Case Studies

Situation:
Disenchanted Beechjet owner’s aircraft is managed by a charter operator. Financial results are not satisfactory. Owner’s personal needs are not being served by the Beechjet. Client wants out of this predicament, but uncertain about future direction. Client has some interest in a Hawker 800XP. Client seeks direction.

Analysis:
The Client’s agreement with charter operator was unconventional and not performing in accordance with the Client’s understanding. The Beechjet was depreciating due to accumulation of excess hours and the aircraft incurred maintenance downtime and expense. The Root Cause: Wrong airplane sold on a faulty business plan. The Client’s personal utilization was 100 – 150 hours per year, and frequent trips required an aircraft with 2800+ nautical mile range and the ability to operate from medium length runways in the summer. Capital budget was established at $2 million. The Client’s family was relocating from the East Coast to a western state.

Solution:
First priority was to terminate the agreement with the charter operator, remove the Beechjet from charter service, and liquidate the asset. A Section 1031 Like Kind Exchange structure was created. Although the route structure was not ideal for a Hawker 800XP, we shopped for a $2 million Hawker, but the client just could not get excited. We proposed a change of direction and ultimately consummated the purchase of a Challenger 601-3A/ER below the $2 million capital budget. The Operating Budget was acceptable given the low utilization and the maintenance status of the specific 601-3A/ER we purchased. The Client retained the ability to gain charter income from his Challenger, but elected to fly Part 91 after a year of enjoyable operation for family and business. The Client and his family love their Challenger!

Situation:
Client is frustrated with his inability to purchase a Hawker 900XP.

Analysis:
For six months, the Client chased various listed and “off market” Hawker 900XPs all over the world from many questionable sources. Most were inferior aircraft. Some were not actually for sale. The Client’s view of pricing did not match reality in a recovering market. Therefore, he was consistently underbidding the market while the market continued to strengthen. Meanwhile, the Client’s transportation requirements were going unfulfilled.

Solution:
Garner Aircraft Group identified an excellent Hawker 900XP owned by a Fortune 100 Company. A very fair transaction was negotiated at a price somewhat below market for an excellent aircraft with a credible Seller. The Pre-Purchase Inspection at a factory service center went very smoothly with the Seller correcting all discrepancies without argument. The initial in-service experience was excellent. The Client was happy to finally be flying in his own Hawker 900XP.

Situation:
Client from Case I caught a severe case of “Jet Fever”. He wishes to replace his King Air C90GTx with a jet before he retires.

Analysis:
We establish a capital budget and assess the market for his low-time, pristine C90GTx. Three (3) light jet manufacturers are invited to the competition. The client is an excellent aviator and has preferences as a pilot, but the economics play a large role in the final decision. Local service is also a significant factor in this case.

Solution:
All factors point toward a Citation M2 as the correct choice. Textron service authorizes his local maintenance provider to provide warranty service on the M2. The factory “ProParts” and the Williams International “Tap Blue” programs keep under warranty operating costs at an acceptable level. Working with Ed Berger and the Textron Pre-Owned Aircraft Department, a buyer was identified for the C90GTx, and a transaction was negotiated with very favorable results for my client. The transition went smoothly, and the client is now enjoying his personal jet transportation for business and family trips.

Situation:
A long-term consulting client is a manufacturing company in the northeast. It’s Hawker 800XP has reached the end of its economic life. Client wishes to replace the Hawker before it reaches 24 years in service. Focus is on the Challenger 350.

Analysis:
The client’s routes were easily fulfilled by any mid-size or super midsize business jet. The client’s capital and operating budgets were consistent with the purchase and operation of a new, super midsize business jet. Despite the focus on the Challenger 350, we opened up evaluation to six (6) competitors from four (4) manufacturers. A lengthy evaluation process commenced that included performance, financial forecasts including impact on the client’s earnings statements, interior utility and comfort considerations, and maintenance and support issues. Simultaneously, the expense and downtime of retaining the Hawker were periodically reviewed to determine the optimal time for replacement.

Solution:
Although the Challenger 350 (and 3500 by the end of the evaluation) was a worthy competitor, the client’s decision was driven by two key factors: (i) The client required large passenger loading on many of its routine visits to midwestern manufacturing facilities, and (ii) The parent company required EVS/HUD in the replacement aircraft’s avionics outfitting. The ultimate decision was to purchase a new Gulfstream 280 with the ten (10) passenger conference grouping interior configuration and the Gulfstream EVS/HUD System as an option. The EIS experience was outstanding in every respect.