What would you say about tariffs and how
they've affected some of the transactions
that you've been around?
Initially, you know, people were very
confused on what's going on.
I actually had two separate transactions
I was working on at the time,
which were both
cross-border transactions.
One in Europe and the other one was in
South America and both
transactions just halted.
The party said, "We're confused. We don't
know what's going on.
We'll revisit this in Q3, Q4."
Welcome to Own the
Jet by Aspen Aero Group,
where we share perspectives from some of
the leading voices in private jet
ownership and business aviation.
I'm your host, Derek Savage, along with
my co-host, Jason Spoor,
president of Aspen Aero Group.
Our guest today is Netta
Raglin from Aero Law Center.
Netta helps protect jet buyers during the
process of purchasing
an aircraft and is a
strong advocate for educating clients on
the opportunities and
pitfalls of jet ownership.
Join us as we dive deep into the
mechanics, mindset, and moments that
define jet ownership.
And together, we'll learn
what it takes to own the jet.
Welcome, Netta Raglin to Own the Jet.
So, Netta, you are an attorney in the
aviation space and deal
specifically with all things
aviation as opposed to all the other
things that you could do as an attorney.
Yeah, exactly. So, my experience solely
is in aviation, which
means that I do a lot of
aircraft transactions, mergers and
acquisitions with aviation companies,
working with certificated
companies such as charter operators,
repair stations, and
then also litigating in all
aspects of that. So, yeah, focus on
aviation, my firm, all the
attorneys, that's all we do.
So, if I'm in the situation where I'm
wanting to own the jet,
right, and, you know, let's say I
want to buy, you know, a global or
something like that, 10 plus million
dollar jet, why do I need
to work with somebody that is aviation
specific? What's the purpose for that?
It's really important to work with an
attorney that's experienced
with aircraft transactions
specifically. The reason for that really
is that, you know, it's
unlike any other asset or personal
property that you're purchasing. They are
a huge investment, you
know, for the most part.
And also, they're incredibly regulated.
So, it's important to work with a
experienced aviation
attorney that, first of all, knows how to
structure the ownership of that aircraft,
how to structure the operation, depending
on what you plan on
doing with the aircraft.
Again, it's highly regulated, especially
with operations. So,
you have to be careful
with how, you know, what you're doing
with that aircraft.
Otherwise, you'd get a very scary
letter from the FAA and have to call me
anyways. But, you know, I
think the complexity of the
transaction itself, because we're dealing
with such an interesting
and different asset that,
you know, you don't find in real estate a
lot of these issues, and
the fact that there's so much
regulation behind it, it's important to
work with an experienced
attorney. Also, I've found,
and I've worked with, you know, on the
other side, if I'm
representing a seller or a buyer,
if I'm working with an attorney on the
other side who is not
an aviation attorney,
typically, and I don't want to make a
general statement, but typically,
the transaction runs a
little bit less smooth.
You spend some time trying to educate.
Exactly, exactly. And we're, you know,
going back and forth on
a point that, you know,
as an aviation attorney, you know that,
well, that's standard in a purchase
agreement. You know,
there's not much we can do about that,
but you have to argue
with the other side and
kind of just makes the road a little bit
bumpier. So I would say the most
important part is to have
a, to clear out all of those roadblocks
is working with an experienced aviation
attorney to navigate
all of the parties that are involved. And
that's another thing, you
know, when you're doing a
aircraft transaction, you have several
different components to it.
If there's financing involved,
you're dealing with a lender. There's a
whole host of loan
documents that an experienced
aviation attorney can look at and
negotiate key points that may be
important to you that you
wouldn't even think of. You know, for
example, is there something
in the loan documents that,
you know, restricts some of your
operation of that aircraft? And maybe we
want to rework that. For
example, if there's certain regions that
you can't fly to, but
you're planning on flying there,
you know, that's, that's something to be
mindful of. Then you have
your technical side of things.
