How to Buy a Private Jet

Buying a business jet is a substantial transaction with technical, legal and tax questions running side by side. This guide sets out how to buy a private jet in 11 steps, and where Jaffa & Co supports buyers along the way. Our aviation team has advised on aircraft and other assets with an aggregate value of several billion US dollars.

Step 1: Letter of Intent

We may or may not be involved in negotiating the LOI, but early involvement helps us identify and address potential issues with the ownership structure, delivery or closing location, taxes and customs duties.

Step 2: Aircraft Purchase Agreement

While the APA is negotiated, someone should also be advising on its technical aspects, so that the scope of the pre-purchase inspection and the required Delivery Condition of the aircraft are properly documented. The APA also defines which technical items, or Discrepancies, must be repaired. These generally include anything affecting airworthiness or needed to meet the Delivery Condition, which is why proper technical advice on the Delivery Condition is essential.

Step 3: Technical inspection

The aircraft is positioned for the pre-purchase inspection, with the buyer having instructed, and sometimes pre-paid, the inspection facility. The facility’s capability, availability and distance from the aircraft’s base and the planned delivery location all deserve thought. This is also when the buyer should review the aircraft’s records.

Step 4: Inspection report

The facility reports every item found. Not all of them will be Discrepancies under the APA. The buyer then has a set period to accept or reject the aircraft. The right to reject, also defined in the APA, is generally limited to severe discrepancies that would take long to fix or affect the aircraft’s value.

Step 5: Correcting Discrepancies

After technical acceptance, the seller instructs the facility to correct all Discrepancies. How long this takes depends on their nature and the availability of parts.

Step 6: Preparing for delivery

• The buyer finalises the ownership structure and tax advice, which will affect where delivery takes place
• Both parties prepare delivery documents and lodge them with the escrow agent
• The seller makes sure maintenance programmes are paid up, current and ready to transfer
• The seller arranges an Export Certificate of Airworthiness if needed, for example when the aircraft moves from the UK to the US register
• Other pre-closing points are settled, such as a financier’s requirements

Step 7: Return to Service

Once all Discrepancies are fixed, the facility records the aircraft’s Return to Service in the logbooks, confirming she is airworthy again. Return to Service usually triggers the deadline for closing, or sometimes the later of Return to Service and the issue of the Export Certificate of Airworthiness.

Step 8: Funding

The buyer usually funds the escrow account with the balance of the price and other costs, such as positioning or test flight costs, ahead of closing.

Step 9: Positioning

The seller positions the aircraft for delivery, if necessary.

Step 10: Closing

The closing process is set out in the APA. Typically, both parties give irrevocable instructions to the escrow agent. Funds are released to any seller-side financier, who discharges its security, and the aircraft is deregistered from its current register. Once deregistration is confirmed, the balance is released, the buyer receives title and the remaining documents are exchanged.

Step 11: Post-closing

Any post-closing matters are dealt with, such as hold-back obligations if the parties agreed one.