Consultancy Services
ABA consultancy services include Aircraft Aquisition, Aircraft Management & Aircraft Type Feasibility
Aircraft Acquisition
Having decided on the best aircraft for either you or your company (see also our Type Feasibility Services) prospective purchaser's are then faced with finding the best example available on the market to suite their chosen model. This is not an easy task and getting it wrong (which is easy) may be very expensive.
ABA's senior management has over 25 years experience in aircraft trading of all types. Let us put this expertise to your advantage in procuring the right aircraft for you in the right market.
GENERAL OPERATING TECHNIQUE
All purchases are a little unique and we will tailor the package to suite
individual needs. However, the basic premise is the same in all cases
- you, the purchaser, retain ABA to act on your behalf in market research,
negotiation, contract production, title protection, pre-buy inspections,
acceptance, export/import (if necessary), airworthiness compatibility,
liaison with airworthiness authority, certification and delivery.
For this we charge a fee which is a percentage of the total deal size and typically ranges from 10% for deal sizes up to around $100,000, tapering off to around 2.5% for $2m or more. The size of a deal (for ABA commission purposes) is the original ask price of the aircraft + all direct costs associated with acquisition. In the majority of cases ABA save the client its professional fee at the outset in knowledgeable negotiation of the ask price, the entire benefit if which goes to the purchaser.
The following is a worked example for a middle range executive aircraft - a Beech King Air 200 at an ask price of $2.5m:
WORKED EXAMPLE (SIMPLIFIED)
RETENTION: The client retains ABA to undertake the acquisition project
through to conclusion.
MARKET RESEARCH: ABA researches the entire world market (as appropriate)
and reverts to the client with the top three examples and with delivery/cost
scenarios for each.
INITIAL NEGOTIATION: ABA will negotiate on the clients behalf the final
price and the delivery condition subject to inspection.
CONTRACT: ABA will produce a draft purchase contract for the purchaser's
protection and approval.
SECURING, INSPECTION, FINAL NEGOTIATION: ABA will set up an Escrow account
or equivalent means to secure a refundable deposit per the contract. Once
the aircraft is secure, subject to inspection, ABA will travel to the location
and arrange for the pre-buy inspection. In the case of a King-Air this
will involve detailed inspection of engineering records, the arrangement
of a detailed physical inspection on-site along with engine diagnostics
and a flight test. Face to face with the purchaser ABA will then leverage
the best "final" deal and the most beneficial delivery status.
Normally the agreed price remains as it was negotiated but there are negotiated "benefits
in kind" which add value to the overall deal.
ACCEPTANCE AND FERRY: ABA will monitor and control any works, remedial
issues or certification tasks arising from the pre-buy and/or for import
purposes. ABA will then act for the purchaser for the aircraft acceptance
and closing of the transaction. Once accepted and paid for ABA will export/import
(as necessary) and ferry the aircraft either directly to the client or
to the engineering organisation responsible for any certification works
in the country of import (as appropriate).
DELIVERY: ABA will monitor any UK certification both with the authorities
and any engineering unit and will, again act on the clients behalf to ensure
final delivery to the client:
TRANSACTION COSTS IN ABOVE SCENARIO - EXAMPLE: $ $
Original ask price: 2,500,000
Probable negotiated reduction including benefit in kind: (200,000)
Net cost of inspections, travel, escrow, legal etc..: 50,000
Net cost of ferry to import country: 20,000
Net cost of certification in import country: 50,000
ABA fee 2.5% of $2.5m ($62,500) + 2.5% of other direct costs ($3,000):
65,500
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(14,500)
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Final net price to client: 2,485,500
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Aircraft Management
Whether you already own an aircraft, or you have instructed ABA to acquire one for you, (see also our Aircraft Feasibility and Aircraft Acquisition services) ABA has the ability to professionally manage your aircraft for you. As part of its business grouping ABA owns and operates a JAR-OPS-1 Airline which is required to have in place the organisational infrastructure mandated for a commercial airline. We thus have invested in all the latest flight planning, crew control, scheduling, maintenance, software programmes and have also developed our own programmes that keep completely on top of all operational aspects of an aircraft and its continued airworthiness.
Why not remove the headache of trying to do this yourself? In fact, we believe it is very difficult to better our service. Clearly, for small, private aircraft this service is not necessarily appropriate. The following describes the main elements of aircraft control and operation, what it may cost and what ABA has to offer as an alternative.
MANAGING AND OPERATING AN AIRCRAFT
The following is a simplified list of tasks associated with owning and
operating an aircraft:
MAINTENANCE PLANNING: Aircraft have scheduled checks, airworthiness directive
requirements, service bulletins as well as a multitude of component lives
which expire on a calendar or time (hours) basis. These requirements must
be both met and optimised so as to avoid needless downtime. In addition
aircraft Technical Logs, Airframe, engine and prop logs and other records
must be kept up-to-date.
CERTIFICATION & LEGISLATION: The European Aviation Safety Authority
(EASA) controls individual authorities in member states - in the UK the
Civil Aviation Authority - CAA. Aircraft must be operated within the framework
of these authorities and keeping on top of this is a full time job.
REQUIRED LICENCES AND OPERATING DOCUMENTATION: Aircraft have scheduled
checks, airworthiness directive requirements, service bulletins as well
as a multitude of component lives which expire on a calendar or time (hours)
basis. These requirements must be both met and optimised so as to avoid
needless downtime.