So making sure if you're representing the
buyer that they're taking
it to the correct repair
station or MRO to do that inspection, to
have a solid pre-buy
inspection. So you have your
technical team and then you have escrow,
you know, you want to make
sure title is clear. And then if
there is issues of title, your
experienced aviation attorney can, you
know, clear that up and fix that
up for you. So it's, it's more so of, I,
you know, an aviation
attorney will have the experience of
knowing what to look for and what to
anticipate before it happens. Whereas a
real estate attorney
or an estate attorney or, you know, your
in-house counsel may just
not be very much aware of that
or even the regulations around it all.
Nice. Now, Jason, as a broker, you've
probably worked with
attorneys quite a bit. Oh yeah. Yeah.
Well, again, you know, going
into buying an airplane, we're
looking at LOA, LOIs, right? So we're
going to start with that and
that's going to be an attorney
driven function. And then move it in
there. We're going to next work on a
purchase agreement, right?
Yep, exactly. Yeah. And the earlier you
have these key component
pieces in place in the process,
it's going to be a smoother transaction
for sure. And you mentioned
the LOI phase and people think,
oh, it's a non-binding one pager. What's
the big deal? But I'm sure you've
experienced this as well,
but that LOI really sets the tone for the
entire transaction.
Exactly. And it's important to get
that right and make sure you're covering
the right commercial terms.
Because if you don't agree
on the pre-buy or the deposit or when it
goes hard, you're going
to have a hard time through
the entire transaction. Agreed. Yeah. You
run into situations
where it's like the LOI,
like they're not agreeing with it and it
just blows the whole deal up
before you even get started?
Yeah. I mean, I've had a few situations
where I was not brought in
or engaged by the buyer until
we were at the pre-purchase inspection,
the APA phase. So they
already had an LOI executed,
but the LOI didn't actually provide
acceptance rejection
rights. So it didn't say that,
and this is something that I always would
want to negotiate
beforehand. What are the expectations
of the parties? From a buyer's
perspective, my expectation would be that
I would like to have
agreed upon work scope for my pre-buy,
where I can take a look at
the condition of the aircraft,
open up panels if we negotiate that, look
for corrosion, whatever might be. Totally
reasonable stuff. Absolutely. Yeah. If
you're going to pay that
much for aircraft. You want
to make sure it's in the condition it's
in. Kick in the tires a bit.
Exactly. So that's key. You
have to agree on that. Also, the second
piece of that, which was
missing in this particular LOI
that I'm referencing, was what's the
procedure after the pre-buy? Typically
for a buyer, I would
like to have an acceptance rejection
period where once you do the inspection,
you get the inspection
report, and the buyer has the ability,
depending on how significant
the findings are in that report,
to walk away from the deal. Makes sense.
If we're talking about an aircraft that's
riddled with corrosion, and being in
Florida, we see it
quite a bit. Yeah, sure.
The value of that aircraft just
completely, it's not the value that you
wanted to buy it at. So you
either renegotiate the purchase price, or
you can reject it and move
on. Anyway, so this particular
LOI didn't have any of that in there.
Okay. And so now we're at the pre-buy
phase. They're trying
to negotiate the APA. The buyer is now
pushing to put that into
the APA. The seller is saying
absolutely not. The APA is the purchase
agreement? Is that
right? That's correct. Yeah,
aircraft purchase agreement. So that's
why it's important to
hammer out those very important
details from the beginning. And it really
is setting
expectations. Sure. How did you get
into this field? How does somebody find
themselves being a partner? I'm a
partner, yes. I'm a partner
at Air Law Center. In an aviation
specific law firm in Fort Lauderdale. So
the short answer is,
I fell into it. Okay. It was the perfect
moment where luck meets
preparation and hard work.
I was interviewing all over the place
looking for a law firm to
land at. And I happened to find
Air Law Center that was looking for an
associate attorney. I went on the
interview, didn't realize
that aviation law was even an area that a
lawyer could practice in. I
didn't have that much, you
know, knowledge about aviation, except
for the fact that I like
to fly around and travel.
Right, right. Exactly. So besides that,
my knowledge of
aviation law was very limited.
And I decided to go on this interview. I
ended up landing the job.
And ever since then, I've
been practicing aviation law with Air Law
Center and loving it. And
now I have such a passion for
it. I love business aviation
specifically. I love working in this
space. The people that I work
with are great. It's a very small
industry in a way. So you get to know
people, faces constantly.
