Anyone thinking of buying a new aircraft from overseas?

[SSCBD]

Quote  - Westpac is forecasting the Australian dollar to rise to 80 US cents over the course of 2021.

 

by - Prashant Mehra - AAP - Thursday, 31 December 2020

[skippydiesel]

Good oh!

[old man emu]

What would happen to the US dollar if civil war broke out on 21st January?

[skippydiesel]

1 hour ago, old man emu said:

What would happen to the US dollar if civil war broke out on 21st January?

Yeah ! - anythings possible in that dysfunctional non union.

 

If it did happen, the likely brick like fall of the US$ would probably only have a benefit (to us) for a very short window, which would likely close due to much of  industry/supply lines shutting down . The exception would be those supplying the respective combatants.

[old man emu]

2 minutes ago, skippydiesel said:

The exception would be those supplying the respective combatants.

And that's not a load of Krupp.

[Yenn]

When I bought the engine for my RV4 the Aussie dollar was worth  US$1.04

Eighty cents is still a bit low and the reason our government likes to have a low dollar is that all export deals are in US$s.

[rgmwa]

The dollar was at $0.82 US when I ordered the first of my RV12 component kits some years ago and thought that was about as good as it was likely to get. Wrong! It kept improving as time went on, and like Yenn, I also got the engine at $1.04 so overall the exchange rate worked out quite well, although not as good as a fellow builder who started a couple of years later than I did and ordered the whole kit in one go at $1.10. Those were the days!

[skippydiesel]

38 minutes ago, Yenn said:

When I bought the engine for my RV4 the Aussie dollar was worth  US$1.04

Eighty cents is still a bit low and the reason our government likes to have a low dollar is that all export deals are in US$s.

True but what so many forget is that we are an importer of equipment that is also in US$ and therefor relativly expensive - the grain farmer that sells competitively buys his header & tractor at a disadvantage . I have always thought the whole concept of artificially keeping the AU $ down is a bit of smoke & mirrors economics.

[Thruster88]

2 hours ago, skippydiesel said:

True but what so many forget is that we are an importer of equipment that is also in US$ and therefor relativly expensive - the grain farmer that sells competitively buys his header & tractor at a disadvantage . I have always thought the whole concept of artificially keeping the AU $ down is a bit of smoke & mirrors economics.

A successful farmer exports far more product than they have to import, machinery, chemical, fertiliser and fuel. We like a low dollar.

 

If all these Soar aircraft come on the market we won't need any new ones for a while.  

[poteroo]

Notwithstanding the possibility of a good 'buy' with a higher exchange rate - the other importation costs have really blown out. Checkout your seatainer costs, insurances, breakdown and packing costs, customs and other duties, relevant taxes, then getting it onto the register here isn't cheap.  There's a lot of hassle and worry with doing it yourself, and perhaps the best way is to engage with an established shipper/consolidator group. 

[spacesailor]

A successful farmer AND exporter don,t do much for our Domestic market, only to give us second grade overpriced products.

Look at those  crayfish !, I refused to buy one at any price, when they couldn,t get their overseas market, they expect our domestic consumer to 

Fill their bank account.

spacesailon

[facthunter]

OFTEN our BEST is exported and we get the $#!T that's left over or imports. The little crays I eat (on a special occasion) come from Canada. Think about what has been happening with our LNG. When ore prices drop they mine more to keep cash flows effectively selling it under priced. You only dig it up ONCE. Nev

[Kyle Communications]

Very rough rule of thumb is whater the price in US$ is the purchase price then basically double that and you have the price in aussie dollars landed everything paid

 

US$125,000   at .72Cents was about AU$240,000 by the time you get it in the hangar

 

[Jerry_Atrick]

When the AUD was high, I was looking at importing GA aircraft into Aus; the model being that it would be sold as ready to fly - conversion to VH register which would have included a new annual, upgraded avionics, refurbished (not necessarily new) interior and if required,  and a bare metal respray. It sounded fanciful, but at the time, the used SEP (SIngle Engine Piston) and twin GA aircraft market was depressed all over Europe. This was mainly because EASA was allowed to run riot under Patrick Gordeaux, who had something against GA and interpreted a request to harmonise regulation across the member states as to also harmonise regulation between all forms of GA - including private flying with CAT (RPT) to the point they were seriously proposing to require certified flight data recorders (and possibly cockpit voice recroders) in aircraft over 1,000kg MTOW.

