PART 135 CHARTERS | PART 61/141/SEVIS FLIGHT SCHOOLS | PART 145 MRO's:
(By Dean A. Kantis | M/A Aviation Consultant | The Jet Network)
PART 135 | PART 91 DRY LEASES:
Purchasing or Selling an Aircraft: Differences Under Part 91 vs Part 135 Charter Operation:
Selling an Aircraft Operated Under Part 135: If you’re selling an aircraft that’s been used in Part 135 operations, the process is similar to selling any aircraft, but there are specific factors to consider due to its commercial uses that apply to Part 135 and Part 121 that do not apply to personal aircraft uses under Part 91 operations. If you're serious about selling or purchasing any Aviation Company, kindly reach out to The Jet Network, Inc. team so that we can provide an "Estimate of Evaluation" to give you a more accurate market timing evaluation of the business so that you can educate yourself on the data that we use daily when consulting any M/A aviation company: Dean A. Kantis | dk@thejetnetwork.com | 754-234-9993.
Understanding The Aircraft’s Value:
Aircraft on Part 135 certificates are often maintained to higher standards than those under Part 91 (private personal use), with rigorous maintenance schedules and documentation. This can increase the aircraft’s value, as buyers value the transparency and upkeep. However, heavy use in charter 135 operations might mean more flight hours or cycles, which could lower the value compared to a lightly used private aircraft. Get a professional aircraft consultant that knows Part 135 and Part 91 requirements to make sure that you purchase the right aircraft and that it will conform to much higher Part 135 requirements and that it can be even eligible to D085 conform under Part 135 charter, and hold out to the general public. Buyers, when searching for a specific aircraft use, should make sure their broker or consultant is experienced with both 135 and 91 operations and uses to ensure their client doesn't waste their time and investment purchasing an aircraft that isn't able to conform for their needed operations. Also, please take in to account whether or not the aircraft will eventually be utilized from Part 91 uses to evolve to eventual Part 135 operators, dry leases to other private individuals, or be utilized with fractional ownership programs. Highlight the aircraft’s compliance with Part 135 requirements, like equipment upgrades (e.g., TCAS, EGPWS) or recent inspections, any logs missing back to the born date, missed Airworthy Directives (AD's) or Service Bulletins (SB's), accidents or incidents, etc.
Proper Part 135 Documentation "Must Haves:"
Part 135 aircraft must have meticulous records, including maintenance logs, airworthiness directives (ADs), service bulletins, and inspection histories. Buyers will scrutinize these, so ensure everything is organized and up-to-date. Provide the aircraft’s Part 135 operations specifications (OpSpecs) if it’s listed on a certificate, showing approved uses (e.g., passenger, cargo, or specific regions like the Caribbean). Include proof of compliance with Part 135 maintenance programs, such as a Continuous Airworthiness Maintenance Program (CAMP) for larger aircraft or annual/100-hour inspections for smaller ones. If you are purchasing an aircraft that is already on another Part 135 Certificate, then it has already gone through this forensic conformity review and should easily be able to be brought over to another Part 135 charter and easily conform.
Handling The Part 135 Certificate Connection:
If the aircraft is listed on a Part 135 certificate, you’ll need to coordinate with the certificate holder (if it’s not you) to remove it from their OpSpecs before the sale, unless the buyer plans to keep it on the same certificate. The FAA must approve the removal or transfer, which involves paperwork through the local Flight Standards District Office (FSDO). This can take weeks or even many months, sometimes longer depending on how busy and backed up the FSDO is, so plan ahead. Buyers may ask for a “D08 Conformity Check” to ensure the aircraft meets Part 135 standards for their intended use. Be ready to facilitate inspections or provide recent conformity reports.
