How an Airplane deal should work
Recently I had the opportunity to sell a client’s Hawker since he had upgraded to a larger aircraft. We had a willing seller and a willing buyer and the transaction went very smooth.
What makes this sale noteworthy was that the end result was a fair and smooth pre purchase and transaction. Both the buyer and seller understood what was outside the maintenance manual limits/airworthy and needed to be repaired and whose responsibility it was for those items. Our purchase agreement was well written as are most purchase agreements these days.
What we see far too often is one side or the other trying to fight each and every legitimate and sometimes not legitimate squawk. Having done many transactions in my career, it is amazing how some buyers, sellers and their brokers try to make themselves look good by pressing issues that in the end, per the contract will need to be taken care of and paid by the appropriate party.
As a broker or acquisition consultant, it is important to get what is due for your side. On the other hand, it is not in the best interest of the client to fight over items that clearly fall into one category or the other when everyone knows in the end that the responsible party will end up paying and place the transaction into jeopardy.
We have participated in transactions that the other side fought for days over something that was clearly their responsibility and the end result was they paid for the item, but the process was extended by days or weeks while they went back and forth trying to find a way to wiggle out of the squawk. We were witness to one particular case that the buying agent was particularly known for trying to make themselves look good in front of the client. They had insisted on several thousand dollars of paint issues that were clearly not the seller’s responsibility and not outside any maintenance manual limits. The end result was the deal closed days later without the paint being the seller’s responsibility. That deal closed, but we have all heard of deals that fall apart in the pre buy and often it is a result of these fights over squawks.
It is only human nature that after the first few fights over something that is a legitimate item for one side or the other, that the lack of trust creeps in and then everyone bristles up and the whole process is put into jeopardy.
As the old saying goes, “What is good for the goose, is good for the gander.” Deal makers understand this and keep the transaction on track by only pressing when it is truly a gray area and knowing what is a legitimate squawk that needs to be taken care of by one side or the other.
