Purchasing Aircraft That Require Repatriation

Tony Kioussis (00:33):

Welcome to another Asset Insight podcast covering the aircraft ownership life cycle. I am Tony Kioussis, President of Asset Insight and your host. Air Conformity provides various technical services, including compliance and conformity services to both business and commercial aviation companies. The company performs organization and certification audits, provides manual and document consulting services as well as a range of FAA certifications with designated airworthiness representatives. The firm performs its services globally with representation in Europe, Asia, North and South America. Joining me today is Bob Beaumont, Air Conformity’s Founder and President, to discuss what operators need to consider when purchasing an aircraft that needs to be exported from one jurisdiction and imported into another country. Welcome to the program, Bob. Let’s start off by discussing how your background led you to establish Air Conformity in 1996.

Bob Beaumont (01:32):

Well, I’ve had a long career establishing and working to certify 121 and 135 operations. I’ve worked on the ground floor at both commercial airlines and large corporate operations. I’ve gained knowledge and experience in both commercial and corporate arenas. Sometime ago I was invited to be part of an FAA Advisory [ARC 00:01:51] Committee. And my job was to compare and list the FAA regulations governing 121, 135, 125, 91 and [95-1F 00:02:01]. To my surprise, I found that written FAA regulations between these different parts were basically word-for-word identical. However, those identical regulations in practice are interpreted and enforced by the FAA, as well as those within the industry, very differently.

Bob Beaumont (02:15):

I decided to start my own company to better utilize my expertise. I had previously been a Designated Airworthiness Representative, or DAR, and traveled the globe providing FAA certifications and aircraft rescue movements and audits. So I established a cadre of trusted and talented individuals capable of performing these tasks safely and efficiently across the globe and moving abandoned, as well as used and new aircraft, from one country of registration to another. Each one of these projects was unique and management of that project has to be customized to accommodate the best and most efficient process to ensure the buyer-owner is receiving what they paid for and within the expected timeframe.

Tony Kioussis (02:58):

Let’s talk about what needs to take place in order for a buyer to move an aircraft from one country to another. What needs to be considered? I’m sure there are many issues, but walk us through what some of the major ones are.

Bob Beaumont (03:11):

Although the process is dependent on many factors, such as location, country of registration and condition of the asset, the process generally follows three phases. In Phase One you need to ascertain the aircraft’s location and collect all the information required to perform the requested assignment and to allow you to travel to the aircraft, obtain access to the aircraft and its records and any available electronic records. If the aircraft has been returned by an operator, you should obtain a listing of manuals and documents that will be traveling back with the aircraft to its destination. You need to ensure a valid contract, agreement or memorandum of understanding exists between the parties covering your assignment. And you need to ensure that all required visas are in order to travel to the aircraft’s location. It’s complicated because now faced with the COVID, you will need to fully understand the restrictions and quarantine rules for each country you visit.

Bob Beaumont (04:05):

In Phase Two you will travel to the aircraft, perform a preliminary walk around, meet the primary contacts required to perform the task at hand and familiarize yourself with the rules and practices of the facility. You would be wise to set up an office environment to work the aircraft project. We can work from the hotel or the facility. The facility usually provides an office for us. Internet connection is critical so we can communicate. Next, you request all the required records and ensure security of those records. You’ll perform inspections and audits as required to finalize the project and aircraft movement. Once confident the aircraft is safe for its intended flight and the records, audits and documents are completed, you would contract and arrange for a DAR to perform their inspections and records review in order to issue the required documents and certificate. Contract and arrange for flight crews and ferry flights to the final destination. As an aid, Air Conformity can arrange all of these services regardless of type of aircraft, registration or country.