 

Under EASA, the costs shot up overnight as well as  burdening restrictions which further increased costs. For example, all twin aircraft were banned from operating into or out of an unlicenced aerodrome despite having safely operated like this for years. The result - added landing costs and handling fees. They wanted to do away with the UK IMC Rating - which was only valid in the UK, despite the enormous enhanced safety it provided. Oh, but if you wanted to do a full IR, you required ATPL theory - all of it! (that has since changed to some effed up system to save face). Result - 18  months of theory study with very expensive books or even more expensive classes.. as well as a massiver delay in getting your IR.

 

Your aircraft had to have an annual maintenance and a separate annual review certificate (ARC). The ARC was just a wad of paperwork and had to be carried out by your CAMO (Certified Aircraft Maintenance Organisation). This additional paperwork added about £2K to the annual - some for paperwork and some for the CAMO insurance covering their liability because, they didn't necessarily have to be the shop that did the work - in fact the ARC and the annual could occur at different times.

 

Also, in the UK, as most major airfields are privately operated or coucil operated on a profit basis, landing fees and parking charges became more expeinsive due to upgraded EASA reg requirements. Shoreham charges something like £30/landing (I am talking PA28 type a/c), Bristol - £54, Fairoaks (where I operated from) £28, although we had an annual landing card. I can't recall Blackbushe, where I last operated from, but would think it would be minimum £25..

 

It all added up and as the UK, France, Ireland, Spain, Germany, and I think Portugal and Austria are in a recipricol agreement where LSAs and I think Microlights from each country can enter the other country for a max of 30 days at a time without prior permission, there was no difference for the average PPL in going to LSA or microlight as they already had their flight radio telephony licence, nav and controlled airspace checks (it is different here anyway; I think you have to do the latter two as part of your national licence here). The only difference for some was that they couldn't fly in IMC in the UK.. something that has since changed.

 

So, PPLs were switching to LSAs in droves and cashing in their SEPs for LSA material as these were still not too extravegently priced. The result is there were very good GA SEPs with low hours at knockdown prices. As this coincided with the AUD being at all time highs in living memory, I hatched a plan to export these aircraft to Australia. So, I started looking into the economics of it all. Export CoAs from the UK were a doddle.. From memory, all it was, was a piece of paper than confirmed it was on the UK register (with all the numbers) and a charge of £10 as long as it had a current UK CoA. I looked at the aircraft for sale on the Aus market - many were what I would call high time - greater than 5,000 hours... often more than 6,000 hours in the airframe, with higher engine times as well. In Europe, there is still, in relative terms, a plethora of airframes on the market at 3,500 or less... I would say the frequency distribution bell curves turns upward at about 2,000 hours and starts to flatten out on the downward side at about 4,000 hours. If you coudl get a Swedish aircraft, which was also going through the same thing (EASA members include non-EU states), you were pretty well assured a decent aircraft - they hangar them all in heated hangars and only fly them on nice days... almost.

 

The idea was to export and convert to the VH register ready to fly - so with an annual and upgraded avionics. Also, the interior and exterior would be refurbed as required to bring it up to scratch; and if the engine was over 1,000 hours, we would have considered zero timing it (assuming it hand't been overhauled already). These would be factored into the buying price.  The idea was for about the same price or a little more than what appeared to be clapped out galopies on the Aussie market, you could have a very tidy aircraft with around 1/2 the hours and better avionics and be confident that you weren't buying a lemon. In fact, we were looking at also providing a warranty (limited).

