On April 21st, Southwest Schools Board Member Ed Vesely served as copilot on a B-17 aircraft at the Gulf Coast Salute Airshow at Tyndall AFB in Panama City, Florida.
Mr. Vesely, Senior Sales Director at Welsch Aviation, is a seasoned pilot with 40 year’s flying experience. He is also a respected member of the Board of Directors at Southwest Schools and continuously provides valuable insight and guidance to our district.
Mr. Vesely is one of the few people that are lucky enough to fly the aircraft known as “The Flying Fortress”. Primarily used as a military plane in WWII and then as a civilian aircraft for several years after, there are currently only 12 of the 12,731 originally produced, flying today.
Jim Welsch was President and Partner of Welsch Aviation until 2014 continuing as a Partner until his final flight. Jim began his career in 1960 at a firm founded by his father in 1949 and together they pioneered the aircraft brokerage business. Jim built upon the corporate aircraft legacy of his father through sales of DC-3s, Convairs, Lockheed Jetstars and subsequently the full product line of Gulfstream aircraft which enabled Jim to grow Welsch Aviation’s aircraft brokerage business. Over time, he expanded the reach of Welsch Aviation to include four offices across the United States. Jim led Welsch Aviation through the jet age and six decades of sometimes-turbulent air in the aviation business. This dedication allowed Welsch Aviation to be the original and most respected aircraft sales and acquisition organization in the United States.
James C. Welsch, Jr. was born in Cincinnati, Ohio on October 12, 1935 to James, Sr. and the former Effie Mae Bowser. The senior Mr. Welsch, a pioneer of aviation, and his wife welcomed their new son into their family and three months later took him up in an open cockpit, single engine bi-plane for his maiden voyage in the skies.
After graduating from Hofstra University Jim married Gail A. Samuelson of Great Neck, NY. Soon afterwards he began his active duty service as a volunteer in the Army. He joined his father’s aircraft firm at the end of active duty, a move he said, “…was good fortune, the right place at the right time.”
Jim Welsch is survived by Gail, his wife of 58 years, his daughter Kristin and her husband Matthew of Amagansett, NY, daughter Leslie of Huntington, NY and his two beloved grandchildren, Kate and Kamden.
In lieu of flowers, donations can be sent to the Little Shelter Animal Rescue, Post Office Box 1805, Huntington, NY 11743 or The American Heart Association.
Of the five World War II Curtiss SB2-C Helldivers that still exist, only one is airworthy. Edward Vesely, SBA ’79, is one of only two pilots qualified to fly it.
Vesely, the senior director of sales for Welsch Aviation’s Houston office, is flying in air shows throughout the country, giving spectators the opportunity to see, hear, smell and touch a piece of history. While he calls it an honor, a privilege and a responsibility to fly the Helldiver, his background makes him uniquely suited for the task.
The son of a U.S Air Force mechanic, Vesely was 11 when his family moved from Ohio to Michigan, where his father took a job with the U.S Department of Defense assigned to the Warren Chrysler Tank Plant. Living one mile away from (then) Big Beaver Airport at 16 Mile and John R roads, Vesely would ride his bicycle to watch airplanes on the weekends. His “ramp rat” tenacity paid off when he stumbled upon a 1940 Piper J-3 Cub, abandoned and in disrepair, and set about restoring it back to flight in what he called the “ultimate father-son project.”
Now a resident of Texas, Vesely and his wife and fellow pilot, Carole, still fly the Cub for fun. “In addition, my wife and I use our Beech A-36 Bonanza for domestic travel and support for our corporate jet sales business,” he said. “When your vocation and avocation merge it can make for a satisfying and rewarding career and life.” That certainly seems the case for Vesely, who carved out a career in corporate aircraft sales with his bachelor of science in business management/economics and lifetime love of aviation.
Vesely started flying light WWII-type aircraft early in his flying career. He and his wife of 36 years met as flight instructors in Pontiac, Michigan, and moved to Houston in 1980, shortly after Vesely received his degree from Oakland University. From there, Mitsubishi Aircraft hired him as a sales/demonstration pilot, followed by the launch of his career as a jet broker for the sale and acquisition of corporate aircraft. During that period, he began volunteering with the Lone Star Flight Museum and its WWII flying collection. This led to the invitation to fly the Commemorative Air Force (CAF) West Texas Wing’s Helldiver in 2005.
