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Let Plane Data, Inc. Assist Your Bank With Risk Management
The typical banker simply does not have the time, training or experience to physically examine aircraft along with its maintenance records and this activity is necessary to properly determine the aircraft's market value. Accepting desktop reports, numbers from books and statements from brokers/dealers places an unnecessary risk on the bank for this collateral. Using unreliable sources and reports can result in the bank over extending on loans more than they should. Wouldn't it make more sense to have a unbiased trained professional physically examine the aircraft and provide the bank with a report that meets or exceeds industry standards?
Plane Data, Inc. works with banks and financial institutions across the United States to evaluate and document their collateral and assist them throughout the aircraft lending process. Each appraisal includes an on-site examination of the aircraft, its contents and relevant documentation (for example, log books). Our value data is updated monthly (not quarterly as with many published guides) and is based on actual selling prices obtained from the banking industry. In situations such as a bank examination or when the bank may need to foreclose on the collateral, it is important to have documents on file that state the condition and contents of the aircraft at a specific point in time (usually at the beginning of the loan). The reports supplied by Plane Data, Inc. provide that level of documentation. Certified Appraisal Reports are based on current market values at a specific point in time so as the overall market changes, so does the value of the collateral. As a result, some banking customers need periodic updates of value for the aircraft in their portfolio. Plane Data, Inc. can help. Give us a call and we will work with you to establish an ongoing program to document and evaluate aircraft so that you always know the value of the aircraft in your portfolio. Concerned about the documentation needed to properly secure an aircraft loan? What about a training seminar on the "ins and outs" of aircraft financing? When you use Plane Data, Inc. you're not getting a service, you're getting a solution !
Typical Questions Do You Conform to or Abide by USPAP (Uniform Standards of Professional Appraisal Practice)? Yes! Mike Simmons is one of a few select individuals in world who is an NAAA Certified Senior Aircraft Appraiser with a USPAP Endorsement. USPAP Aircraft Appraisal Reports are available. Why is there a need to have an aircraft professionally appraised? There are many reasons but here are some of the more important ones:
Do you provide "Desk Top" Appraisals? The signed reports provided by Plane Data, Inc. require an on site examination of the aircraft and its maintenance records. The "desk top appraisal report" has been used by companies and individuals who typically do not possess the knowledge, skills and abilities to do the job properly. Desk top reports involve little more than looking up a number in a book. There is no examination of the aircraft in question, no review of the log books and no report detailing the contents and condition of the aircraft. The information derived from this analysis cannot be substantiated. A "desk top appraisals" is not the best tool to use when securing your collateral and justifying your lending position.
Common Misconceptions This is a "Good" Customer and there is no need for an appraisal. The need for proper documentation has little to do with the credit worthiness of the customer and more to do with properly documenting the collateral. Would the bank require an appraisal for real estate of the same value or simply waive that requirement? If the customer is that "Good", then there is little need to file a security agreement with the FAA or use the aircraft as collateral. There are countless examples where an aircraft was used as collateral but when the loan when into default and the bank attempted to repossess their collateral, there was no aircraft to be found or the aircraft was not worth the value of the loan - not even close. The "dot-com" failure is an excellent example. On paper, each of these businesses would have been considered to be "Good" customers but very few are still in existence today. Customers change over time and your "Good" customer today could be a "Problem" customer tomorrow. Although customer relationships are important, it is equally important to understand the collateral being used so that informed lending decisions can be make with minimal risk. We perform our own appraisals and there is no need to have someone else perform them. This implies that the bank, who has a financial stake in the deal, has elected to take on the liability of evaluating an aircraft that they most likely have never seen. Banks are extremely good at understanding the economics behind a loan but understanding the market value of a specific aircraft after examining the log books and maintenance records should only be performed by someone who is impartial to the deal and certified by an industry recognized association to perform the analysis. If legal questions arise regarding the value of the aircraft, the banker would be in a poor position to address these issues without some type of independent appraisal report. The customer already has an appraisal. It is more likely that the customer has a market analysis or "desk top appraisal" and not a certified report. There is a world of difference between the two. The Certified Appraisal Report documents the condition, contents and value of a specific aircraft based upon an on-site examination. The Certified Appraisal Report is a legal document developed by an independent third party. The market analysis typically provides a number that cannot be substantiated. We use a published guide or customer supplied printout from a website. There are several problems with this approach beginning with the fact that the individual determining or providing this information typically has a vested interest in the deal itself. In addition, the use of this type of information provides only general information at best and does not address the evaluation of a specific aircraft. This is due to the fact that each guide or website presumes a certain set of conditions (equipment, time on the aircraft & engines, etc.) that typically do not represent the aircraft in question. In fact, one printed publication clearly states that the publication is intended to be used as a guide ONLY and it cannot be used to appraise a specific aircraft. Second, much of the material is copyrighted and cannot be used for commercial purposes. There is a difference between simply obtaining a number (any number) and understanding the collateral that the bank is lending against. When appraising an aircraft - ANY aircraft, the NAAA standard appraisal process examines over 75 different value points (the number approaches 100+ on twins). Obviously some of these value points are more important than others but the typical published guide can only examine a small fraction of these which should make anyone wonder what items aren't being considered and what is the impact to the aircraft's value for overlooking them.
Other Documents of Interest
Plane Data, Inc. Contact Information
Additional Information Can be Found HERE.
Given situations such as the Cape Town Treaty, changes in FAA regulations, changes in the marketplace, etc. it is difficult for banks to stay on top of current news that may impact their aircraft lending decisions. For this reason, Plane Data, Inc. issues a newsletter that informs clients of the industry. To sign up, simply check here or on the button below. 
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