Bob Beaumont (05:06):

Finally, in Phase Three, you would arrange with the facility in the airport for the aircraft to be parked and this would include aircraft fueling and ground handling. You would inventory and weigh all aircraft records and materials and other equipment that will fly with the aircraft for the crew to perform their weight and balance. The aircraft must have a valid log entry releasing it from any maintenance performed to prepare it for the ferry flight. And in the case of an FAA Special Flight Permit, there must be a log entry signed by an FAA A&P that the aircraft has been inspected as a condition for safe operation for its intended flight. Ensure all required manuals and documents are on board. The aircraft flight manual is required, flight log book with a proper maintenance release. At Air Conformity we provide a temporary aircraft log book for the final maintenance sign-offs and flight crew times, en route maintenance issue and sign-offs. A temporary log book then becomes part of the aircraft’s permanent records. The operating manual, if required. Lastly, you want to ensure the aircraft is catered, if necessary and fueled as requested for its flight.

Tony Kioussis (06:12):

Let’s talk about Airworthiness Directives, or ADs, since they can vary from country to country. How does a buyer address that?

Bob Beaumont (06:20):

It depends on the country you’re going to. For an FAA registered aircraft, Airworthiness Directives are a supplemental type certificate data sheet and required to be accomplished in accordance with the instructions within the AD. In the case of a DAR issuing a Special Flight Permit, there is a provision that allows flight without all ADs accomplished. However, those ADs must be listed on a Special Flight Permit Certificate. And the AD itself must state that the AD may be open if so stated in the AD. The AD will state that the aircraft may be flown into a facility where the AD may be accomplished. This usually precludes route deviations, other than those necessary to operate the aircraft directly to that facility.

Bob Beaumont (07:02):

To give you an idea, a typical Boeing 737 has over 400 ADs that must be documented. Note that Special Flight Permits do not accommodate unnecessary stops or route deviations, including dropping off or picking up passengers. Most Special Flight Permits only allow essential crew members to be on board the flight. Air Conformity will collect the AD sign-offs and related documents, often referred to as a dirty fingerprint, copies to build a proper file to all of these applicable of the aircraft fleet type. Many corporate operators do not keep records or account for ADs that are not applicable to their particular aircraft. This is a problem when moving an aircraft or transferring from one regulatory authority to another. In the case of an FAA, the DAR needs to address all ADs, even if not applicable to this particular aircraft or its engines. At Air Conformity we have templates allowing us to build complete files, account for all ADs for easy reference.

Tony Kioussis (07:58):

What about service bulletins from the OEM? Might some service bulletins need to be completed in order to import an aircraft?

Bob Beaumont (08:05):

Service bulletins are basically recommendations, usually made by the manufacturer of the aircraft, its engine or its accessories. Although these recommendations are usually a good idea to incorporate, they’re not required unless there is an AD requirement that references that particular service bulletin as part of the instructions to accomplish the AD. Many manufacturers will categorize service bulletins as mandatory. However, that is not considered mandatory by the regulatory authorities, not in the FAA and not in most countries. During purchasing negotiations between the seller and the buyer certain service bulletins can become a commercial issue and, therefore, part of the Sales Agreement and often accomplished by the seller at the facility where the aircraft is located. We would follow the requirements of the Sales Agreement as representatives of either the buyer or the seller, depending on whom we represent, to ensure any service bulletin required by the Sales Agreement is performed properly and signed off accordingly.

Tony Kioussis (09:02):

Okay, the buyer has completed the work required to obtain an Export Certificate of Airworthiness. Who issues that document?

Bob Beaumont (09:10):

Export Certificates of Airworthiness or Export C of As can be issued by the civil aviation authority of the country exporting the aircraft. Or in the case of the FAA, a DAR can issue an Export Certificate. New aircraft or engines will carry a manufacturer’s Export C of A issued by the country of manufacture and usually by a factory representative that’s been granted that authority. This is an important document and usually one of the first documents we seek during the pre-purchase inspection. We consider it a birth document for the aircraft and/or engine. It will state the type certificate data sheet, number of manufacture and that the aircraft and their engines are in a safe operating condition. This Export C of A, however, is not to be considered an Airworthiness Certificate.