A carrier-based bomber produced from 1943 to 1945 for the U.S. Navy, the Helldiver was not always loved by its crew. The “Big-Tailed Beast” was considered underpowered, more difficult to maneuver and, in the Battle of the Philippine Sea, 45 were lost because they ran out of fuel returning to their carriers. Yet 7,140 Helldivers were produced, and they were heralded for delivering bombs and depth charges with pinpoint accuracy. Helldiver squadrons contributed greatly toward winning the war in the Pacific.
Although he has flown many WWII-era warbirds, including the Grumman F6F Hellcat, Grumman TBM, P-51 Mustang, B-25 Mitchell and S2 Tracker, his favorite is the Helldiver.
“As far as the mechanical aspects of the airplane, it is a very enjoyable airplane to fly. Roll is very light, pitch is medium in pressure and the rudder is extremely heavy,” said Vesely, his direct voice ticking off the principal axes. “We don’t deploy dive brakes, as we have to respect the fact we are flying a one-of-a-kind airplane that is 70 years old.” The CAF does, however, allow opportunities for flight enthusiasts to take a historic flight in the Helldiver to experience the thrill of a lifetime facing backward in the gunner’s seat.
Vesely said that because of his Oakland University education, his satisfying career in corporate jet sales and extensive volunteer work, he has traveled to five continents and enjoyed associations with people at all levels of society.
“These experiences have helped me to recognize the importance of quality education which led me to such a vast array of opportunities,” he said.
Through his educational leadership as a board member of Southwest Schools, a local charter school in Houston, and involvement with the CAF in perpetuating living history, Vesely hopes to help the next generation understand the importance of education and the role that history serves. When young people can honor the lessons of “The Greatest Generation” and experience living history, perhaps they will better understand how to avoid errors of the past.
“History doesn’t come alive until you see it alive,” said Vesely. “That is why we fly these aircraft.”
The Pre-Purchase Inspection of Your Jet:
What to Look Out For
In private jet sales, the pre-purchase inspection is the critical time when the aircraft is scrutinized and reviewed for sale. It is the penultimate step before the aircraft is accepted and delivered to the buyer.
After the purchase agreement has been signed, the pre-purchase inspection is conducted. This is because the correction of discrepancies, often referred to in the purchase agreement as rectification, uncovered in the pre-purchase inspection is agreed upon in the purchase agreement. It is standard for the seller to be responsible for airworthy and operational issues while cosmetic items are typically forgiven. A typical pre-purchase inspection for an executive aircraft such as a Gulfstream or Dassault Falcon takes three to five weeks including discovery, correction of discrepancies, and return to service.
What Does It Involve?
The pre-purchase inspection has two main components: (1) the physical aircraft inspection and (2) the aircraft records inspection. All aircraft are not the same. The pedigree of an asset has intrinsic value. An aircraft without logbooks of sufficient detail is worth significantly less than the same aircraft with proper records. For instance, Bob Zuskin of Jet Perspectives in Herndon, Virginia believes that a Gulfstream G550, under 10 years old with no logbooks, would be worth approximately 50% of its normal value. If the aircraft was even older, the depreciation could be up to 95%, he added. In a standard transaction, the records inspected include logbooks, maintenance history, damage history, and relevant FAA forms. These FAA forms include 8110s, 8130s, and 337s; these encompass airworthiness to major alteration or repair. The value of the aircraft depends upon whether these forms exist in the records of the aircraft. Their absence can make the aircraft un-airworthy or worse, devalue the aircraft. A manufacturer-authorized inspection facility will check for complete documentation. It will also check that all Airworthiness Directives (ADs) and Service Bulletins have been adhered to. Typically, the seller assures that ADs and mandatory Service Bulletins with compliance dates on or before the day of closing will be satisfied.
The scope of the physical inspection of the aircraft varies by make and model. It is tailored to the components and age of the aircraft. A manufacturer-authorized maintenance facility knows exactly what needs to be covered. Typical checks include the airframe, the engines/APU, the avionics suite, the systems, and an interior and exterior cosmetic review.