Part 135 Legal, Escrow & Closing Considerations:
We always recommend using an American Oklahoma Aviation Escrow Company to protect both parties during either the aircraft or Part 135 ownership transaction. The buyer will likely want a pre-purchase inspection, which is standard but critical for any Part 135 aircraft due to their commercial history. Consult a tax advisor about potential sales tax or depreciation recapture issues, (100% Depreciation Bonus is supposed to come back in 2025), especially since Part 135 aircraft may have been depreciated differently than Part 91 aircraft. Ensure the aircraft is free of liens or leases, as Part 135 aircraft are sometimes financed through complex agreements tied to charter revenue and have the usual "exit points" that provide for 30, 60 or 90 days written notice in taking the aircraft off of the D085. For the Part 135 entities, that own and control the 135 certificates, accreditations, operations approvals, aircraft and 119 staff approved, there is a detailed due diligence period of reviewing the entire operation to make sure the entity is clean, the FAA FSDO shows this 135 in "good and active" status, and there are no LOI's "Letters of Investigation." There is a methodical process that we utilize for our clients to ensure the buyer and seller have a successful closing and that there are no surprises.
Purchasing or Selling a Part 135 Certificate Entity Correctly:
If you’re trying to sell the Part 135 certificate itself (the operating authority for charter services), it’s trickier because FAA regulations don’t allow direct “sales” of certificates. However, the FAA can't stop anyone from selling the corporate entity that owns and controls the 119 staff appointed, operation specifications, e. A Part 135 certificate is issued to a specific entity (person or company) and isn’t transferable or sellable on its own. The FAA views it as a grant of authority, not a commodity. Instead, buyers typically purchase the business entity (e.g., LLC or corporation) that holds the certificate, acquiring the certificate indirectly. This requires transferring ownership of the company, including its assets, liabilities, and FAA approvals.
Evaluations of Part 135 Certificate Entity:
The value of a Part 135 certificate lies in its operational scope (e.g., single-pilot, basic, or standard), the number of aircraft approved, which FAA FSDO based, and the regional operations it is approved to serve, (e.g., U.S., Canada, Mexico). A certificate with broad authority or multiple aircraft is more attractive because it's not limited to a single aircraft or single pilot. It also allows for more than one aircraft and several pilots which helps ensure that if 1 aircraft is down, AOG "Aircraft On Ground," that a 2nd aircraft and pilot team can fly that mission and not lose that customer and charter revenue nor have a bad reputation with the brokers who control many of the charter clients. Buyers also value clean FAA compliance records. A history of violations or accidents can make the certificate (and company) less appealing. Intangible factors, like existing client contracts or a strong reputation, add value to the business but aren’t part of the certificate itself. The staff of 119 individuals refers to the Director of Operations (DOO), the Director of Maintenance (DOM), and the Chief Pilot (CP). The pilot teams, along with an inside sales and dispatch department, all must work with the charter clients, their brokers, and the mechanics to ensure safe and successful operations 365/24/7. Empty Part 135 shell entities that only have a "clean and active" FAA approval, are usually anywhere from $125k (Single approval with a single piston or twin piston aircraft and limited USA 48 states approved to fly to), to $1.750m (10+ passenger seat jet aircraft approval with world-wide operations approved), depending on what their approvals are. If looking for a full Part 135 Evaluation, please contact The Jet Network Inc.
Steps to “Selling” The Certificate Entity:
The first step is to do your homework and make sure you only work with an experienced aviation M/A consultant that has closed a few dozen of these specific type of aviation certificate entity sales. By just going with any aircraft broker because they have aircraft sales experience and have sold hundreds of aircraft over the past 20-30 years does not ensure they know how to successfully help the purchaser or the seller of a Part 135 business. There are levels of complexities that are involved in the transitional process, and their lack of experience can result in a disaster for all parties and can even lead to a lawsuit involving the consultant. Succinctly put, escrow has to be set up correctly, along with due diligence items needed by the purchaser that any ethical and prudent seller would have no problem providing, along with the proper LOI "Letter of Intent" to start with before involving lawyers, and then the right mutually agreeable and unbiased Final Purchase Agreement or MIPA "Membership Interest Purchase Agreement" if a LLC has to be the draft that both sides work off of otherwise one side's legal consultant may make it so biased and one sided that it never will get past the redlining and edits of the other side and after months upon months, both sides fail, get frustrated, and terminate the deal terms and both sides each still have to pay their $30,000 USD legal bills even for this blunder. There is then the Post-Closing of the certificate entity, that has to be successfully planned out, agreed by the purchaser and the seller, and then the correct introduction with the new owner to be brought into the FAA FSDO team and introduced to the POI "Principal Operations Inspector," the PMI "Principal Maintenance Inspector," and the PAI "Principal Avionics Inspector." You should never let any of them know that you are asking for their blessing or permission for this transition of ownership and you should never word it verbatim that you "sold" or purchased" a certificate. Structure the deal as a sale of the company holding the certificate. This requires legal agreements to transfer shares or assets, and the buyer must notify the FAA of the change in ownership. The FAA will review the new owners to ensure they meet USA citizenship and management requirements (e.g., U.S. citizens must control majority 75% interests in the company, while a non-US citizen may only control up to 25% minority interests).