Bob Beaumont (09:57):

If the aircraft is located in a foreign country, then that country’s civil aviation authority will usually issue the Export C of A. This could be a lengthy, time consuming process. At Air Conformity we utilize representatives that speak the language and are familiar with the regulations of that country to speed things along. Many of our clients have told us a deal would not have happened without those dedicated bilingual individuals.

Tony Kioussis (10:20):

Let’s talk about the pre-purchase inspection. Should that not be accomplished before the aircraft is exported? Walk us through that process and timing.

Bob Beaumont (10:29):

Yes, pre-purchase inspections are very important. Most buyers hire a person to inspect the aircraft and its records to develop an overview of the condition of the aircraft, its engines and its equipment and its current maintenance status. This is highly recommended, usually mandated by the Purchase Agreement between the buyer and seller. Most often the time and dates allowed to inspect the aircraft and its records are limited by the Purchase Agreement as it is designed to be a quick overview of the asset. The pre-buy is not designed to identify all issues and conditions due to the short timeframe allowed to conduct the inspection. The inspecting entity will therefore focus on the high dollar items and obvious issues to report back to the buyer. Most pre-purchase inspections are granted five to 10 days, but I’ve seen them limited to three days.

Bob Beaumont (11:18):

Once the aircraft is deemed to be acceptable by the buyer, you can begin the detailed records audit and physical inspections of the engines and airframe. This detailed inspection and records audit gathers all the pertinent and current records necessary to present to the FAA and other airworthiness authority that enables the aircraft to be issued an Airworthiness Certificate and Special Flight Permit, or Ferry Permit, from the country of registration.

Tony Kioussis (11:45):

Is there anything else the buyer needs to accomplish in order to reposition the aircraft?

Bob Beaumont (11:50):

Well, purchasing a foreign registered aircraft is highly dependent on a number of factors. Usually these factors are moving targets, meaning that country’s requirements may change. I’ve seen them change by the hour or the day and how the requirements are interpreted may change. This is why it is important to have professional representation that has experience working with the landmines and changing requirements of the local jurisdiction. The very best advice I can offer is to perform a proper and speedy pre-purchase inspection that will provide an overview of the condition of the aircraft. The flags that could raise the cost and/or timeframe to recover the aircraft and move it to another location will be important. If a pre-purchase inspection time is severely limited by the Purchase Agreement, then one should be aware that there may be issues not discovered due to the limited inspection time.

Tony Kioussis (12:41):

Is there anything else that you would want people to know about the services Air Conformity provides to the business aviation community?

Bob Beaumont (12:49):

Well, purchasing a foreign registered and operated aircraft is not always difficult, but it is always complex due to the different authorities and regulations that must be addressed. Air Conformity has many years of experience in that process acting either as consultants or managing the entire project start to finish. The condition of the records as well as the safekeeping of the records is paramount to moving an aircraft to new registration or an Airworthiness Certificate or placing the aircraft onto a 121 or 135 Operating Certificate. We’d like to think of our services as one stop shopping. And we always work with our client’s best interest in mind.

Bob Beaumont (13:26):

Four suggestions I can make to anyone seeking the type of support we’ve discussed today are one, contract with reliable and experienced companies to work on your project. Two, make sure you conduct a pre-purchase inspection before finalizing any purchase. Three, prepare for a lengthy detailed records and airframe engine audit and collection of documents to move the aircraft into a new country or regulatory authority. The pre-purchase inspection should show the condition of the records and predict a timeframe to complete the task. Four, prepare a listing of tasks that will have to be performed once the aircraft reaches its destination to be issued an Airworthiness Certificate to the new regulatory authority. Preparing and placing an aircraft onto a 121, 135 or 91-S Certificate is a separate and equally complex project. If you want to learn more about how we can help, please visit our website at www.airconformity.com.

Tony Kioussis (14:27):

This has been another Asset Insight podcast covering the aircraft ownership life cycle. Please visit our ever-growing podcast library at assetinsightpodcast.com and select from any number of topics discussed with business aviation industry experts. This is Tony Kioussis and, as always, thank you for listening.