Page Description

The
Ultimate
Airplane Buying
Guide

1
Table of Contents

Table of Contents
3 Introduction

4 Finding the Right Aircraft

4 Define Your Mission
6 Selecting The Best Private Jet Solution For Your Needs
7 Choosing Your Jet Category
9 Understanding The Costs And Creating Your Budget
12 Choosing Your Private Jet Model
14 Finding Your Aircraft

15 Executing The Acquisition

15 Team Formation
17 Selecting Your Finalists
18 Letter Of Intent
19 Deposit / Escrow
19 Agree to Pre-Purchase Inspection Terms
19 Contract Negotiation
20 Pre-Purchase Inspection
20 Registration
21 Closing
21 Import / Export

22 Asset Management (The Vault)

22 Monitoring, Managing,and Upgrading Your Assets
23 Engine Programs
23 Parts Program
24 Refurbishment and Upgrades

25 Conclusion

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Page Description

Introduction
Guardian Jet created this airplane buying guide to
help you through the aircraft acquisition process.
You'll find this guide invaluable for selecting the
best kind of jet for your needs, finding the specific
plane, managing the acquisition of your target jet
and managing your asset post-purchase.

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Finding The Right Aircraft

Finding The Right Aircraft

Define Your Mission
How far will you fly, with how many people, out of how short a runway?

Rarely does someone always fly the same trip or type of travel every time. You
may have frequent short-haul commuter flights some days and international
multi-stop trips the next. The degree of variation in the types of trips will be one
consideration when you decide to purchase vs. charter or fractional ownership.

Here is the process for defining your private jet mission.

Choose your home base.

Home base questions you'll want to consider include,

• Length of the runway

• Hangar space availability and cost

• Maintenance Facilities and Capabilities

• Typical weather conditions during different times of the year

• Legal and Tax Environment

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Finding The Right Aircraft

Where do you expect to fly most frequently?

Again, most jet owners don't always fly to the same place. It is common
to have a most frequent destination. The questions you'll need to
answer about your most common destination are similar to those for
your home base,

How many people most frequently travel together?

If you are a solo business traveler, a smaller jet may be the best option.
If you frequently travel with family, friends or business colleagues, you
may need a larger capacity jet.

How long do you typically stay at your most common destination?

Your length of stay affects the amount of cargo space you may need,
the crew size you will need, the hangar space you may require, and the
maintenance capabilities you'll need.

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Finding The Right Aircraft

Selecting The Best Private Jet Solution For Your Needs

Is outright ownership the best solution for your needs?

There are other options including,

• Private Jet Charter

• Fractional Ownership

• Private Jet Cards

Increasingly, UHNW and HNW travelers are opting for whole jet ownership.

Advantages

The advantages of full jet ownership are evident and compelling. A jetowner has
complete control over the schedule, availability, and amenities.

The owner typically travels with the same known and trusted crew. Passenger
security is high, and privacy is guaranteed.

Full ownership may be the most cost-effective option for travelers with a high
usage level, and there are significant tax advantages of total ownership for most

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Finding The Right Aircraft

Choosing Your Jet Category

Light Jets

Light jets target frequent business travelers

with relatively short commutes who demand
greater convenience, privacy and security of a
private jet. Light jets have a capacity of 4 to 6
passengers.
owners.

Midsize Jets

Midsize Jets target transcontinental travelers

or larger groups of passengers. Most people
picture this jet category when they think of
private jets.

Midsize jets typically can accommodate up to

eight passengers. They will have a lavatory
and often a modest galley.

Super Midsize Jets

The super-midsize category with a wider

body provides a comfortable blend of speed,
luxury, and extended range.

Super Midsize Jets typically can

accommodate up to ten passengers. They will
have a lavatory and often a full galley.

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Finding The Right Aircraft

Long-Range Jets

With an average range of 4,000 miles and

first-class accommodations, heavy jets are
designed for long-haul flights and greater
comfort.

They can carry up to twenty passengers,

and their interiors can vary from utilitarian to
luxurious.

