Services

Level 1 Inspection This level of inspection would be appropriate for a financial institution that wishes to establish a realistic market value and confirmation of the condition of existing or potential aircraft financed.

Alternatively, the prudent purchaser, who is comfortable with the vendor but would like a second unbiased opinion of the aircraft prior to purchase.

This inspection verifies general information about the aircraft such as the existence of logbooks, aircraft documentation and currency, serial numbers, hours and cycles and general condition of the airframe and interior.

On completion of the exercise an indication of a fair market value for the aircraft will be recorded and in the case of a financial institution requesting the service, an indication of a realistic "fire sale value" at the time of inspection.

The report will be bound and include photographs of the airframe, interior, avionics, instrumentation and any obvious damage or deterioration

THE LEVEL 1 INSPECTION IS NOT, NOR CAN IT BE USED, AS A SUBSITUTE FOR A COMPREHENSIVE PRE-PURCHASE OR DETAILED TECHNICAL INSPECTION OF THE AIRCRAFT.

The inspection will include:

• Existence of Airframe, Engine and Propeller Logbooks (where applicable)
• Existence and currency of Certificate of Airworthiness, Certificate of Safety (MPI), Certificate of Registration, Radio Station Licence, Minumum Equipment List, Weight and Balance and compass swing currency
• Existence of required safety equipment and condition
• Confirmation of airframe, engine and propeller (where applicable) serial numbers cross checked with Logbooks
• Confirmation of year of manufacture
• Confirmation of current registered owner
• Confirmation of registered mortgage status
• Detailed list of avionics and additional equipment
• Cursory inspection (no opening of inspection panels or dismantling) of the airframe, interior, engines and propellers (where applicable)
• Ascertain a fair regional market value based on the inspection results applied to a minimum of two internationally recognised aircraft valuation guides coupled with Internet research with local market conditions and trends taken into account

Researched Market Value

The Researched Market Value would be appropriate for a financial institution that wishes to establish a realistic international, local and "fire sale" value of current or potential aircraft to be financed.

We would recommend the Researched Market Value to financial institutions who are familiar and comfortable with the asset financed and as such do not deem a physical inspection necessary.

This service would also be of benefit to the prudent purchaser, who is comfortable with the vendor but would like a second unbiased opinion of the asking price prior to purchase.

On completion of the exercise an indication of a fair market value for the aircraft will be recorded and in the case of a financial institution requesting the service, an indication of a realistic "fire sale value" at the time of inspection. In addition to the valuation we would also confirm the year of manufacture, the current registered owner and details of any mortgage lodged with the South African Civil Aviation Authority. The aircraft value would be determined by means of at least two internationally recognised aircraft valuation guides coupled with Internet research and with local market conditions and trends taken into account.

THE RESEARCHED MARKET VALUE IS NOT A TECHNICAL OR PHYSICAL INSPECTION AND AS SUCH OUR ASSESSMENT OF THE VALUE WOULD BE BASED ON THE INFORMATION PROVIDED BY THE CLIENT.

Aviation Insurance Agreed Value

Unlike short term insurance and in particular a motor policy, aircraft are traditionally insured on an Agreed Value basis. In simple terms, this means that the aircraft owner and insurer have agreed on an amount of money to be paid out (less any policy deductible) in the event the aircraft is written off.

The benefits of an Agreed Value far outweigh any negatives but it can backfire when the aircraft is under-insured. As a general principle of insurance, in the event of a claim, the client should be put back in the same position as they were prior to the accident. That is a valid principle but if the aircraft is written off and it transpires that the aircraft was under-insured, the chances are that the client will not be able to replace the aircraft with the insurance proceeds.

As standard practice, the insurance industry and the aviation public in general have placed a great deal of reliance on the Aircraft Blue Book price guide but this publication is in no way definitive. This is particularly true when applied to our local market conditions. The publication is invaluable as a guideline but prevailing local and international market trends are what actually determine an aircraft's value.

By way of example, in the first quarter of 2006, starter aircraft such as early model Cessna 172s are commanding prices in excess of 175% of the value indicated by the Aircraft Blue Book. Typically, a mid life 1964 Cessna 172E would retail in South Africa at around R350,000 whereas the Blue Book for the same aircraft would indicate a value of R190,000.

The purpose of the Insurance Agreed Value exercise would be to provide you with a researched and acceptable basis on which to request a suitable Agreed Value from your Insurer. This would be provided to you in the form of an unbiased Agreed Value Certificate from ourselves.

Whilst an initial Agreed Value is a good starting point it would be prudent to re-assess the Agreed Value at six monthly intervals to counter any possible currency fluctuations or other influencing factors.

THE INSURANCE AGREED VALUE IS NOT A TECHNICAL OR PHYSICAL INSPECTION AND AS SUCH OUR ASSESSMENT OF THE VALUE WOULD BE BASED ON INFORMATION PROVIDED BY THE CLIENT

Independent Logbook Inspection

This inspection would be appropriate for a financial institution that has re-possessed an aircraft and wishes to establish that the asset has been maintained in accordance with the manufacturers and/or Civil Aviation Authority directives.

The logbook inspection would also be appropriate in the event of maintenance disputes between the owner of the aircraft, maintenance organisations and/or the authorities.

The inspection includes a Service Bulletin and Airworthiness Directive status report.

Should a physical inspection of the aircraft be required by the client, the logbook inspection is incorporated in the Level 2 Technical Inspection and as such is not charged for separately.

Aviation Insurance Policy Audit

Insurance is often a controversial subject and many clients are unfamiliar with their aviation insurance policy wording or parameters. The implications of either misunderstanding the wording or alternatively, not having the cover they thought they had can be extremely costly in the event of a claim. Aircraft Assessing Company is in a position to offer clients a thorough aviation insurance policy audit, presented to the client in clear language together with our recommendations.

The insurance policy audit will be carried out by an aviation insurance practitioner employed by Aircraft Assessing Company and who meets the requirements of the Financial Services Board as applied to Financial services advisors. He has 31 years aviation experience, 16-years of which as an aviation insurance specialist.

Typically, the audit would focus on possible exposure, insurer security ratings, policy structure (did you get what you asked for?), aircraft agreed value and any punitive restrictions that may be evident.