Yep, a stocking aircraft dealer we both know forwarded me the email. First of all if the guy doesn’t know this company is a stocking aircraft dealer and to not send him an email trying to get a listing, that’s a problem in itself. Shocked he mentions WU specifically;

“The reason for me reaching out is because I wasn't sure if you heard the news about WheelsUp facing bankruptcy. It would seem if they need to liquidate that fleet it will drive down King Air Aircraft prices across the entire model-line especially the 350 series.“

His subject line was a straight up scare tactic WheelsUp Bad News for King Airs and NXXXX

Desperate and unprofessional.

Why ask what happens to the market as a result of repos? Anything that puts more airplanes on the market usually has the same supply and demand effect.

Hey Brian, if a rocket surgeon calls you about your KA, I'd think you'd pick up, just to ask what a rocket surgeon is.

The only surgeons I know work in trees.

That's kind of the point, if this happens, will the airplanes eventually make it to the market... yes... but not all at once in a market crashing scenario like these unscrupulous brokers are telling people.

I find the scenarios and personalities to be interesting in that some bankers just don't want to know anything about their collateral after the deal is signed. The thinking is that once they know something they have to DO something. As a rule, bankers would prefer to work something out versus repossessing the aircraft but at some point, a repossession may be unavoidable even though services are on the market to inspect the collateral routinely, value the asset every so often so that they better understand their collateral position, etc. Most decide to do nothing until crap hits the fan. In one really interesting case, the bank found out that they did not have liens filed against the aircraft so they really had no rights to repossess the aircraft. When I informed the bank of my findings, I recall the banker's eyes becoming the size of a softball!

On those occasions where I have been called out to appraise the aircraft prior to or at the time of the repossession, avionics may be missing, logbooks may be missing, one engine may be elsewhere, etc. In the 2007 - 2008 fiasco, I ran into a number of turbine aircraft that had been sitting for extended periods and no engine runs or maintenance had been performed. Needless to say, that factor had an impact on the final opinion of value.

To Chip's point, these aircraft were not "dumped" on the market as they were. There was some maintenance and so forth completed in order to maximize the bank's return. The sad thing is that for smaller banks, they will probably never lend on another aircraft as they see the risk too high when things could have been resolved differently.

Good luck.

When you borrow on a jet, I am familiar that you must keep engines on an engine program IF you acquire the aircraft on program. Some lenders require that but not all. Do the engine programs alert banks, much like my bank can get alerted if I cancel or stop paying insurance? Can the bank then maintain the aircraft on the engine program? Can they repossess the aircraft if it comes off program?

This shows my ignorance but does a borrower have to maintain the aircraft and keep it airworthy condition or have an annual? Can they repossess it if it falls out of airworthiness (annual)?

I have seen a 310 and Navajo rot because it was collateral on a loan. The bank didn’t want it. Eventually they got the money from the 310 when the owners estate settled. He lost his medical, flew it one last time, and parked it for 10 years. He owed $46k on it IIRC and didn’t miss a payment. He should have sold it. I tried to buy it to use it from my school and he would not budge. It was worth $46K when it was parked but worthless after 10 years and died of ramp rot.

Curious…

I agree. If it's that great of a deal (on ANY business venture), why do they need ME?

Not that I am aware of, at least not on a widespread scale, I’m sure there are some banks that are diligent and staying on top of the details, the reality is that in most cases if the guy quits paying his engine program, he quits paying the note and vice-versa. Plus, if the engine program hasn’t been paid in two years it’s only a couple of hundred grand on most jets… so who cares. What’s worse is when they are parked, not ran, and the engines get blacklisted.

A somewhat related story . . .

A few years ago I was asked to appraise an older Citation. The engines were not on an insurance plan and the banker warned me that there was something odd about one of those engines.

Turns out, the second engine was a rental! The owner was unable to afford an overhaul so they were exchanging rental engines that were nearly run-out. What happened to the engine that the bank had a lien on you ask???? I called the overhaul shop and was told that the engine in question could not be overhauled. They had the core in the shop and used it for spare parts as needed.

The appraisal report, of course, valued the aircraft as effectively having one engine with X hours on it. I told the banker that this scenario didn't develop overnight. This had been going on for years. However when I offer to spot check collateral in someone's portfolio? That's TOO expensive! Really? Compared to scenarios like this?

Now, I think most banks who finance turbines do require that both are enrolled on a program. As someone else posted, dropping out of a program and then trying to get back in is NOT cheap but I don't know that anyone monitors if the policies are dropped or not. THAT would be TOO expensive!

Good luck.

Thanks for the answers gents! In the age of computers there are likely APIs and reports that could be printed, electronically sent, and ADS-B spider tracks that could ensure an aircraft didn’t lose $200K overnight *but* no cheap bank would want to pay for that $2,500 annual service and it’s likely the engine programs love it when an “owner” operator goes off program and either needs and overhaul or has to come back on program.

Thank you for the information!

With a little bit of coding and a few dozen thousand in API fees, I could code my way to retirement just by monitoring planes. …but the legal liability of the first miss on a GLEX would most certainly bankrupt me.