AIRCREW: Most operators employ pilots and/or cabin staff in order to fly
their aircraft. Pilots require to have the necessary licences and endorsements
and must obviously be capable of flying the aircraft in question and passing
any necessary conversion courses. Checking the pilot's abilities, backgrounds
and suitability is of key importance to safe and efficient operations.
Once the pilot has converted he must undergo necessary line training in
order to gain familiarity with ordinary route flying before being released
on the line to fly the owner about. All such training needs to be organised
and structured properly in order to attain the required levels of safety.
Much the same goes for any cabin crew member, even if they are not legally
required to be carried.
ROSTERING & SCHEDULING: Ensuring the aircraft is serviceable in the
desired place at the desired time and with a crew with the necessary duty
hours remaining in order to legally fly the flight usually entails a complete
department within an airline. Obviously, for a small operation this is
much less complex but, nevertheless, if a high value asset is not where
it is desired to be then the rationale for its ownership in the first place
reduces.
ACTUAL OPERATIONS & SUPPORT: On a typical flight: The aircraft must
be cleaned, catered, fuelled and prepared for flight. Line dispatch engineering
must be completed. Flight plans must be filed and departure and arrival
slot times organised where necessary. In-flight documentation must be prepared
- the navigational logs, load-sheets, meteorology, navigational alert bulletins
and so on. Handling agents must be organised and alerted to the latest
ETA's so that the requested arrival requirements for the passengers can
be met - chauffeurs to meet the aircraft, VIP customs clearances etc. etc..
Aircrew have to have hotels and crew transport organised.
EXAMPLE COSTINGS & ABA ALTERNATIVES
To manage a corporate aircraft in a professional and safe way will normally
require an operations manager and a deputy at a minimum cost of £20K
and £15K respectively. Pilots are going to cost around £30
- £40K each. Thus a typical owner with a small aircraft is faced
with basic salary costs in of well over £100K + NI and employment
costs without considering cabin staff or extra pilots which could very
well be required for the necessary flexibility. The owner is also faced
with all the recruitment issues of choosing the right people.
ABA can offer a cheaper and better alternative with a fixed management fee which brings all the airlines resource and expertise to bear and ensures a safe and professional operation. A typical fee for a small executive aircraft such as a King Air 200 is £60K per annum. Pilots are supplied on a daily cost basis thus
Aircraft Type Feasibility
Choosing the correct aircraft for the planned operation is obviously vital. ABA has advised many clients on the optimum type and model for operations ranging from bush flying/medical evacuation through to airline fleet requirements. The following are examples of the service:
PRIVATE PURCHASE
The first time buyer is faced with a very difficult task. They are about
to purchase a high technology machine with a high dollar value that must
cater for both their immediate experience and needs as well as "stretching" them
a little in order to gain experience. It is almost impossible to make
the correct choice without proper advice. ABA's consultancy division
will analyse a client's experience, budget, operational needs, expectations
and any other valid inputs and advise on the correct aircraft and, if
required, how to finance the acquisition. Implementation is driven by
ABA through an interview and questionnaire.
Reports of this nature range from $2,000 - $5,000 and take between 2 and
5 days to produce. A little money spent with ABA at the outset will avoid
costly mistakes and frustration downstream.
CORPORATE PURCHASE OR LEASE
A company wishing to acquire or upgrade its corporate aircraft may be considering
equipment valued anywhere between $0.5m and $30m. An objective feasibility
study has, in the past, saved ABA clients (literally) millions of dollars.
There are many aspects to be considered: planned route structure, average
load factors, operational constraints, budget, prestige factor and others.
ABA will carefully analyse these parameters and identify the correct "specification".
From this, the top three aircraft models are chosen through a logistical
elimination process. These three "candidate" aircraft are then
put through a thorough comparison check in relation to the client's needs.
Market studies are produced showing pricing and availability in the target
budget zones. Direct operating costs and fixed costs, including depreciation
trends, are produced separately and then merged in order to show total
annual costs at projected utilisation levels. The report is usually 20-30
pages in length and concludes with an objective recommendation of aircraft
type and model, whether this should be leased or purchased and how to
proceed. The usual implementation involves the client sending an overview
of itself along with an outline of expectations. From this ABA produces
a detailed questionnaire, the answers to which help produce the report
- although there are usually a few additional questions to be answered
during production. Approximate cost of such a report is between $5,000
and $10,000, time scale between 5 and 10 days.
AIRLINER ACQUISITION
An airline that is planning to expand its operations and possibly acquire
a new fleet of aircraft can often benefit from an objective "unbiased" look
at their operation. ABA's feasibility studies may well endorse an airline's
own findings; however, occasionally, a major issue may have been overlooked,
or a material point missed, which comes to light during the feasibility.
In any event, this type of study will almost certainly produce tangible
benefits in one form or another simply through the analytical process
of investigation and discussion. Quotes are given on a case-by-case basis
depending entirely on the individual requirements.
SPECIALIST ACQUISITION
Feasibility studies are available for many unusual applications when a
specialist aircraft is required. Examples of this include: STOL requirements
for bush or remote operations; Island operations where range and runway
lengths offer unique constraints; Medical evacuations or repatriation
work in rough, undeveloped regions; Fire fighting; Pollution control;
Survey work; Air sea search and rescue; Oil platform support; Films;
Air races and many more. ABA has helped many clients, including Government
bodies, with such feasibility studies. Quotes are given according to
individual requirements.