 

As an example of the aircraft that could be had at the time, a mate of mine picked up a '79 Warrior II with about 800 on the zero-timed engine with an OK paint job an leather interior - slightly aged for £18K. The paint was faded and there was some minor corrosion - that cost him £6K. to fix to a decent standard ... The avionics had a Skymap III (outdated), but dual 8.33KHz coms and a Mode S ADSB Out (all Garmin). Airframe had about 3,500 hours on it. For £21K, he had himself a very tidy aircraft and it has been relatively trouble free. Another mate of mine bought himself a tidy C177 for about £32K -  had to spend £4.5K on a new exhaust... It does look a little dated, but flies beautifully. Avionics were pretty much the same as the PA28 (although it may have had a GNS430). I have no idea of the hours it had when he bought it, but I would say he does over 100 hours/year and his last annual in November has it at 4550 hours (thanks to G-INFO).

 

The plan, however, came unstuck for two reasons: 1) We severly underestimated the cost of the work involved in converting to the Aussie register. If we did all the work to spec here, crated it to Aus disassembled and had a local shop inspect, put it together, add the parts requires (e.g. brakes, gaskets, etc which have asbestos.. and a couple of other things), my god they knew how to charge. The going rate for a LAME equivalent in the UK was about £50/hour.. it was about $150/hour in Australia from memory. Even at the lowest value of the AUD, that was an eye-watering rate. I checked a couple of LAMEs in Aus and they were all about the same. It meant that Aussies would pay a bit more but we still thought it was not a bad idea. We did search Europe for a VH registered LAME; there are plenty of US, SAF, and even a couple of NZ.. but we couldn't find an Aussie LAME in Europe to do the work at much better rates.

 

The second reason is that, as I worked at an investment bank, I got the FX traders to give me their forecast of the AUD. The pricing curves on the swap rates and futures didn't look good, and we figured that as we were getting to be a profitable business, the FX exchange rate would move against us and make that business model unviable.. It turned out the markets were correct and it wasn't long before the AUD headed from $1.43 to the £ to something like $1.70... Again, it wasn't insurmountable, but made it that much harder for presenting a case of buyung one.. especially as the Aussie LSA/Microlight scene is also a lot more vibrant than when I had originally left Australia.

 

The GA SEP market has improved thanks to, despite years of official UK protestations, Europe listened to France and booted Gordeaux out of the EASA, replaced him with Patrick Kye and under the DGAC (French CAA), oversaw changes that reduced a lot of the burden and cost in a face-saving way - so could have done better. Also, I forgot to mention, but EASA reqired avgas to have VAT applied in all European countries.. so for the UK, it raised the cost of fuel by 20% overnight - people are now used to it. Also, the higher performance LSAs and even the Microlights seem to be a trifle expensive to purchase these days, and people are saying £30K for a PA28 or £70K for a PS28/Bristell... they'll take the PA28 and use the difference in proceeds for fuel and maintenance - for the average PPL, that will be many years of flying and the PA28 will probably be around when the PS28 has given up the ghost..

 

Consequently, demand has slightly increased for GA SEPs.. not so much twins. With COVID, most people were expecting prices to plummet,  but, like Aus, they have firmed up and there is not that much on the market. Good Warriors of the 1980 mark are asking £40K now.

 

I have been thinking of offering a European sourcing service for Australia where do the pre-inspection, provide a comprehensive report and list of recommended improvements, purchase (review logs, handle all the legals, etc), we get it all ready and disassembled, ship it, clear customs in Australia, and the Aussie owner only has to get his LAME to put it back together, add the missing consumables and issue the VH CoA. And we would warrant it is in exactly the condition as described all the way to the point oif the AUssie LAME getting his or her hands on it. But I doubt there would be a big enough market to scale it to be viable. The idea would be more about lower times, better aircraft for your money.. those extra operational hours turn into $ anyway.