Ultra-Long-Range Jets

Large business jets are designed for business

travel, while heavy jets (also known as
"bizliners") are converted commercial airline
aircraft.

These jets can be customized conference

rooms/offices, small bedrooms, and full-
service galleys.

They can accommodate up to 20 passengers.

They have a range of up to 8,000 miles or 8
flight hours at speeds of up to 560 mph.

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Finding The Right Aircraft

Understanding The Costs And Creating Your Budget

Now that you've understood your mission and the most appropriate jet category for
that mission, it's time to think about your budget.

Capital Cost

For a new jet, the prices range from $4 million to well over $70 million.
Expect a preowned jet to set you back between $1 million and over $50 million.

Annual Expense Budget

Once you’ve purchased your private jet, you’ll still have annual operating expenses.
Direct Operating Costs run anywhere from $1,500 per hour for a light jet to $5,000
per hour for larger jets. Fixed Costs range from $250,000 to $500,000 per year.

Generating Revenue from Your New Asset

Leasing your jet to a charter company may offset some of your operating costs.
However, there are many variables to evaluate. In some cases leasing the plane to a
charter company increases costs rather than offsetting.

Guardian Jet Tip:

There is a narrow window in which leasing your private jet makes financial sense.

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Finding The Right Aircraft

Financing Your Private Jet Purchase

There are three standard options to consider.

Cash

A cash purchase is the simplest option. Excepting, time value of money

which will be discussed shortly, a cash purchase will have a negligible
impact on your annual budget because you avoid any finance charges.

Debt Financing

If you have a favorable source of debt financing, it may be that

a personal or business loan may be the way to go. It increases
your purchasing power while preserving your capital. Look for a
sophisticated aircraft lender to compare with your own banking
relationships.

If you opt for debt financing, you should include the financing cost in
your fixed costs calculation.

Leasing

Leasing is an option if your financial situation calls for it, again, look
for a sophisticated aircraft lessor to compare with your own banking
relationships.

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Finding The Right Aircraft

Business or Personal Use

If you purchase as a business but use the plane for personal use, you may
technically be running a jet charter business (albeit with only one client). Charter
business classification would trigger a different set of FAA regulations, more
expensive insurance, maintenance requirements and tax implications.

An aviation attorney that understands both the IRS and FAA can help you structure
the ownership entity.

Time Value of Money

Finally, as part of your budget calculation, you will want to think about the time
value of money. Specifically, what would your return on that investment be if you
compared:

• New vs. used

• Fractional vs. whole ownership

• Cash vs. financing

Guardian Jet’s convenient “Create a Budget” tool is a great way to simplify

defining your private jet budget.

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Finding The Right Aircraft

Choosing Your Private Jet Model

Now that you know your budget and the category of private jet that best fits
your typical mission, the fun starts. It’s time to choose which model of private jet
you will purchase.

Guardian Jet (www.guardianjet.com) provides several tools to make this

complex decision as easy as possible.

The Jetfinder tool allows you to enter in the minimum range you require for your
mission and the category of private jet you've identified. The tool returns a list
of all available options that meet your criteria. One quick click on any displayed
options takes you to the Brochure Tool with full specifications for that aircraft.

The Aircraft Brochure tool allows you to quickly access full specs and floor plans
for any currently available private jet.

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Finding The Right Aircraft

The Cabin Comparison tool lets you compare the cross-section and floor plans of
different jet models.

In the Guardian Jet Range Ring tool, you will enter your home base airport and
up to three different aircraft models to compare the range of destinations you can
reach without refueling.

Now that you know your budget and the category of private jet that best fits your
typical mission, the fun starts. It’s time to choose which model of private jet you
will purchase.

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Finding The Right Aircraft

Finding Your Aircraft

Armed with your shortlist of potential jets, head on over to Guardian Jet’s
Listings page. There you will find a selection of new and pre-owned aircraft
currently on the market.

If you don't see the specific model you are interested in, click on contact us and
email us the details of your interests. Guardian Jet has an extensive database
of private jets available, and we can usually track down the specific model you
need or suggest a near equivalent.