Undisclosed damage history discovered after a sale will come back to haunt the new owner either at the time of the discovery or when he tries to sell the aircraft because it devalues the aircraft. For this reason, it is vital to inspect every logbook entry as well as perform due diligence on the aircraft because sometimes, damage history is not explicitly revealed in the logbooks. There have been instances where damage history was covertly hidden amidst the copious logbook entries and even totally excluded!
There are two avenues when choosing the inspection location: (1) an independent shop, (2) or a manufacturer-authorized service center. Holding the inspection at an authorized service center offers the honed expertise of personnel who deal with your aircraft make on a daily basis. Furthermore, fixing discrepancies covered under warranty, or otherwise, may be accomplished without having to move the aircraft. Independent shops, while less expensive, might not know the common historical problems of the aircraft in question and offer no warranty service. Additionally, the seller must be cautious with independent shops because those unfamiliar with a jet and its particular systems and nuances can be more prone to breaking items. In our view, manufacturer-authorized service centers with a proven track record are the way to go.
We heard of a situation where an independent shop was power washing the engines on a Global Express. Rather than mixing water with the cleaning detergent, the shop mixed water with adhesive. This ruined the engines. Two brand new engines and $14M later, the aircraft was ready to fly again! Another unfortunate time, a shop took the forward galley out of a jet that shifted the CG so far aft that the aircraft’s nose wheel raised into the air and the tail struck the ground.
After the results of the inspection are submitted to the buyer, they will either: (1) reject the aircraft, (2) accept the aircraft as is, or (3) accept the aircraft pending rectification of discrepancies per the purchase agreement. If the aircraft is accepted, whether pending rectification or not, the deposit becomes non-refundable. At this point, the closing is imminent.
Check back next week for insight on the acceptance, closing, and delivery of the aircraft.
Private Jet Sales:
The Letter of Intent and Purchase Agreement
The letter of intent (LOI) and purchase agreement are the two formal written arrangements between the buyer and seller in the aircraft sales transaction. A buyer indicates serious interest by sending an LOI to the seller. The LOI is step one in a transaction and structures the deal. The purchase agreement is a legally binding sales contract that must be reviewed and carefully agreed upon by all parties involved. The LOI is to the proposal as the purchase agreement is to the wedding.
The LOI is a concise document of engagement which may or may not be legally binding in your respective state. Typically, for the absence of doubt, we explicitly state that it is not binding. The LOI lays out the framework for the transaction. Standard points include the purchase amount, a clear title status, the airworthiness and operational status of the aircraft, and the timeframe for both the pre-purchase inspection and deposit placement. Sometimes, we will receive an LOI which has been written by the buyer which addresses specific “what if” instances. While these particular callouts are useful when those instances do occur, an experienced broker knows that it is more useful to make generalized statements that encompass even more than the “what if” instances. It is not uncommon to omit a prudent statement at a later date. You might ask, “If the LOI isn’t binding, then why even have one?” Because it encourages the buyer and seller, who are engaged, to work together in a timely manner to place a deposit, work out a binding purchase agreement, and carry out a pre-purchase inspection.
The purchase agreement is often the most time-consuming and complex nut and bolt part of a deal. It is the user manual for the transaction, ideally covering all possible scenarios in black and white. Elements that must be addressed include price, deposits, closing details, contingencies, delivery, title transfer and warranties, taxes, pre-purchase inspection and verification of equipment, aircraft condition and modifications, and the state of jurisdiction. The best advice is to seek professional guidance, with an accountant, aircraft attorney, and broker to assist in the many facets of the transaction.
The most consequential contract verbiage pertaining to the physical aircraft is the terms and conditions of the pre-purchase inspection of the aircraft and the logbooks, where most of the value sits. The location, duration, scope, and resolution of discrepancies should be addressed. If the inspection does not take place in a flyaway state, (where there is no sales tax on airplane sales) then the aircraft must be moved where a closing would occur in conjunction with a title & escrow company and the FAA. We routinely give the buyer ample time to inspect the aircraft and examine areas of their choosing, thereby reducing risk on the seller’s part. In virtually all contracts, the only warranty surviving after closing is the clear title. This is because of the “AS IS” clause which states how, after closing, the purchaser is responsible for the care and custody of the asset.