Merging of Part 135 Operations:
Some buyers merge their operations with yours, keeping the certificate active under new management. This still requires FAA approval to update key personnel (e.g., Director of Operations, Director of Maintenance, and Chief Pilot).
Prepare For FAA Scrutiny:
The FAA may treat a change in ownership as a new certification process, especially if key personnel or operational control changes. Buyers will want assurances that the certificate remains valid post-sale. Tapping an experienced M/A aviation Part 135 that has successfully helped close and transition dozens of Part 135s ensures the transition is "seamless" and they can also refer key FAA compliance consultants to help make sure you move your FAA FSDO to the correct FSDO near you if needed, evolve the 135 OpSpecs to a higher level, and/or refer key qualified 119 staff needed.
Part 135 Challenges:
Buyers are cautious because acquiring a Part 135 certificate entity means inheriting the company’s compliance history. Any past issues (e.g., fines, enforcement actions) could scare them off. Post-Covid world poses some new liable issues such as UCC filings showing SBA EIDL liens and loans on the business that are under that entity and if the new buyer does not know to look into the company's liens or corporate debts properly, or read the Balance Sheet correctly to see debtors owed, then the new buyer could potentially inherit all of these debts and liens. Again, working with an experienced M/A Aviation 135 Consultant that knows how to properly review the due diligence items for their sellers and purchasers ensures a "win win scenario" and a "seamless" transition. Make sure, make sure, make sure that you have a written and/or verbal agreement with the existing Part 135 119 Staff to ensure the day after you close on the entity purchase, that you have a 119 approved team in place and/or you have a transition plan one by one to transition one of them out at a time to your 119 staff. Failure to lock this very important detail down could result in a temporary or permanent suspension of your 135 operation and could even eventually lead to having your 135 certificate "revoked."
135 FAA Transition Process: Expect the status quo for the FAA staff to take longer than you would normally think it to take in the normal business world. So when you put in new changes, (e.g., changing out a DM or DO or CP or adding a new aircraft to the D085), expect to only get 2 changes approved about every 2 months or so and sometimes longer depending on how busy or backed up the FAA FSDO staff is when this new request is submitted. You also have Pilot Training and recurrent training approvals that take many months or longer. Usually to conform the same type of aircraft make and model that was already approved on the certificate in the past, would take about 2-3 weeks. However, conforming an entirely new make and model aircraft that has never conformed previously, should take a month and sometimes longer. A brand new aircraft usually conforms immediately as long as the 135 Certificate Operations Specifications (OpSpecs) allow for such aircraft. If instead, you decide to start a Part 135 Certificate from scratch, you will have to submit a PASI "Pre Application Service Intent," and be willing to wait 3,4,5 years or longer in the back of the FAA's national que waiting behind 1,000+ other PASI's ahead of you. Unfortunately, that is the FAA culture now in the year 2025, and due to the Covid vaccination requirements for mandating vaccinations, many good FAA POI's, PMI's, and PAI's quit and they are now short handed and attracting new FAA staff is very slow coming, so expect the unexpected delays.