  

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Executing The Acquisition

Executing The Acquisition

Acquiring a private jet is a complex process with simultaneous moving parts
across a range of disciplines including, aviation technology, aviation operations,
personal and corporate tax, and aviation law.

Unless you have an in-house team with these specific specialties, it’s best to
contract with a firm with experience in private jet acquisition.

In broad strokes, your private jet acquisition will require the following steps.

Team Formation
Before beginning your acquisition, you'll need to decide the team to manage and
operate your aircraft for you.

Responsibilities

For light jets, your flight department may just be your pilot. For larger
aircraft or small fleets, you will need a team.

The job functions listed here do not necessarily imply a dedicated staff
member for each role. You will likely define the actual jobs around the
skill sets of your team.

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Executing The Acquisition

At a minimum, your flight department should include:

• Pilot(s)

• Flight Dispatcher

• Maintenance Personnel

• Aviation Safety Manager

• Aviation Department Manager

In-House Flight Management vs. Contracting With A Flight

Management Specialist

Deciding whether to form your own in-house flight department or

contract with a flight management department is an important decision.

You'll need to consider budget, time and safety. For most private jet
owners outsourcing this function is the better option.

• Setting up a flight operations department is expensive and

time consuming.

• It’s easy to overlook crucial functions because most of the

operational expertise required will be outside your personal
(or corporate) core competencies.

• You will need expertise (or consultants) with deep

knowledge of air regulations in your home base country.

• You will have less flexibility if your flight operation needs

change.

• For staff you do not need on a full-time basis, you will be

sharing the cost of maintaining that expertise with other
clients of the flight management company.

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Executing The Acquisition

Selecting Your Finalists

With a short list of models, now we start filtering based on your:

• Mission

• Options you have defined as important

• Age

• Aircraft Total Time

• Budget

The Guardian Jet Market Survey is the tool best designed for the initial filtering to the
Finalists List.

This brings the available list of aircraft to a manageable number of aircraft for more
comprehensive due diligence in the Guardian Jet, Technical Comparison. Here you
see the finalist aircraft in an apple to apples comparison measuring:

• Fair Market Value as equipped

• Monetized upcoming maintenance that

influences value

• Upgrades to equipment for regulatory

requirements or personal preference

• Interior and exterior cosmetic improvements

• Import requirements

The Finalist presentation also recommends where to start the Offer process based on
our valuation model, market conditions and client preferences.

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Executing The Acquisition

Letter Of Intent
The LOI establishes ground rules for your private jet acquisition.

Your LOI is essential because it provides a roadmap for your acquisition and keeps
the momentum of agreeing to agree prior to the more comprehensive 1-3 week
negotiation of a Purchase and Sale Agreement

While an LOI is non-binding, be careful not to casually agree to terms that will cause
problems for you later in the PSA..

Typical critical points in an aircraft acquisition LOI are:

• The purchase price.

• A detailed description of the aircraft, including

engines, equipment, and documents that will
transfer to the buyer (i.e., make, model, serial
numbers, configuration, and maintenance
status).

• The amount of your deposit, who will hold it,

the conditions for its return or forfeiture, and who
pays the escrow agent's fee.

• A detailed description of the delivery condition

of the aircraft at the time of closing.

• Establish timelines for future actions, such as

inspection and closing.

• Agree to negotiate and enter into a definitive

Aircraft Sale and Purchase Agreement within a
specified timeframe.

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Executing The Acquisition

Deposit / Escrow
Once both parties sign the LOI, you will need to place a deposit toward the
purchase of your jet with a qualified escrow agent, typically located in Oklahoma
City, home of the FAA registry. The deposit often happens the same day as the LOI
or within a few days of signing

A typical deposit is 5% to 10% of the agreed purchase price.

Agree to Pre-Purchase Inspection Terms

Both parties need to agree on the location, date and time, scope of the inspection.
The seller may ask for an independent inspector.

Contract Negotiation
Next, you will negotiate the actual purchase agreement, called an Aircraft
Purchase and Sale Agreement (PSA). The PSA is a legal contract transferring
ownership of the jet based on the completion of certain pre-conditions, like
inspection, delivery conditions and final payment.

