Clear on Top

It’s a sign of the times, I guess.  I recently posted an article, Better With Age?, about buying, insuring, and operating an older jet airplane in what is a fairly historic buyer’s market.  But according to the feedback I got and the first-hand experiences of a few clients, there is another option for owners of older jets.

A client recently told the story of a trip his pilots made with his 1971 model G-II SP.  The trip began like many others had.  But the destination today was not an important client meeting, a visit to an out-of-state manufacturing location, or a trip to the condo in Aspen.  Today, the final destination would be a back corner ramp of an out-of-the-way airport in Southern Utah.  The client’s trusty old G-II would never leave this ramp.  It was to be scrapped for parts.

The airplane wasn’t worn out or obsolete.  Far from it.  It was RVSM compliant and had a Stage II hush kit.  It had modern avionics – the panel was the same as much later model G-IV’s.  As it sat on the deserted ramp in Utah, it could have just as easily been awaiting executives at Teterboro or golfers at Pinehurst. 

But – it was due a heavy 60 month inspection.  The cost of the inspection, combined with the engine times and the bargain basement market values on these airplanes made selling the airplane for parts a more economical alternative than keeping it airworthy – signaling the end of its useful life.

This blog is focused on aviation risk.  So what business risk issues exist when parting out a company or personal airplane? 

–         Do you have liability from the sale of parts that ultimately find their way into other airplanes? 

–         Is the airplane being sold as a whole, or do you retain ownership as parts are removed and sold?

–         At what point does the airplane stop being an airplane and become just a parts inventory? 

–         What is being done to protect the value of parts and components awaiting removal? 

–         Have you protected the maintenance records and parts tags in order to maximize value of serviceable parts? 

–         Are all valuable components being properly removed and sold, or will there be excessive scrap due to quick and careless disassembly? 

The time to discuss these issues is before the final flight is made and before the cutter’s torch is lit.