? Iannarelli shares some insights…

Differentiator 1: Budget 

Any private jet buyer seeking to maximize the benefits offered by Business Aviation will have a fixed budget for buying their aircraft. The budget will apply both to the acquisition cost, and to the cost of ownership (fixed and variable operating costs). 

“Often while they’re working through a group of applicable aircraft, budget is a differentiating factor for buyers,” Iannarelli says. “In the case of some buyers, that would certainly exclude the later-production serial numbers, or it might preclude a jet that offers a substantial modification, such as an upgraded avionics platform, putting its asking price above like-kind aircraft on the market.”

In the case of the Cessna Citation CJ3, Iannarelli identifies the Proline Fusion flight deck as being one example.

On the other side of the coin, however, as jets grow older, their maintenance needs increase as life-limited parts need replacing, stresses and strains occur to the airframe and engines, corrosion sets in, and technologies function less efficiently than they once did.

In addition to increased periods of downtime for the jet, the impact on operating costs grows, with maintenance forming a substantial part of an owner’s budget. Thus, many buyers will have a sweet-spot in mind relating to the age of the aircraft they are prepared to purchase, with the ideal being ‘not young, not too old’.

Irrespective of age, though, total time on the airframe and engines is important, as some jets will have been utilized more intensively than others of a similar vintage. “This means they are at a different place in their maintenance cycle to comparable jets,” Iannarelli explains. 

“That will absolutely be a differentiator to many buyers, who should look to receive professional advice on how this will impact the cost of ownership.” 

With respect to maintenance costs, a buyer may prefer to only shop for aircraft that are enrolled on an hourly maintenance plan, helping ensure at least some of the upcoming costs will be covered, and are more predictable. 

Not all aircraft on the market will have such coverage, though, further reducing the pool for some buyers. 

Differentiator 2: Geography 

Indirectly and partially linked to aircraft maintenance, the physical location of the jet for sale can impact whether it is considered attractive by a buyer or not, and can also work to reduce the list of viable options on the market. 

For example, a jet registered with an authority not known for enforcing the same maintenance standards as those in the would-be buyer’s region or nation might automatically be eliminated from the buyer’s search. 

Similarly, maintenance support and infrastructure can be sparse in some parts of the world, creating questions in the minds of some buyers over the storage, security and upkeep of a jet for sale from those regions. 

Although approximately 70 percent of the business jet fleet resides in the United States, when Iannarelli speaks of an aircraft being “geographically undesirable” to certain buyers, she includes those based within the States. 

“Aircraft that are based in saline (coastal) environments could prove to be undesirable to some buyers,” she explains. “If a jet is not properly cared for and protected, salt can corrode the metallic parts and components that make up a jet’s airframe and engines.

And then there are just the “personal preferences” of buyers, she adds. This includes those who may simply wish to avoid the extra complexities and stresses of buying and importing an internationally-based jet, thus discounting them as viable purchase options. 

With the rising call for greater transparency and increased scrutiny from global justice departments, whose focus is squarely on aviation, trading in a questionable region lessens the desire to pursue an aircraft registered or owned by someone based there. 

“In these cases, it doesn’t matter how nice the airplane is,” Iannarelli says. “The discriminating buyer is going to reject this complexity and simply wait for the right choice to manifest itself in the market.” 

Differentiator 3: Pedigree 

Sometimes, it’s not until a buyer delves into an aircraft’s logbooks that they find reason to move on, eliminating it from their search. 

The records should offer a complete history of the jet, from the factory floor right up to the present day, and the value of complete and consecutive logbooks cannot be understated (hence the reason that some flight departments keep them in fireproof safes!). 

“Incomplete or missing records is an instant red flag to buyers – a show-stopper for my clients,” Iannarelli explains. “Many will not proceed with a transaction if they are not satisfied they have the whole story of the jet – from beginning to end, and that any maintenance issues that have arisen in the past were resolved in a complete and satisfactory manner.” 

She adds that missing or incomplete records can create problems with importation, as, for example, an FAA official is likely to be disinclined to sign-off on issuance of a Certificate of Airworthiness where the records do not attest to the history of the airplane. 

There’s one type of record, however, that may reduce the appeal to a buyer regardless of how complete it is. 

“Damage history never completely goes away,” Iannarelli explains. “If a jet has suffered significant damage, though it may have been repaired by the very best MRO provider in the industry, that history could very well make it a ‘no-go’ for some buyers, or the cause for discounted offers from others.” 

Buyer’s Tip: Be Flexible in a Tight Market 

The preceding points come with a caveat for the buyer: Iannarelli stresses that buyers must understand not everything is weighted in their favor. 

Today’s market moves at lightning speed – with many jets trading before they ever reach the open market. Therefore, she emphasizes the value of using an aircraft sales professional with an extensive network to act on their behalf. 

And where a scarcity of jets already exists, some leeway and compromise from the buyer will be needed for any options to exist at all. After all, there is an abundance of others in the market who are almost certainly vying for the same choice picks. 

“In a tight market, a buyer needs to be more flexible – which could mean accepting an interior configuration they might not otherwise have accepted,” she explains. 

“Likewise, securing an aircraft in today’s market could require the buyer to be willing to spend the time and money fixing the cosmetics, or updating avionics, entertainment, or cabin management systems,” she concludes. 

Indeed, Iannarelli’s advice brings us full-circle to the picture of prospectors panning for gold: Having found their precious metal, there is still the need for refinement – the removal of impurities – before the gold realizes its optimal worth. 

In like fashion, today’s buyers should expect to remove some ‘impurities’ for themselves as they move quickly to purchase the best jet from today’s tight pre-owned marketplace.

Janine Iannarelli, is the Founder and President of Par Avion Ltd.

An industry veteran, Ms. Iannarelli has amassed over 35 years’ experience in Business Aviation generally, and aircraft sales specifically. She founded Par Avion in 1997 with the express objective of meeting the demand for a more personalized service in terms of the acquisition and sale of business aircraft. Over the years, Par Avion has represented countless buyers and sellers of pre-owned business jets from all around the world.

Ms. Iannarelli is an active participant in the wider Business Aviation community, and is a current member of the National Business Aviation Association (NBAA), European Business Aviation Association (EBAA), and Women in Aviation, International (WAI).

She was also invited to serve on the EBAA Associate Members Advisory Council (AMAC) Sales and Acquisition committee in 2016, providing expert input on international sales transactions. The following year, she was appointed as its Chair, and elected Vice Chair of the Board by her fellow AMAC Chairs in 2019.

More information from www.paravionltd.com