General Tips For 135 Status:
Work with Professionals: Aviation brokers, attorneys, and consultants familiar with Part 135 can streamline the process and avoid costly mistakes. They’ll know how to market to buyers who value Part 135 compliance and understand the value already in place for what it took to get a 135 up and running, evolve it with more robust OpSpecs, keep it FAA clean and active, along with the team and aircraft approved. Working with any aircraft broker whom has not had sufficient 135 closing experience, whom has not learned how to manage the aviation attorneys, and whom has no idea of how to please both seller, buyer, 119 staff, and FAA FSDO POI, could lead in both sides spending in excess of $25,000 in legal fees and months wasted only to fail and not get to closing. The experienced M/A aviation consultants will have many suggestive colleagues that you can pull from who know what to do and how to do it for pre and post closing transition. They will be able to introduce you to their key consultants who specialize in Part 135 Compliance, evolving a 135 with the correct manuals, and all pre closing due diligence to ensure a "win-win" scenario for all parties involved, their teams, and to ensure the FAA FSDO team starts off on the right positive note.
Part 91 Dry Lease 135 Alternatives:
If selling the 135 Certificate is too complex, you could lease your aircraft to another Part 135 operator or wind down operations and surrender the certificate to the FAA. If your 135 Certificate is in "clean active FAA standing," and has no known liability, then I would not surrender or have the FAA revoke the certificate because there is a good chance instead to sell it for a nice premium to buyers that do not want to start a PASI and wait many years to be up and running but instead would like to purchase your 135 entity and get started bringing their aircraft and possibly their 119 staff on and commence Part 135 charter operations immediately. Sometimes instead, aircraft owners wish to utilize Part 91 "Dry Leases" which are capped to about 4 and maybe 5 dry leases in total. Pushing the envelope and going above this number or not setting up any of the dry leases to legally be in place, could cause you to be in big trouble with the FAA and there could be fines up to $11,000 per leg retroactively speaking. This is called illegal charter or aka "134 and a half, 134.5" in slang terms and is looked down upon. So make sure you know all of your options upfront, the details and investment involved to make sure it's legal, before commencing forward.
Part 135 M/A Aviation Attorneys:
Aviation and Corporate Closing Attorneys that specialize in aviation law are critical for structuring the sale to comply with FAA regulations and protect your interests. They handle legal documents, ownership transfers, and FAA notifications, double check liens on corporations such as PSP or SBA EIDL liens on the UCC for that corporate structure in that county they are tied to, ensure no open or past lawsuits that could "bite" the new owner inheriting the corporation and any and all legal liabilities. Another liability could be delayed tax filings and/or non payment of FET "Federal Excise Tax" or charter taxes (except when the owner flies on his own aircraft). These are extremely important details that you do not want to miss when purchasing the entity that owns and controls all of the Part 135 OpSpecs and finances. So make sure you have an experienced M/A Aviation Attorney to ensure that your corporate entity and certificate remains valid post-sale, and is clean. If not clean, that you are okay with any of those liabilities and that they were properly disclosed prior to the sale and closing. Lastly, selling a Part 135 business often involves transferring the entire company (e.g., LLC or corporation) to the buyer, which requires updating FAA records for the owner along with contacting the DOT and informing them of the change. Then for any 135 OpSpec changes, there has to be the proper method of navigating potential regulatory hurdles.
