An aircraft Pre-Purchase Inspection or PPI is performed to help the potential buyer of a pre-owned aircraft to make an informed decision about the aircraft they are about to purchase. The PPI provides an independent evaluation of the aircraft and helps to demonstrate the aircraft’s operational reliability.
Effectively, the PPI is an opportunity for aircraft buyers to confirm the aircraft current condition, maintenance history and potential future costs prior to taking ownership.
What should the buyer learn from a PPI?
A PPI can be expected to provide information such as:
- The aircraft and its installed components are in accordance with the terms of the Aircraft Purchase Agreement (APA) or Letter of Intent (LOI);
- The aircraft is in an airworthy condition, or if not, an expert estimate of the cost required to make it airworthy;
- The aircraft has a current, valid airworthiness certificate issued by a competent authority without restriction or limitation;
- The aircraft is in compliance with its type certificate;
- All of the aircraft’s airframe, engine and/or propeller logbooks, as well as the maintenance records and delivery documents, are original and complete;
- The aircraft’s engine(s) and all other systems and installed equipment are operating in a manner that is consistent with the standard specifications, limitations and requirements of the applicable maintenance and/or operations manual;
- All of the aircraft’s calendar, cycle and hourly inspections per the manufacturer’s recommended maintenance program are completed and current with no extensions or deferrals, and with no non- standard or recurring inspections (ICAs) required outside of the standard manufacturer’s recommended maintenance program;
- All mandatory Service Bulletins (or equivalents) and Airworthiness Directives applicable to the aircraft, engines and appliances have been assessed and incorporated;
- All modifications, repairs and overhauls are in compliance with the competent authority standards and regulations;
- Avionics, wi-fi, satcom and cabin systems are operational and meet current avionic mandates;
- Aircraft damage and repair history;
- The aircraft doesn’t show evidence of atypical corrosion or stress outside the scope of scheduled maintenance checks;
- Aircraft and engine maintenance and/or warranty programs are current and fully paid;
- No liens are outstanding on the aircraft;
- The aircraft exterior paint and interior cabin condition (wear and tear) is appropriate for the age of the aircraft;
- If corrosion control and prevention tasks and optional Service Bulletins were performed.
To be clear, the PPI that is undertaken by a potential buyer is a completely voluntary exercise, and not required to be performed. The PPI is not a legal necessity, more a prudent decision of an aircraft buyer based on the size of the investment and the potential for loss. It is very important to set realistic buyer expectations – as a PPI is performed on a pre-owned aircraft, there will be imperfections – the buyer should be aware of this in advance and stipulate what is acceptable and what is not.
Irrespective of an existing relationship between buyer and seller, a thorough and comprehensive PPI is always recommended as the typical client is about to make a large financial decision, making the PPI a very important part of the aircraft sale transaction. Many parties are typically in an aircraft sale (buyer, seller, operator, CAMO, broker, attorneys, maintenance facility, technical advisors, aviation consultants) and the results of the PPI will usually have a financial impact on the sale transaction between the seller and buyer.
The purchase agreement (which should be used in all aircraft transactions) can specify who will perform the inspection, what qualifications that individual must possess and where the inspection will take place. Although the buyer is usually responsible for the expenses associated with performing a pre-purchase inspection, the purchase agreement should address which party is responsible for findings / anomalies discovered during the PPI. Typically, the seller will cover airworthy findings that appear during a PPI and buyer will cover cosmetic items that arise, or after some negotiation an agreement is reached by all parties.
The buyer should require the purchase agreement to be contingent upon the buyer’s satisfaction with results of the inspection. If the PPI discloses that the aircraft isn’t as represented by the seller or as expected by the buyer, then the buyer should have options to either discontinue the transaction or to require that the seller correct any discrepancies.
When buying an aircraft, the goal should be to identify possible anomalies that might not be evident to an untrained eye and thus avoid any major unexpected financial outlay after the purchase is complete.