The PSA is a complicated document. It should be prepared and reviewed by an

aviation attorney.

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Executing The Acquisition

Pre-Purchase Inspection

At the pre-purchase inspection, a qualified Inspection Facility will examine the aircraft
in detail to ensure everything is in proper or agreed condition.

The inspection should include, at minimum, the followig:

• Documentation Review

• Airframe Inspection

• Avionics Inspection

• Interior And Equipment Inspection

• Engines Inspection

• Test Flight

Registration
Before closing, you should reserve a registration number with civil aviation authorities
in the country where you plan to register the aircraft.

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Executing The Acquisition

Closing
Before closing, you will need to:
• Obtain export certificates and a certificate of airworthiness

• Have legal counsel do a final documentation review

• Assign the maintenance plans

• Agree on final closing points

• Arrange insurance

• Confirm that all final liens are released

Finally, the principals or their representatives will meet via conference call or
electronically to authorize the Escrow Agent to simultaneously exchange funds
and an Application for Registration for the title to your new aircraft.

Import / Export
After closing, you will need to arrange for the export and import of the aircraft if the
registration jurisdiction is changing.

As you can see, buying a private jet is a complex process with many moving parts.

Guardian Jet is an expert at jet acquisition. If you’re ready to start your

acquisition, click here for a no-obligation consultation.

  

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Asset Management (The Vault)

Asset Management (The Vault)

Monitoring, Managing and Upgrading Your Assets

Now that you’ve acquired your new jet, your attention shifts from acquisition to
monitoring and managing the value of the asset you’ve just acquired.

Most private jet brokers are focused solely on executing the current transaction
(and collecting their commission).

At Guardian Jet, we're committed to guiding our clients for the entire lifecycle
of their private jet ownership, from acquiring assets, managing their assets to
upgrading or replacing when the time is right.

With that goal in mind, we give our brokerage clients access to our ground-
breaking cloud-based aviation asset tracking system, The Vault.

The Vault enables you to track and manage your aviation assets in the same way
you might track real estate or equity.

You’ll have instant access to real-time tools that provide the current value of their
private jet fleet and project know the future value of your assets.

Our best-in-class market reports provide you with our data-driven assessment
of current market conditions, and we'll help you understand where the market is
moving.
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Asset Management (The Vault)

You'll be able to spot and take advantage of market opportunities specifically

for the aircraft you own and your customized fleet plan guides when you should
upgrade or replace units in your fleet.

Based on your specific mission needs, when you're ready to replace part of your
fleet, you'll have our recommendations about what models currently available best
meet your needs.

Engine Programs
A jet engine maintenance program is an annual service contract that enables jet
owners and operators to pay for ongoing overhaul and loaner engine services
based on fixed hourly fees.

Through the tools in the Vault, you’ll be able to evaluate if participation in an

Engine program makes sense for your fleet.

Parts Program
Like an Engine Program, participation in a parts program allows a jet owner to plan
and easily source scheduled replacement parts for their aircraft.

Again, participation may not be suitable for every type of aircraft. The data in The
Vault helps our clients evaluate when to participate in a parts program and when
to opt out.

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Asset Management (The Vault)

Refurbishment and Upgrades

Finally, like any depreciating asset, there comes a time to either upgrade or
replace the aircraft in your fleet.

The Vault lets you make that decision based on real-time data and depreciation
projections.

We'll also guide you about when to refurbish vs. a total replacement or upgrade.

  

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Page Description

Conclusion
There is no other experience quite like stepping
directly from your car onto the tarmac and boarding
your own private jet.

We hope that this Aircraft Acquisition Guide will

help you along the way, but even this guide is
no substitute for a brokerage partner with deep
experience.

When you're ready to purchase your next private

jet, the team at Guardian Jet is standing by to help.

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Page Description

102A BROAD STREET, GUILFORD, CT 06437

WWW.GUARDIANJET.COM
INFO@GUARDIANJET.COM
+1 203-453-0800

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