Yeah, it just so happened that I joined
the firm. I was an
associate attorney at the time.
My founding, the founding partner was
there. We had one paralegal
and became, you know, kind of
worked up the ranks in the firm and
became partner. And now we
have about eight attorneys
total, two of counsel and a staff of 15
total. So we've certainly grown. Yeah.
That's awesome. Yeah. So if I'm looking
to own the jet, right,
if I want to buy a jet,
am I reaching out to you guys directly?
Or is it my broker that
reaches out to you? Or like,
how do I even get in touch with Arrow?
You know, it's a mixture. So
I think the simplest answer is
give us a call. You know, we do offer
free consultations. And
again, my firm, we handle
transactions, we handle regulatory work.
So you have trouble with
the FAA for any reason,
pilot actions, things like that. We've
worked with those. We also
litigate. So if there's any
kind of situation where you just have a
question about it, or you're
looking to buy an aircraft,
you don't know where to start, you can
give us a call. We do
offer a free consultation.
On the other side, if you are working
with a broker, I do work with brokers
constantly and they,
you know, bring a lot of buyers my way. I
think the important
thing is to just engage,
just get that process started as early as
possible. You don't
want to wait until the last
minute to bring in your lawyer. Yeah.
Well, you mentioned the
LA, right? So would it be
a good idea that like somewhere between
talking to like, hey, I'm
looking to buy, you know,
a challenger or whatever, prior to
signing anything, would
that be a good kind of like?
I think the perfect time to call me is
when you have identified the aircraft
that you want to buy.
Okay. Okay. I need to wire up. Yeah. I'm
in the gym. I'm deleting
Facebook. I'm lagging up.
We're gonna buy this plane. Yeah,
exactly. Okay. So if
you finance your purchase,
how important is it to understand what's
in the flight documents as
it pertains to your flight
mission? If, if, if you're going to do
the finance. Yeah. So, uh, with
financing, obviously you're
going to have a ton of loan documents.
You're going to have to
sign a bunch of documents with
the lender, the bank, whoever is funding
that. And those long loan
documents, it's going to have
pages and pages and pages of obligations,
you know, of what you have to do.
Maintaining the aircraft,
probably putting on a maintenance
program. They're going to require a lot
of things from you because
that's collateral that they need to
protect. But also in those lengthy loan
documents, you'll also
find things that you can't do with that
aircraft. Right. And basic
things are obviously don't fly
it into Iran, you know, things like that.
Oops. Right. So, you
know, definitely operating it
within the scope of the law, you know,
but it also, sometimes they
have, and I've seen this with
particular clients that I've worked with.
Some lenders will
actually restrict operations into
certain countries or areas. For example,
I had a loan document,
um, for a client that I was
reviewing that restricted his operation
in the Caribbean. And this
particular client of mine had
a second home in the Caribbean and his
plan was to fly there, you
know, every other weekend and
go to a second home. And the bank didn't
want him to. So that was
just in their standard form. I
don't know why, you know, they developed
these forms over time. So
I'm sure there was some sort
of instance where, yeah, so they put that
in there. They lost a plane
somewhere. Something happened.
Yeah, something happened. But when you
have someone kind of
looking over those documents
that knows what to look for and
understands what your operation, what
your intent is with that
aircraft, right? Um, you know, I'm able
to point those things out and
make sure that we go back to
the lender and kind of explain to them,
well, this can't go in
there because he's, you know,
explain the whole situation. And of
course, you know, they tell
you these are standard forms,
which for the most part they are, but
there are certain aspects that you can
negotiate. And that's
when working with aviation council makes
sense. Yeah. Because for real estate
lawyer looked at that,
you know, they wouldn't really know what
to do with it. They don't
actually know how to read
a loan document specific to aircraft. So
yeah, so that's a, that's
a good example of read that
document. I know it's lengthy. I know
it's boring. Well, and that's, that's
like people tell you
things are boiler plate. I mean, you see
this in all areas of the
law. It's just boiler plate
standard language. Go ahead and sign it.
Hold on. Yeah, because you
never know until you read a
sentence in there. That's restricting me.
