Aircraft Pre-purchase Evaluations

Oct. 1, 2002

From the maintenance perspective

By Joe Hertzler

This in the most beautiful aircraft I have ever seen in my entire life! What a complimenting situation to find yourself in.

An aircraft buyer has come to you, likely because you have a reputation as being one of the best maintenance providers in the country and you have some of the most knowledgeable technicians on the model aircraft he/she is looking at to buy. They place great value on your opinion. They really want to know what you think. That is until they get a little too close to the aircraft.

Understanding the emotions that can be associated with the purchase of an aircraft is important in planning and executing a good pre-purchase evaluation. I think of it as an invisible ring around every aircraft that many-a-buyer has tripped over and smashed their head. Just in case you have never seen this sort of thing, allow me to explain.

When looking for an aircraft, a new buyer is smart to contact a reputable person or company to represent them in the search and acquisition of that aircraft. By this time they have probably decided that they are going to buy an aircraft and know what type of aircraft they are looking for, (i.e. size, speed, expense). There are many good aircraft brokers out there to turn to. Most have a fairly narrow expertise however, unless they have been at it for many years.

The broker will search the marketplace and identify two or three aircraft (or more if the market allows) that really fit into the buyer’s purchase profile. The objective then is to narrow the list down to one that the buyer will take if everything checks out. Which one is decided by factors such as equipment installed, age of paint/interior, time since major inspections and overhauls, etc. Some will want to buy an aircraft that needs paint and interior because they want to customize the aircraft for themselves, while others are looking for the aircraft that will take the least amount of money to maintain over the next three to five years, (i.e. recent overhauls and major inspections).

Pre-purchase evaluation

Now the buyer has found the aircraft that, if everything checks out, is going to be his. As you can imagine, by this time he has looked over several aircraft pretty closely (from a distance) and will have gotten to know the chosen aircraft pretty well. The reality is though, as of yet, the aircraft has not been verified to be "as advertised." Everything still needs to "check out." This is when every smart buyer and broker schedules an aircraft for a pre-purchase evaluation or, as some people call it, a "tech appraisal."

Back in the old days we just called it a "pre-buy inspection." But after a series of lawsuits against maintenance providers who performed such pre-buy inspection for things such as stripper damaged windows and undiscovered corrosion, we as a maintenance industry have been careful to be very specific in defining a pre-purchase and now call it an evaluation rather than an inspection (underlining the subjectivity involved). However, it is this process that, done properly, really protects the buyer and seller from future discoveries.

It is critical to make sure the buyer or the buyer’s broker specify what exactly will be looked at and to what standard. As a maintenance provider you can make a recommendation but it must be the buyer’s call in the end. Nothing is foolproof, but the following seven steps are in my opinion a must in every pre-purchase evaluation.

1. A complete aircraft visual inspection, nose to tail (equivalent to an annual-type inspection).

2. A borescope inspection of each engine followed by a disassembly in the event that any questionable findings need to be verified.

3. Logbook chronology search – (all records are in possession from birth to current).

4. A complete logbook verification for each inspection required by the inspection program recommended by the manufacturers of the aircraft, engines, propellers, and appliances, as well as airworthiness limitations and recommended overhauls and replacements of components and parts of the aircraft.

5. A complete logbook verification for all FAA Airworthiness Directives, including appli

ance ADs, applicable to the aircraft.

6. Paint and interior – Verification of all burn certifications for interior components replaced since the aircraft was new. All flight controls removed and balanced following paint, and all interior and exterior placards installed as required by the type certificate data sheet for the aircraft.

7. Complete logbook verification to find any possible damage to the aircraft that could affect the value (gear up landing, corrosion repair, major skin damage repair, etc.) as well as proper documentation (FAA form 337), including instruction for continued airworthiness, for every major change to type design (major alteration) or major repair.

Maintenance records

As you can see, five of the seven steps are accomplished without even opening a panel on the aircraft. Maintenance records are of significant importance to the aircraft value and should not be underestimated. Making sure that all required maintenance entries are made when maintenance is accomplished not only keeps that aircraft in compliance, it also supports the ongoing value of the aircraft. Now, that being said, a thorough visual inspection of the aircraft will uncover corrosion, damage, and other possible unsafe conditions.

It is unfortunate that this process takes some time. It is during this logbook review and visual inspection, usually about three to five days, that some buyers, not all but some, "trip over" the imaginary line I was talking about. The reason I say he "smashes his head" is because all of a sudden he will have lost all reason and it no longer matters what you have to say, he is going to buy that aircraft. You will know it happened, you will hear him say "It’s the most beautiful aircraft I have ever seen in my entire life!" or something similar. It is then that you will know you are no longer trying to help the buyer make a decision. Now you are helping him get all the discrepancies corrected so that he can go fly his new airplane. I know this sounds like an exaggeration, but without a good "buyer’s" broker or maintenance provider to watch out for the best interests of the buyer, he can fall pretty hard. Without good representation, the buyer in love with his airplane may agree to pay for things that are the responsibility of the seller just because he thinks he has to have that aircraft. Watch for those in trouble and if you would not buy the airplane yourself, do whatever you can to keep him from making a mistake.

Now, the logbook review and visual inspection will always result in a list of discrepancies to be corrected. The logbook review will identify items that are missing, ADs that haven’t been signed off properly, damage history where the aircraft was backed into a hangar door and the rudder replaced, inspections never documented, inaccurate engine cycle counts, etc. These are all fairly common documentation issues. One uncommon example that sticks out in my mind is when we actually found an entry where the manufacturer (to remain nameless) had developed and issued a temporary repair order that was only to last until the aircraft reached 1,200 hours. After that time the aircraft could fly no more. They had not followed through and made any final disposition.

The visual inspection may identify damaged windows, ineligible parts installed, engine components that fail inspection criteria, or areas of corrosion. A visual inspection can even reveal flight controls that were not removed for balance following paint.

Once the evaluation is completed, the list of discrepancies is compiled and an estimate for the repairs provided to the aircraft seller. The next question that always comes up is "Which items are required in order for the aircraft to be airworthy?" You see the seller represents that aircraft as airworthy so the buyer will not be required to pay for items that are deemed "airworthy items" by the maintenance provider. Now, you’re the maintenance provider, stuck in the middle and must decide which of the items in the list needs to be corrected in order to sign the aircraft off as "airworthy." Airworthy as defined by the FAA means "conforms to type design and is in a condition for safe operation." This may seem obvious, but many discrepancies often end up in the gray area, the maintenance provider wants to fix them and the seller says it is not an airworthy issue. Remember, the seller is not signing the logbook, you are. If you believe that the discrepancy renders the aircraft unsafe, don’t let it go.

In the end the aircraft will change hands and if all went well, the seller will be happy with the price received and the buyer will be satisfied that he/she received a good value in the latest asset purchase. In addition, the maintenance provider will have performed some needed maintenance and will make a little profit as well, and in the longer view, will have established a very important and valuable relationship with the new aircraft owner.

Joe Hertzler is the president of AVTRAK, Inc., an Aurora, Colorado-based company. Joe is an A&P Mechanic with Inspection Authorization and also a Private Pilot.