Next week, we will discuss the pre-purchase inspection in detail.
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What Do You Need to Know Before
Buying Your Private Jet?
The world of executive aircraft sales is an especially difficult market to grasp with numerous factors driving a price point on the order of millions of dollars. Over the next few weeks, we will walk you through the steps needed to get you flying.
Why Use a Broker?
Developing a relationship with a professional broker is an essential requirement in buying your jet. An experienced broker knows all the market intricacies and will make buying your new business tool a delight rather than six months of headache and possible overpayment. Motivated individuals might think they can acquire their jet by themselves without a broker’s guidance. But, there are traps for the unwary that must be avoided in the acquisition process.
Suppose there is a used aircraft listed for sale at $10M. The avid, unrepresented buyer researches the internet and calls around the published listings for similar aircraft. Be aware professional brokers often mingle and share that they have interest in their listings. Due to the calls from the prospective buyer, the brokers believe that there is interest in their listing, but are unaware this market activity is all from one buyer. A false market is created, and the $10M aircraft that would have sold for $9M (by negotiation) is now going to sell for $9.5M because of the perceived market demand increase. The buyer has unknowingly overpaid by half-a-million dollars for his aircraft. Using a broker can help prevent misfortunes like this and others. With proper representation, you will be provided with a current and complete scope of available aircraft worldwide, allowing you to select the best aircraft that suits your mission profile.
Pedigree, damage history, and logbooks. Avionics, accoutrements, and engine/airframe care plans. These are only a few items to navigate that, if not properly investigated, can result in millions of dollars in consequences and reduced residual value. Combine these risks with the lack of published sale prices that no individual’s research can uncover, and it becomes clear why three-quarters of transactions are completed with representation on both sides.
A professional broker does way more than help you find the best airplane. There are several steps in the acquisition process which must be completed. A proper letter of intent must be written, negotiated, and signed. Then, a complete purchase agreement must be drafted and reviewed by all parties involved. The logbooks of the aircraft must be scrutinized. A pre-purchase inspection is next; the location of the maintenance facility as well as the scope of the inspection, specific to the aircraft, must be chosen. The findings of the inspection must be negotiated. The proper FAA title paperwork and closing must be arranged. Finally, the delivery must be organized.
Hunter Weiss, President & Partner, Welsch Aviation, shares his Business Aviation market observations
To gain from their vast industry experiences, AvBuyer interviewed Hunter Weiss, President & Partner of Welsch Aviation, Inc. for his thoughts about the current state of Business Aviation…
According to a Chinese proverb, “If you would know the road ahead, ask someone who has traveled it”. In the profession of brokering business aircraft, few practitioners have traveled more miles than the associates at Welsch Aviation. Founded over 67 years ago by James C. Welsch, Sr., a sales professional for venerable companies such as Aeronca and Stinson from the late 1920s and for Cessna immediately following World War II.
Welsch Aviation began its current brokerage business with a single office at LaGuardia Airport’s Marine Air Terminal in 1949. Before there were business jets—fully a decade before the Gulfstream G-I turboprop entered the corporate scene—Jim Welsch was brokering converted military and airline aircraft, such as Douglas C-47s, Consolidated Convairs and Lockheed Constellations to corporate America. US Steel purchased its first company aircraft, a modified Lockheed Lodestar, utilizing the services of Welsch Aviation in the early 1950s.
As a candidate for the US Presidency in 1960, John F. Kennedy was provided access to a Convair 240 that Jim Welsch brokered to his father, Joseph P. Kennedy.
Named after JFK’s daughter, the “Caroline” was the first aircraft to be used by a presidential candidate and continued to serve the Kennedy family until 1967.
As Welsch Aviation grew—its operation currently includes offices in Washington, DC, New York, Georgia and Texas—management transitioned to James Welsch, Jr. In 1987 K. Hunter Weiss joined the firm as an Associate, in 1996 became a Partner, and assumed the title of President in 2014.