Right. Right. Yeah. One
thing that's been on a lot of
people's minds lately has been the whole
situation regarding tariffs. That's
something that's like
new to a lot of people that are operating
in a lot of different
industries. And I can imagine
that it affects aviation quite a bit
because there's such large
sums of money being tossed
around here. Yeah, absolutely. So what,
what have you experienced or
what could, you know, in terms
of the people that you're working with,
what would you say about
tariffs and how they've affected
some of the transactions that you've been
around? There was so much
confusion around exactly what
was happening. You know, we all saw the
numbers were going up and
down and, you know, certain
countries were being hit and other
countries were kind of
sliding by. There was just a lot of
confusion around it. So I think that, uh,
in, in the industry, what I
experienced with my clients
that were in the process of purchasing
aircraft, um, and attempting
to import it from Europe or
South America or, um, even the Asian
markets was that initial
shock of, we don't want to pay a
135% tariff on this, you know, $10
million aircraft that we're purchasing
and importing to the U.S.
It's already a very expensive and complex
process. And then to throw
that wrench in there was kind of
shocking for everyone. Initially, you
know, people were very confused on what's
going on. I actually
had two separate transactions that I was
working on at the time,
which were both cross border
transactions, one in Europe and the other
one was in South America.
And both transactions just
halted. The party said, we're confused.
We don't know what's going on. We'll
revisit this in Q3, Q4.
We're not, we're not touching this right
now. So it did have an
effect on the industry. I think,
I mean, I saw it personally, uh,
firsthand. I do think,
however, now that we're sort of
past that initial shock and people are
sort of, you know,
looking into a little bit more,
reading up on a little bit more and
planning a little bit better, I think
it's softened. I think
the industry is, is getting comfortable
somewhat with the tariffs and our
understanding this may
just be the cost of doing business. Just
treat it like any other kind
of like additional tax fee,
whatever. Right. Yeah. I think also it
had an effect on volume
because, uh, what we, I saw was
a lot of those, like I said, I was
working in the Asian markets at the time.
Um, a lot of the Asian
sellers, you know, in China and India
specifically, which is a
booming business aviation industry
right now, a lot of, you know, those,
those sellers over there
just did not want to deal with
American buyers, you know? And so they
decided we're only going
to sell to, you know, anyone
outside of America, essentially, and just
not deal with the tariffs or
any of that. Um, so I think it
did kind of affect the, uh, the inventory
that we saw for a little
bit. But again, I think it's
softening and I think people are, it's
like, wait, come back. You
can't close off huge industries
like that. Like I said, India right now
is like number one in
business aviation. They're doing
so much over there. And plus it seems
like with the tariffs too, they're,
they're volatile, right?
So we're going to do 135% on Canada. And
then a couple of weeks,
well, we came to an agreement.
It's only on this, this, than this. And
so, I mean, tracking
that and keeping, keeping,
keeping small, so to speak is kind of a
difficult, seems to be, I have a deal
right now, another one
in Europe and it's, um, a Piaggio. So
it's, you know, it's
definitely, it's prime for tariffs.
And with that even, you know, we are
trying to work the closing
around the volatility of the
tariffs. Um, you know, there was a pause.
So it was at 10% for some
time. They just announced
that it's going back to 50%, which goes
into effect August 1st.
And now we're rushing to
meet that deadline. Right. So it's coming
here. Yes. Yeah. It's coming
to the US. So, um, so we're
just trying to move all these pieces. And
of course, you know,
as, as you probably know,
and you know, that, you know, importing
an aircraft into the
United States is not a one
week process. You know, you have to get a
DAR, you have to go through customs.
It's, it's a lengthy
process. So adding the tariffs and
navigating that and making
sure that we're meeting these
obligatory deadlines, in my opinion, um,
just adds complexity to it, but it
certainly can be done.
You know, no one should be deterred by
it. It just, it now is a
cost of doing business.
What are some things that people might
not understand going into
a, uh, buying an aircraft
that, that you tend to help them
understand? Like what are some, what are
some common kind of like
misconceptions or some common things that
you might have to steer
them in the right direction on?
I would say it's kind of two parts,
right? So first is the acquisition. What
do you need to know there?
The second piece is, okay, now you have
this big, beautiful new jet.
