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National Aviation Day - A Look Forward
December 1903 marked man’s first true attempt to conquer the skies. Since then, we have flown passengers to every edge of the globe, gone supersonic and walked on the moon all in the last 115 years. So what will the next 50 years of progress look like?
Today is National Aviation Day!
December 1903 marked man’s first true attempt to conquer the skies. Since then, we have flown passengers to every edge of the globe, gone supersonic and walked on the moon all in the last 115 years. So what will the next 50 years of progress look like?
Supersonic Flight
As I type, there are men and women working to bring sustainable and efficient supersonic flight to both commercial and business aviation. Sure, the Concorde made the hop from JFK to Heathrow at twice the speed of sound, but it was never really economically viable. Aerion Supersonic has teamed up with Boeing and GE to produce a supersonic business jet (SSBJ) that is slated to enter service in 2025
Aerion AS2
Space Travel
Cities like Houston, Texas are already investing huge amounts of money into a future of space travel. The long-term goal of Houston’s Spaceport and facilities like it is the idea of orbital or sub-orbital travel. In a future where we have a safe and effecient way to get into low earth orbit, trips around the globe that currently take 15+ hours on air carriers can be completed in a little over an hour. Not to mention, trips to further locales, like Mars may become more routine.
Houston Spaceport
Urban Air Mobility
Uber has made it clear that they intend to take to the skies to provide air connectivity high above the traffic on the streets below. It may seem far-fetched until you understand that Boeing, Embraer ,and Bell Helicopter (to name a few) are all heavily involved in the research and development of the program. This project aligns with a similar objective to bring electric turbines to the aircraft market - promising a quieter, greener, more reliable alternative.
Uber Elevate
The Future of Aviation is Bright
Aviation has always pushed the boundaries of what is humanly possible. With a new onset of fresh ideas and creative vision, the next generation of flight is well underway. No matter what the future will look like, I know aviation will continue to be at the forefront of innovation and continue to make the world a smaller, more connected place.
Cameron Tipton, ASA, ARM-MTS
Author:
Cameron Tipton, ASA, ARM-MTS
accredited senior appraiser
appraisal review & management - MTS
What is Appraisal Review? (and why it's important)
Appraisers provide critical valuations across every industry. What are the safeguards against erroneous reports? Who is keeping the industry in check? Let’s explore the behind-the-scenes truth of the appraisal practice and what it takes to be an appraisal reviewer.
The Credibility of an Entire Profession
Appraisers of all disciplines perform a critical role in the financing, insuring and transacting of all sorts of assets. While appraiser’s do not create value in the assets they appraise, they do form the bedrock of how entire industries understand (and perceive) their monetary worth. As such, the responsibility of an appraiser to perform their job diligently is critical; errors can be catastrophic. So who really gets to decide whether an appraisal is valid? After all, everyone has an opinion about what something should be worth. Luckily, in the United States we have the Uniform Standards of Professional Appraisal Practice (USPAP as we call it in the biz). There is a long history to the creation of USPAP that revolves around a need to standardize the methods that appraisers use in reaching value conclusions to enhance the overall credibility of valuations that the public relies upon. This standard provides a minimum construct that accredited appraisers MUST adhere to when doing effectively anything that relates to valuation services. USPAP does a great job in providing appraisers broad flexibility in how they approach individual appraisal assignments while issuing a framework for ethical and professional standards that one should uphold. Ultimately, it is the adherence and certification to the adherence of these standards that allows the public to trust the valuations they use daily. Now that there is an understanding of why all appraisals should be credible and valid, let me explain what happens when they simply, aren’t.
Appraisal Review: Structured Oversight
Just as USPAP provides structure to those writing appraisals, it also provides the standards for reviewing someone else’s appraisal assignment. This is know as Appraisal Review. Let’s say a particular asset finds itself in the middle of a legal dispute (no fault of its own), and the prosecution hires an appraiser to determine the value of said asset, in this case, let’s call it a Gulfstream G650. Maybe this appraisal is 2 pages long with little explanation of how this appraiser reached their value conclusions and it also comes out $9 million higher than an appraisal that was ordered by the bank one year prior. Reasonably, this appraisal might be called into question and a designated Appraisal Reviewer would be engaged to review the assignment. This review might be purely for verifying compliance with USPAP or it may include an opinion of value, if the reviewer is qualified to provide an aircraft appraisal. The reviewer would review the work and produce a report that explains (in heavy detail) any issues that were identified. Not only does this aid the jury in understanding how much weight to apply to that appraisal but it could result in having a misleading report removed from the case entirely.
More Training and a Higher Standard
The American Society of Appraisers (and most appraisal organizations) has a path for senior appraisers to become appraisal reviewers. In the ASA it requires completion of two 30 hour appraisal review and management courses with comprehensive exams as well as approval from a board of examiners. This allows those appraisers to review the work of other appraisers within their discipline (in my case that is “Machinery & Equipment”) for USPAP compliance or to issue an opinion about the actual value conclusions if they are equipped to do so (longer story for another day). These reviewers are called upon to continue to assure the public that the appraisal profession as a whole is not only credible but that there is oversight for instances where there may have been a shortfall. After all, entire industries depend on us.
Author:
Cameron Tipton, ASA, ARM-MTS
accredited senior appraiser
appraisal review & management - MTS
Graveyards, Hotels, & Bars - The Truth Behind Aircraft Retirement
Retiring an aircraft out of service is a complicated decision, but for some, it’s a welcome moment. Let’s take a look at some of the most impressive uses for aircraft that have left the sky for good.
planes spend their life safely transporting people across the globe, but what happens after the last flight?
We talked about what puts perfectly good airplanes out of service, forever, but what happens to them once they’re grounded? Like everything else in aviation, it depends. The primary factors relate to the specific aircraft and the life left on the components and the activity of the remaining fleet - who has any use for the parts? Let’s say a high-time Pilatus PC-12/45 had a hangar collapse on the tail and it ripped the aft section of the plane in half. So we have a dramatic case of physical deprecation with some functional depreciation to seal the deal: the insurance company '“totals” the plane. However, in this case there is an active need for PC-12/45 parts and components so everything from the prop, engine, avionics and interior pieces can be sold to serve the remainder of the active fleet.
Let’s say the same scenario happens to a 1968 Beechcraft Queen Air. Odds are, it’s going to cost you (or your insurer) money to get rid of these parts. The avionics are obsolete, the engines have been out of production for over 30 years and it will cost more to harvest the metal than you could possibly gain from its sale. This means it’s going to the salvage yard. You may be familiar with aircraft “boneyards” where hundreds of aircraft are left sitting in the desert, their final resting place. Unfortunately, without some diligent planning retiring an airplane can be surprisingly expensive.
It isn’t all doom and gloom, occasionally, there are more innovative solutions for the hull like turning it into a cocktail bar, a house, or using it on a movie set!
El Avion
Manuel Antonio, Costa Rica
747 Wing House
Malibu, California
Jumbo Stay Hotel
Stockholm Arlanda Airport
727 Fuselage Home
Manuel Antonio, Costa Rica
If you own an older aircraft you may have wondered about what possibilities lie beyond the sky for your airplane. Clearly, the sky is not the limit, however, you may not be interested in opening a hotel in your retrofit Lear 35! If you think your aircraft may be approaching retirement it is probably a great time to speak with an expert that can help plan the next steps, because if there is one consistency in aviation - surprises are rarely good. Our team of aircraft appraisers can be a great resource for really getting into the numbers to truly understand the economics impacting your specific aircraft.