Mergers and Acquisitions (M&A) Firms Specializing in Aviation:
Part 135 Expertise: The FAA’s strict oversight of Part 135 certificates means your broker, attorney, or consultant must understand the 135 regulatory landscape. Ask for references from past Part 135 business sales to confirm their experience. Market Knowledge: The value of your business depends on factors like the certificate type (e.g., SINGLE, vs BASIC, vs STANDARD FULL UNLIMITED), number of aircraft, client base, and compliance history. Choose an experienced consultant that knows how to manage the attorneys, the transitional steps for this complex transaction, make sure that you have guaranteed 119 staff the day after closing (and any reputable seller would want this for you to ensure "clean FAA compliance"), and make sure that you have the proper post-closing transitional introduction to the FAA FSDO office that you are registered with. This experienced Part 13 M/A Aviation Broker or Consultant, must know how to do this as it's not as simple as "selling or purchasing an aircraft," and it's omnipotent that they quarterback this for trust of both buying and selling sides, and their separate lawyers. FAA Coordination: The sale often requires FAA approval, especially if ownership or key personnel changes,(e.g., Director of Operations, or Director of Maintenance, or Chief Pilot, or change of FAA FSDO offices, or adding a new Aircraft conformity on to the D085, etc.). You or your 119 team should know how to work with your local FSDO to avoid delays or certificate issues and be able to work with the seller's existing 119 team to properly structure the clean and seamless transition. Valuation Skills: Part 135 businesses are hard to value because the certificate itself isn’t transferable, but its corporate entity that owns and controls the operational scope and assets (aircraft, leases, contracts) are. Your experienced M/A aviation broker or consultant should factor in intangibles like client retention and the time saved versus applying for a new certificate (often 3+ years). Lastly, if you are thinking of starting a Part 135 from scratch through a PASI "Pre Application Statement of Intent" you must know that the FAA national que for submissions has an estimate 1,000'ish PASI's ahead of you, and that's not counting all of the Part 141 and Part 145 start ups. Plus, once being worked, they hand off to the local FSDO or an adjacent FAA FSDO regional office and that's who you report to. That FSDO may be backed up already working with other existing operators of 135s, 141s, and 145s. So you must factor in an unknown X-Factor for time as it may take 3-5 years to start any of those from scratch given the current landscape and lack of FAA staff to support the current demand. You may be better fit purchasing an existing entity that already has all or most of the OpSpec approvals you need, and then simply "evolve" it. The positive about this is that you can immediately start flying Part 135 charter vs waiting for 3+ years or more and you would lose out on all of the building of your charter business that 3+ years would make. So the real question is "how much is it costing you having the aircraft, DO, DM, CP, Pilots, Office & Hangar Lease, and Aircraft Costs costing you monthly sitting" on the ground vs being up and flying and growing your charter clientele and broker network?! Charter Brokers are a big part of this industry and usually have the upper hand with their charter clients. Typically, Charter Brokers charge 5-10% of the sale price, or instead lock in a "Net Spread" of the entire charter quote.
PART 61 & PART 141 SEVIS FLIGHT SCHOOLS | PART 145 MRO's:
Part 61/141/SEVIS:
Starting the application process and submitting that application for a Part 141 Flight School vs starting a Part 61 Flight School can be rather arduous and tenuous. First, factor in that the FAA is backed up over 3+ years and has a very slow process in hiring new federal employees, training them properly, and then having them support existing POI's "Principal Operation Inspectors," PMI's "Principal Maintenance Inspectors," and PAI's "Principal Avionics Inspectors." Just remember, everything takes time with the FAA and will never happen as quickly as you want it to, so factor in that there will be delays, delays, and more delays. If you are wanting to hold out to the international students, then the SEVIS "Student Exchange Visa Information System" is the additional approval that you will need so that your Flight School can "sign off" VISA's inhouse for the international students. If however, you only wish to serve American USA students, then really you may not need 141 or SEVIS and starting a Part 61 from scratch or purchasing an existing Part 61 Flight School may be your best value and immediate option preferred. Evolving a Part 61 to a Part 141 Flight School could take many years and then evolving it to adding the SEVIS approval could take 3+ years. So please factor this in when considering starting or purchasing any corporate entity that owns and controls a Part 61 or Part 141 Flight School. Make sure you have the proper M/A Aviation consultant or broker that has adequate experience in making sure you are protected. Please see the above section on Part 135 suggestions that also apply for purchasing or selling a Flight School. Purchasers should make sure they are an American USA citizen and/or if not, they can purchase minority 25% interest and appoint an American USA citizen with majority 75% controlling interest.
Part 145/MRO:
The same rules apply as above. The "Capabilities List" shows you what aircraft maintenance approvals a certain Part 145 MRO "Maintenance Repair Overhaul" shop or repair station has been approved for by the FAA. If you are wanting more than those shown on the Capabilities List, then you would need to submit the proper changes to have your registered FAA FSDO review and hopefully approve so that you can then be approved to evolve your MRO to work on all of those maintenance items, avionics, and/or engine overhauls. Purchasers should make sure they are an American USA citizen and/or if not, they can purchase minority 25% interest and appoint an American USA citizen with majority 75% controlling interest.