 

Another thing to think about when importing a GA a/c from the US, is my guess is there will be a few US registered LAMEs about.. Why bother converting to the VH register? Run the thing on the N reg.. All you need is a piggy back licence (maybe).. unless AUs prevents it (EASA tried to stop it for a/c based in Europe > 2 years.. Germany and the UK revolted... ) My last shareoplane was N reg and apart from having to pay an annual trustee something like £400, it was easier on the maintenance wallet by far.. and is far cheaper to import.

 

 

[Jabiru7252]

Has anybody read the last post in its entirety?

[pmccarthy]

Yes I have. Very interesting. A friend imported a lovely Bonanza from the USA when the A$ Was strong and did very well, but only because he is a LAME and did all the work himself.

[Bruce Tuncks]

Enlightening stuff Jerry. All good reason for Brexit I reckon. Now could be a good time to lobby over there for more sensible regulation.

I reckon South Africa has better aviation regulation than the EU, and after reading your stuff, I am even  more convinced that the EU has gone the nasty overly-bureaucratic and expensive way.

I have seen  plaintive letters from German sailplane manufacturers apologizing for charges brought on by this nastiness.

[old man emu]

Yes, a good summation of the European market situation and throws light on the complications caused by bureaucracy in the name of "public safety". 

 

It amazes me how airport operators can put such ridiculous charges on permission to land a plane, especially in Australia where the airports were often created before 1950. Do those councils which own the airports charge a fee to motorists who drive on the roads maintained by local councils? Not on your Nelly. 

 

Maybe COVID will give these avaricious councils a wake up call. Can you imagine the fall off in many airport movements simply due to COVID movement restrictions?  

[spacesailor]

YES 

Thank you Jerry.

That explains why my  cousin & partners, (  all aged ) took an axe, and chopped up their Cessna for scrap metal.

Gave flying away, but I don,t know if they got rid of their boat, (  moored ar the Norfolk Broards ) that they took over to Europe for a months holiday annually.

spacesailor

[Jerry_Atrick]

I should be very quick to say that Part M Lite (I think the Lite is how the Eurocrats spelled it to look more friendly) has reversed a lot of the damage - but not all.

@spacesailor- your cousings & partners reminded me that during that period,people were scrapping their aircraft and selling the parts for more than they could get for a whole plane. People were also buying aircraft for the engine as it was cheaper than an overhaul... and scrapping the rest (often the avionics were obsolete).. Again.. thanks to the EU mandating we needed .8.33 khz spacing rather than the 25hhz spacing in radios because of the concetration of airfields, ground stations, aircraft etc.That is despite the fact that the US has much higher concentration and still manages to do well out of 25khz spacing. Just another expense for no gain (I bet a sibling of a Eurocrat scored themselves a job as an avionics salespersonor something).

 

@Bruce Tuncks- thanks... though I still think the SAF reg of having differences training for each model of aircraft is a bit daft.. Apparently (and someone please correct me if I am wrong), you need an endorsement for each model (not necessarily variant).. so ifyou can fly a C152 and want to fly a C172, you need a separate endorsement. I am sure EASA at the time would have relished that if they thought they could get it through.

 

@pmccarthy-  For VH (or G) reg, being a LAME has a distinct advantage. Mind you, with the more expensive marques, it can pay to send a LAME over to the US if you have a number of examples to look at it can still pay well... because the price difference is bigger between Aus and the US (although the percentage ofprice difference may be the same).

 

@Jabiru7252 - Yeah - I did go a bit into the European background - but I think Europe (inc UK) can be a good source of low time good quality aircraft for Australia - More about value thought... their times cane be half od that in Aus and the US which gives a much longer service life.

 

@old man emu - despite the UK government's rhetoric that it wants Britain to tbe the best country in the world for GA, sadly its actions prove otherwise and my guess is councils would be glad to be shot of the airfields. I would expect in the years to come, save for a revolution in fuels to hydrogen and/or electric, more UK planes will come o the market as the country slowly disintegrates private flying in the UK...