Awesome. You know, how am I
going to operate it within the confines
of what the regulators will
allow with the acquisition?
It's, it's very important to have the
right team for that. Um, I call it the
acquisition team. And
I like to say the lawyer is the captain
of the acquisition team. Of
course the lawyer says that.
The broker thinks that the broker is the
captain. So yeah, it depends.
Yeah. But, um, someone needs
to coordinate all these people and all
these moving parts. Uh,
so with the acquisition,
it's important for a buyer, especially
first time buyer to, uh,
keep two things kind of in mind,
in my view. First is the pre-buy
inspection. That is so important. You
want to make sure that
you're working with an independent third
party MRO. You know, you
don't want to use the seller's
maintenance guy. You don't want to take
it to the seller's repair
station. You want an independent
evaluator for obvious reasons, I think.
Okay. And then from that,
you also want to make sure,
uh, that you're getting a title report
pretty early on to
understand if there's any liens on
the aircraft that we need to deal with
before closing. And
typically, you know, if it's, if
there's liens on there, that's not a, not
uncommon. Is that prior to
the LOI or is that after the LOI
gets signed? So I typically will do, uh,
the title search, you know, report back
from the escrow agent,
like after LOI before APA. It kind of
depends on the transaction,
you know? Um, but yeah, you,
you want to kind of be a little bit
further down the line to make
sure that you're going to go
through with that aircraft. But I would
say those are kind of two
key things that a lot of
first time buyers don't really think
about. And then also making,
uh, making sure that the, uh,
like I mentioned before, the acceptance
rejection is, you know,
ironclad in that, uh, in that
purchase agreement, giving them the right
to kind of make that decision post
pre-buy inspection once
they know the condition of the aircraft.
Um, because with used
aircraft, it's an as is typically,
it's an as is sale. Um, you get what you
get and there's really
very little recourse. And if
you didn't check it out beforehand,
that's on you. Exactly. Right. Exactly.
So that's very important.
So from the acquisition perspective, I
think just teeing up the
transaction, um, to give the buyer
as much flexibility as we possibly can
negotiate. Uh, but also making sure that
they're working with
the right team. They have the right
technical person evaluating
that aircraft to make sure that
we're not missing anything. That's going
to be a huge problem for
the buyer post closing. Yeah.
But on the operation side of things, uh,
you know, once you
acquire the aircraft, great.
Before even finishing the closing, we
need to understand what your flight
mission is. You know,
what, what, what's the purpose of buying
the aircraft? Are you
buying it for business flights,
personal flights? Um, do you plan on
leasing it to a flight school? Do you
plan on conforming it
onto a charter operator certificate? By
knowing that we're able to first
structure the ownership
of the aircraft to make sure that it
complies with whatever you're trying to
do. Right. And then,
uh, also, uh, other key kind of
components of operation is the
regulations, you know,
the federal aviation regulations, they're
lengthy and they tell you
all kinds of things on what you
are able and not able to do with your
aircraft, um, how you can
operate it. And, uh, you know,
one thing that I've noticed in recent
kind of, um, transactions
I've been a part of is your,
people kind of miss some of those key
components. One example is if
you are a, what we call a part
91 operator, which is, you know, using it
for personal business use,
but just, you know, you're,
you're operating it, you, if you want to,
you know, fly, let's just, I'll give an
example. If you want
to operate in a specific manner, for
example, if you want to fly
above 29,000 feet, if you have a
capability and you plan on, on doing
that, well, you're required to obtain a
letter of authorization
from the FAA to authorize you to do that.
Um, and without that, that
would be a violation of the
regulations. And I'm sure they have their
reasons for that, right?
Yeah. But like, I wouldn't know
that. Right. Exactly. Exactly. And a lot
of, a lot of, you know, first time jet
owners won't know that.
So do you work with that? Would you work
with getting into
obtaining those LOIs? Yes, I do.
