PlaneTorque Australia Pty Ltd Professional Aeronautical Consulting & Auditing Services

ABN 23 104 977 942 PlaneTorque January 2014 Issue 52

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elcome to the 52nd issue of PlaneTorque. In this issue, we

take a look another bush fire in Beechboro and Aircraft Pre-purchase Reviews and the importance of records in this process.

Fire in the Burbs! Fire Attack Choppers – Great work

We have not had a good year with fires this 2014 season. This one (03.03.14) was close to us, about 0.5 km away in a direct line. A nature reserve goes up in flames and smoke again. It is too soon to judge actual cause but I will not be surprised to here is was some poor misunderstood kid being a complete tool!

My sincere thanks to all involved in fighting this and many other fires this season.

QANTAS How many jobs would this save?

Has anybody considered how much could be saved by QANTAS if they wound back the discounted airfares for staff and their immediate families? Which flows on past retirement. 10% standby fares (All classes) but catch is its on “Standby” so it is hard to plan a holiday. Also heard that after long service kicks in at 8 years employee gets two round world business trips FREE. I do not expect any current staff to view this suggestion as anything but an erosion of their conditions of

employment and resist it vigorously. But need I remind them that another Australian iconic airline ANSETT went to the wall due to its inability to deal rationally with its ever growing overheads. P.S.: I do not claim to have any solid data on these perks, just picking up on internet scuttle-butt.

Pre-Purchase Reviews Why all the fuss?

I took a call from an seller (Unknown to me) of an aircraft last week where he asked me what I thought “As Is” meant in so far as buying an aircraft was concerned. He found my name on the internet, took a quick look at my web site and thought I might be wise in the black art of such matters as I sold aircraft.

Well I had to put him straight first of all about selling aircraft. Yes I have helped a client sell a very small Light Sport Aircraft some years ago now but it’s not really my thing. I do of course do and have done related projects covering valuations, pre-purchase reviews and CoA issues. So back to the basic question, what did I understand “As is” to mean when it comes to selling an aircraft? You normally here this expressed as “Where Is/As Is”. The “Where Is” part hopefully doesn’t need much explanation as long as the seller clearly states the “Where”. "As is" is the real issue here. Most people I have dealt with understand this means the aircraft's technical status is as shown in supporting

documents (Log books etc.) and that the buyer has, as part of his pre-purchase review process very carefully looked at these critical documents for any upcoming scheduled maintenance, current defects and maintenance history.

This would/should include ground runs, an acceptance flight, a careful inspection of ALL system oil filters and engine compression checks (Piston engines) or power assurance checks (Gas Turbines).

Of course I would personally expect a seller to advise a buyer where the seller knows a component has limited life remaining to overhaul/inspection (Normally done by presenting buyer with log books or computer tracking reports). This then enables the buyer to negotiate a offer price taking into consideration these matters and general condition etc.

To sell an aircraft with known defects that would make it un-airworthy without clearly identifying these to a buyer would not be reasonable and it would be illegal under CASA legislation. However not all defects are evident at time of sale even for factory new aircraft (ie: An internal failure or impending failure). In this case it was stated ".... an aircraft mechanic has failed some components requiring a costly overhaul.". Let me offer a few possible scenarios/personal opinions: a) Component failed by LAME due to time to run to overhaul expired (TIMEX BEFORE or AFTER sale consummated) - Buyers problem assuming seller gave access to log books and/or Computer tracking reports before sale.

PlaneTorque Australia Pty Ltd Professional Aeronautical Consulting & Auditing Services

ABN 23 104 977 942 PlaneTorque January 2014 Issue 52

Page 2 of 3

b) Component failed by LAME due to obvious external defect - Buyers problem assuming seller gave access to helicopter for pre-purchase review and seller pointed out this defect in the aircraft records (Maintenance Release endorsement minimum). c) Component failed by LAME due to a scheduled or unscheduled inspection finding an internal defect - Buyers problem and part of normal aircraft ownership.

The following is interesting: http://legal-dictionary.thefreedictionary.com/caveat+emptor Caveat Emptor

[Latin, Let the buyer beware.] A warning that notifies a buyer that the goods he or she is buying are "as is," or subject to all defects.