Hunter, based out of the headquarters office in Washington, DC, is also a member of a venerable line of Business Aviation professionals. His father joined Welsch Aviation in the early 1980s following a number of years as a US Air Force fighter pilot and extensive experience with corporate aircraft manufacturers. Continuing his family’s commitment to aviation, Hunter devoted his career to the concept that business aircraft are essential tools for business development. Supporting Welsch Aviation clients, he practices an in-depth and straightforward approach to professional representation.
Others at Welsch are passionate practitioners of aviation. Robert Hart, Senior Director of Sales in Welsch Aviation’s Georgia office has enjoyed success in the sales arena for almost 40 years. Moreover, Senior Director of Sales Edward Vesely manages Welsch Aviation’s Texas Office as his day job, yet finds time to fly the only operative Curtiss SB2C-5 Helldiver in airshows for the Commemorative Air Force. The least tenured of Welsch’s brokers has 23 years of service with the firm.
Since its inception, Welsch Aviation has engaged solely in brokering a client’s aircraft. The firm neither buys nor holds inventory, focusing instead on securing exclusive contracts to be the client’s representative. No funds are exchanged until a transaction occurs; Welsch Aviation assumes the risk that its efforts on behalf of its client will result in a successful sale.
All aspects of the process are managed by Welsch’s team of experts. Among its four offices, Welsch handles between one and two dozen engagements simultaneously. The typical period for a sale to be consummated is about 180 days. Most of Welsch’s relationships are repeat business, and new clients typically are referred from its existing customer base. The firm is proud of its tradition for reliability, integrity and hands-on dealing with its clients.
Hunter Weiss is confident that Business Aviation will remain a vital aspect of a corporation’s transportation solution. “There is always going to be a need for business aircraft,” he told AvBuyer, recently. “The Scheduled Airlines do not serve many city pairs—in fact only one-fifth of the airports that entrepreneurs typically need to reach.
“After 67 years supporting the Business Aviation community, our firm has seen many cycles. The current cycle appears to be an overcorrection. We feel that the loss of residual value currently being experienced will shrink. The need for a business aircraft is real and growing.
Just consider the difficulty of servicing and growing a corporation’s market without the advantages that business aircraft offer. There are many companies that would not have been successful without the use of Business Aviation.
“Admittedly,” continued Hunter, “the brokerage business has become more complicated as we conduct searches and evaluations of every type of aircraft throughout the globe to find the exact make, model, avionics suite and accouterments for our clients. We deal with many experts, from accountants to tax specialists to aviation lawyers with experience in domestic and international transactions. Pre-purchase inspections that once required a day or two now consume several weeks. Business Aviation has matured, and our capabilities have grown to meet the challenges.
“In particular, Welsch faces the challenge of differentiating our firm from the dealer community. Being a broker is not the same as being a firm that sells either its own inventory and/or a client’s aircraft,” observed Hunter. “Being a pure broker is in fact the antithesis of the dealer-broker. We feel there is a conflict of interest when a dealer represents inventoried and represented aircraft, even if the firm has the best of intentions.
“We take our tag line—‘A higher plane since 1949’—very seriously,” he concluded.
A Tampa, Florida native, Kevin is a fourth year student at Georgia Tech where he studies Aerospace Engineering. He is an avid pilot with single engine land, sea, and instrument airplane ratings. He recently worked at the Honda Aircraft Company as an engineer in the acoustics and structural methods departments. Additionally, he spent a summer working as an A&P Mechanic apprentice at renown seaplane shop, Amphibians Plus, in Bartow, Florida. Kevin has a keen interest in private jet sales and will learn the ropes of the industry during his time at Welsch Aviation, focusing on client acquisition and marketing. Kevin joins our Herndon office near Washington D.C. where he is eager to explore the restaurants and coffee shops unique to the district.
Welsch Aviation recently launched a comprehensive rebranding campaign which featured:
- An redesign logo and brand image
- A new tagline: “A Higher Plane Since 1949,” which reinforces the company’s competitive positioning of being the premier aircraft broker since its founding
- A revamped website which reflects the firm’s new brand image