Yeah, absolutely. Typically, um, a lot of
clients will have, um, you
know, if you're, if you have
contract pilots, for example, if you work
with, you know, a company that will
provide you contract
pilots, they typically take care of all
that for you. It's kind of
part of their package. But if
you have someone that's, you know, uh,
new, new to aviation, I
always like to bring that up to my
clients, even if they are working with
contract pilots or have
their own pilots that already
probably have that in place. Um, I always
like to mention that at the
closing is, okay, if you're
going to be operating in, and I give them
a list, you know, there's
a, a great guy that walks you
through LOIs, I give him a list. If
you're going to operate any of these
ways, we'll have to obtain
an LOA for you. So making them aware to
make sure that that piece is not, um, is
not missed, you know?
Yeah. Yeah. Yeah. So it's, I mean, is, is
there like hoops you
get to jump through to get
that kind of authorization or is it just
kind of like, it's a
request to the FAA. We just,
we just want you to ask us. Is that all
it is? It's a very, it's
how asinine of them. Yeah.
You're, you're saying you're giving them
documents just to sort of, you know,
sure the airplane's certified for that.
Exactly. Exactly. But it's a, it's a
quick, easy process.
It's very painless. Um, it's just a
matter of, a matter of
actually asking for writing them
documents. And, uh, yeah, it's, it's
really not difficult, but
it's often missed. So it's
something that people need to be aware
of. Yeah. If I'm in the position to own
the jet, right? If I'm
in a position to start researching this
and I'm hearing all about
this bonus depreciation, I'm
hearing about all this stuff that is
going to be a catalyst for me
wanting to pull the trigger on
a purchase. What's the next best thing I
can do from your
perspective? So I would suggest one of
two things. Um, either if you know, a
trusted, uh, good aircraft broker that
has been recommended to
you by other people in the industry or
that you're familiar with, um,
that might be the first step,
right? Is to identify the aircraft if you
haven't already done that.
And a broker would be a great
resource for that to help you. Um, other
way that you could do it is
to call me, um, and kind of get
that ball rolling. I also, when I'm
working with, you know, prospective
clients that haven't actually
identified the aircraft that they want to
purchase, they just have the
idea that I want to purchase
an aircraft. I typically would even, um,
send them to an aircraft
broker and say, all right, well,
identify the aircraft and call me back,
you know, and I'll, I'll
refer them over to, you know,
to you guys. You know, I got no points.
Yeah. I don't have points. They'll find a
plane and then come back to me. So,
yeah, one of two ways. The key really is
just to get in contact with
a trusted person that has a
reputation, good reputation in the
industry. And that's very easy to find
out. Just ask around,
either a broker or a lawyer. Yeah. Yeah.
That's what we'd like you to say. Yeah.
Yeah. You know. Yes.
So, um, closing thoughts here. Is there
anything else that people
need to know prior to entering
into one of these transactions? Because I
know it's a lot of
money. It's a lot of risk.
Um, any, any kind of closing thoughts in
regards to that? A lot of people will
kind of, uh, save on
the attorney's fees in order to kind of
make the deal work for them.
Uh, but that initial front end
investment ends up, you know, saving you
thousands, if not millions on the
backend, because if that
transaction is not done correctly, you
could end up with a lot of
liability and lost income and
lost time. And, uh, a lot of things that,
you know, you're just not
going to catch unless you're
working with someone who's experienced in
that space. You're
spending a lot of money on this
huge asset. Give a little bit more in the
front end investment. Sounds
great. And, and on that note,
what would be the best way for somebody
to reach out to you? Yes. So,
uh, you can go on our website,
arrowlawcenter.com, A E R O and, uh, give
us a call. Like I said, we
do offer free consultations.
So, uh, our phone number is on there.
Just give our, uh, give our office a
call. We'll set you up
with a free consult either with myself,
um, or my managing
litigation attorney or my partner,
um, John. So either one of us will take
care of you. Awesome.
Awesome. Great. And there is going
to be a link in the description below,
uh, on the video, um, and
make sure to like comment,
subscribe, all that stuff. Um, and, uh,
they could probably follow
your own LinkedIn, right?
I mean, you guys have a LinkedIn, you
guys have all your social
channels. We're on all the socials.
We're on LinkedIn, Instagram, Facebook,
we're on all the socials. So
arrow law center, look for us
anywhere and, and yeah, please follow and
like and keep in touch.
Perfect. Nettie Raglan,
thank you so much for joining us. Thank
you so much for having me.
Thank you. All right. Awesome.
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