Selecting an Aircraft Appraiser

10 Key Selection Considerations

1. Experience

Only with appraisal experience comes the necessary keen awareness of the dynamics and complexities leading to an accurate aircraft valuation. This hands-on experience goes beyond textbook examples and provides an ASA Accredited Appraiser the ability to interpret each unique circumstance associated with an aircraft’s value. Therefore, experience is a key component when selecting an appraiser. When obtaining a value for buying, selling, refinancing, tax purposes, or legal issues, an Appraiser that is sufficiently experienced to evaluate one of your most valuable assets is a necessity.

2. Background

In addition to appraisal experience, an Appraiser’s understanding of the aviation industry is important. An appraiser with aviation experience has a deeper understanding of the aircraft, the components, maintenance, restrictions, regulations, and industry dynamics in general. A background in aviation gives an Appraiser the awareness of the variables, both externally and within the industry, that affect business aviation and, ultimately, your aviation asset’s value.

3. Accreditation

Accredited Appraisers are considered experts in their discipline(s). An Appraiser who is affiliated with a non-profit professional association is required to comply with education, often on-going, and adherence to generally accepted technical and ethical standards. Most associations offer special designations for professionals who have demonstrated a higher level of education, experience, and dedication to the profession. This process ensures the appraisal recipient that the Accredited Appraiser’s work is accurate, impartial, and credible. However, it is important to note that not all organizations are the same. Always verify that an appraiser’s accreditation is from a worthwhile Association.

4. USPAP Compliance

For industry recognition, valuation reports should follow USPAP guidelines, which outline generally accepted standards for professional appraisal practice. Enforcement of USPAP standards is imposed by regulatory agencies, professional appraisal associations, and client groups. Required by professional appraisal associations and many client groups, USPAP standards are also endorsed by dozens of federal, state and local agencies.

5. Resources

There are a number of resources an appraiser can utilize during the appraisal process. There are books, publications, software and printed material that are popular within the appraisal industry. The Aircraft Bluebook Price Digest and Vref’s Aircraft Value Reference Guide are two well-known and utilized resource books. However, printed materials are static snapshots of a dynamic market. An Appraiser evaluates the snapshots along with other available resources for past, current, and in some cases, future market conditions.

6. The Aircraft Product Line

Each aircraft has its own unique set of characteristics that impact its value. Product lines change over time with the addition of new models and retirement of obsolete aircraft. Sometimes manufacturers change hands, or an aircraft’s name, which adds a level of intricacy to an asset’s historical development. And with the addition of modifications and individual alterations, one can create a seemingly unique aircraft. An Appraiser should understand each aircraft model, along with its differing value points.

7. Competitive Product Lines

Many aircraft manufacturers produce aircraft that compete for the same operational niche. For example, Boeing and Airbus compete for the ultra-long range, large aircraft market. An Appraiser that understands what makes each aircraft popular in regard to distance, speed, and comfort can better determine the value points for each aircraft.

8. Technical Implications

The Appraiser you choose should have an understanding of the technical implications that pertain to your aircraft. Each aircraft, along with the installed engines and components, must comply with the manufacturer’s approved maintenance schedule. There are expensive life-limited parts that require replacement, and these can significantly impact value. The difference between a large business jet with a recently completed maintenance inspection and an asset that is immediately due that same inspection can amount to hundreds of thousands in dollars. In addition to maintenance, compliance with Airworthiness Directives, Service Bulletins, and Alert Bulletins can influence the aircraft’s value.

9. Operational and Regulatory Considerations

Depending on where the aircraft flies, regulatory guidelines can be either domestic or international. Some important regulations that an aircraft Appraiser must consider include Noise Mandates, FAR 36 & ICAO Annex 16, RVSM, ADS-B, Navigational and Communication requirements, and notices of Proposed Rule Making (NPRM). The effect of active regulations, or upcoming regulations, can mean the difference between selling your aircraft to a willing buyer or selling your aircraft for salvage or scrap. A knowledgeable Appraiser can help you avoid a costly mistake in dealing with these issues.

10. Market Implications

There are numerous factors affecting the global aircraft market. Among them are: manufacturer backlogs and inventories affected by rapid changes in demand; fluctuations in domestic and foreign economies; global political instability; burgeoning foreign markets appearing in formally undeveloped nations; the state of the global aviation industry; oil prices; and, even contagious diseases. Because the market is dynamic, with many influencing factors, it is important for the Appraiser to have an understanding of current market trends, a fundamental knowledge of past markets, and an awareness of future possibilities as they impact value.

American Society of Appraisers (ASA)
American Society of Appraisers (ASA)