When a sale is subject to this warning the purchaser assumes the risk that the product might be either defective or unsuitable to his or her needs. This rule is not designed to shield sellers who engage in Fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular product. It merely summarizes the concept that a purchaser must examine, judge, and test a product considered for purchase himself or herself.

The modern trend in laws protecting consumers, however, has minimized the importance of this rule. Although the buyer is still required to make a reasonable inspection of goods upon purchase, increased responsibilities have been placed upon the seller, and the doctrine of caveat venditor (Latin for "let the seller beware") has become more prevalent. Generally, there is a legal presumption that a seller makes

certain warranties unless the buyer and the seller agree otherwise. One such Warranty is the Implied Warranty of merchantability. If a person buys soap, for example, there is an implied warranty that it will clean; if a person buys skis, there is an implied warranty that they will be safe to use on the slopes.

A seller who is in the business of regularly selling a particular type of goods has still greater responsibilities in dealing with an average customer. A person purchasing antiques from an antique dealer, or jewelry from a jeweler, is justified in his or her reliance on the expertise of the seller.

If both the buyer and the seller are negotiating from equal bargaining positions, however, the doctrine of caveat emptor would apply.

I think most folk in our industry would consider a buyer, under normal circumstances (Heaps of assumptions here), to be behaving unreasonably if a year after buying the aircraft it was considered defective by an inexperienced (On type) LAME and expected the previous owner to cover the repair costs under an implied warranty. Of course this might be the result of some non-aviation legal type giving the new owner flawed advice (At $550/hour). I would be interested to hear from any of my readers if they wanted to put in their two bobs worth here. Who thinks the buyer is being unreasonable (If what little you read here is true)? Who doesn’t - why? For the record this event DID NOT involve an export/import CoA process and even if it had that would not preclude the need for a thorough pre-purchase review. In fact I reckon it

becomes even more important. However even a well carried out review cannot find defects that are lurking in a component that only become evident after a years worth of flying.

PlaneTorque Australia Pty Ltd Professional Aeronautical Consulting & Auditing Services

ABN 23 104 977 942 PlaneTorque January 2014 Issue 52

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PTA Newsletters Back Issues

Back Issues of PTA Newsletters can be found at www.ptaaus.com.au/news and www.issuu/com/tq2jetman .

PTA Services A very brief review of the services

offered by PTA

• Certificate of Airworthiness issue o Please refer www.ptaaus.com.au

for limitations. o No seat limitation applies

• Export Certificate of Airworthiness issue.

• Special Flight Permits when associated with CoA’s

• Audits • Safety Management Systems • Pre-purchase reviews • Valuations • Investigations • Project management • Off wing powerplant

management • Technical writing – MEL’s,

SOM & MOM’s

What The! Where-What-When?

Answers in next months issue.

Issue 51’s photo was taken at Jandakot airport here in Western Australia. This FAA registered Grumman Goose (I think) was awaiting an Import CoA (Not from me though).

Interesting www’s You might find some of these useful

and/or interesting

www.glossary.aero

www.teamviewer.com

www.airtools.com

www.amroba.org.au

Now for the small adverts section. Most currently have a Safety or Standards flavor.

More details on each @ PTA’s web site. SMS-ProTM

SMS-ProTM is a web based; complete Aviation SMS that fully supports ICAO, FAA, Transport Canada & IS-BAO

compliant SMS requirements. PTA is a registered SMS Partner.

SMS-ProTM is a registered trademark of NorthWest Data Solutions of Alaska, USA.

Air Maestro® is a leading web-based aviation software application offering an integrated SMS & FRMS

designed around CASA/CAA/ICAO requirements. http://www.airmaestro.com.au

PTA is now an Air Maestro® Consultant.

So you think you are SMS ready or even compliant with international standards. Or perhaps you simply want a better way of inducting new staff or re-enforcing safety

management on a regular basis with your existing team.

I encourage you to take a few moments to visit IATSI’s web site via the link below for more details.

You will not regret it. http://www.ptaaus.com.au/sms-training-by-iatsi/

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