Due diligence, simply stated, is “examining things or people before buying or employing them.” (macmillanthesaurus.com)
I’m talking about a prepurchase inspection, aka, the pre-buy. There is a lot of pushback against them, which makes no sense to me. In buying a King Air, you’re going to part with upward of a million dollars (or maybe a mere half-million!). Why risk inheriting an expensive-to-fix problem after spending all that money? Normally, a pre-buy gives the buyer a list of squawks and the seller takes care of the airworthy ones or the buyer passes on the deal. In the case of an “as-is, where-is” deal, you really need to know what you are getting yourself into.
Rationalizations
Buyers who skip a pre-buy are looking at the price of the aircraft with tunnel vision. They balk at spending an additional $12-15K and rationalize their decision in various ways. I’ve probably heard every excuse there is for skimping or skipping a pre-buy. “It’s got a fresh Phase 1 and 2.” Or “It just came out of a Phase.” That’s nice, but you need all four Phase inspections to completely inspect a King Air. Each Phase includes a portion of the checklist that concentrates on a specific area of the aircraft, in addition to the common inspection items that occur every time. You need all four.
My favorite: “The hot sections were just done 150 (or 50 or 20) hours ago!” Remember, it only takes one bad start to ruin an engine. The term “fresh hots” on an aircraft writeup means nothing. A borescope inspection on each engine is essential in a pre-buy. Do it before the Phase 1-4.
A Broker’s Plea
Recently on an online forum, Chip McClure – a well-known aircraft broker in the King Air community – vented his frustration at buyers foregoing pre-buys. His subject line was “QUIT buying King Airs without a PRE-BUY!” Why would a broker say this? Could it be that some of his buyers ran into big problems post-purchase and complained bitterly to him? His post drew a big response.
I had already planned on writing this article but hesitated. A fair portion of my consulting is pre-buy related and I don’t want it to look like I’m shamelessly promoting myself. Then after Chip’s post I wondered if I would be beating a dead horse with this topic. On the other hand, I’ve been asked repeatedly to write about pre-buys.
The road to buying an aircraft is not always smooth. There are buyers that are laser focused on the purchase price alone; they loathe the idea of spending a penny more. I wish these buyers would look at the bigger picture. All aircraft come with a future of maintenance obligations; the point of a pre-buy is to avoid buying one full of hidden nightmares. Consider it as hedging your bet on the King Air you aim to purchase.
Lipstick on a Pig
I was contacted by the director of maintenance (DOM) of a small charter operation. They were looking to add another King Air to their 135 certificate and he found one he really liked. He’d already reviewed the logbooks and they looked great. The pictures were fabulous – new paint, nice interior and a new panel! What’s not to like? The DOM took his own crew to inspect this gem but he wanted me there to ensure they didn’t overlook anything crucial. In person, this King Air exceeded all expectations. Everything about it was pristine. The paint was gorgeous. The interior was beautifully done. The cockpit was a pilot’s dream. The presentation of this product was first class all the way.
The DOM and I dug into the logbooks while his guys opened panels. The most recent records were in good order, but everything prior was a total disaster. Aircraft total time was a guessing game with 3,000 hours missing in one book and 2,000 hours suddenly gained in another. Engine records did not reference airframe total time, which made a bad situation worse. Everything was out of chronological order. As we attempted to compile a timeline, we found chunks of time with no records at all. Major portions of the records were in Spanish with no translation. These maintenance records were “strike one.”
The recent log entries had many squawks with “light corrosion” listed, but when looking at them many were far from “light.” Example: Corroded rivets were found in the tail and removed for correction; the stringer was removed and more corrosion was found underneath it. Although these corrosion squawks were remedied, they posed a red flag. In my experience, wherever you find corrosion, there’s going to be more. These log entries had my antennae on alert.
I stepped into the hangar to look at the aircraft. The engine cowls were open. As I peered in I could see corrosion on the outside of the reduction gearbox, clearly visible to the naked eye. I thought if the outside was this bad, what does the inside look like? Unfortunately, a borescope won’t show me the inside of the reduction gearbox, but I didn’t really need to see it. I know what corrosion can do in an engine. There is more steel and aluminum in there than you might think – “strike two.”
The splice plates were deeply corroded and had not been squawked or remedied. This would be a very expensive fix and apparently the seller was not entertaining any reduction in price. So that was it – “strike three” and game over. We packed up and left. One of the prospective buyers was on-site with us and took everyone to dinner afterward. He told me he learned his lesson about pre-buys and was grateful his DOM had insisted I be brought to the job. He admitted being seduced by the dazzling paint job and the new panel. He was ready to sign on the dotted line and was thankful for our diligence on his behalf.
A Preliminary Check for Corrosion
Chip’s post mentioned a few areas of concern that he sees cropping up repeatedly in recently purchased King Airs where no pre-buy was performed. Corrosion was at the top of his list. I’ve written about corrosion in this publication several times, including the February issue this year. In a nutshell, corrosion is destructive and once it starts spreading, it doesn’t stop. Also, corrosion that is found but not treated correctly will come back.
As the King Air fleet gets older, corrosion becomes a greater concern to prospective buyers. Chip had a brilliant idea – he proposed that buyers have a corrosion inspection completed before the engine borescopes and Phase 1-4. Coincidentally, I was engaged to do exactly that! A couple of months before Chip’s post, a buyer hired me to inspect a B200 specifically for corrosion. This buyer already owned one King Air, but after the purchase some serious corrosion issues were discovered. The remedy was very costly. When he found himself in the market for another King Air, he hired me to complete a focused check on corrosion, before proceeding with the rest of his pre-buy plans. The subject aircraft had been in South America and the prospective buyer was in Africa. COVID-19 restrictions had made travel unfeasible for the buyer, so he had the aircraft moved to a shop in the U.S. where the borescope and Phase 1-4 would be performed.
Before the Phases, however, I performed the corrosion check. If I found anything that could kill the deal, the buyer could then cut his losses and save his Phase 1-4 money for the next prospect. This arrangement worked well. I used a “Corrosion Control Checklist” from the King Air 200 maintenance manual. It’s an optional guide for corrosion control, designed to be added to a Phase inspection for King Airs operating in corrosive environments. It covers the whole aircraft. I didn’t find anything major, just a little corrosion up in the tail that would be easily remedied by the shop using the standard protocol for corrosion correction. I was in and out in a day; the rest of that buyer’s due diligence continued on.
Borescope Inspections
For years I have been preaching the importance of a borescope inspection on the engines as part of the pre-buy. Timing is crucial. Have it done before the Phase 1-4. If it reveals a significant problem, you can cancel the Phase inspections and save that money for the next deal. Chip McClure concurs. Buyers not having a borescope of the engines done prior to purchase is one of his pet peeves. A borescope can’t get to the whole engine, but it goes where it counts the most – in the hot section. A really good technician can peek into the compressor. Anyone who balks at borescoping the engines before purchase should contrast the cost of a borescope with the repair bills for a damaged hot section. You will find them paltry by comparison. Don’t forget: One bad start can ruin an engine.
Black Death
Black Death is another problem on Chip’s list. He has seen buyers skip a pre-buy only to find this serious air conditioning problem post-purchase. It is a relatively new area of concern that I addressed in the August 2017 issue of this magazine. I field more phone calls on air conditioning (AC) than any other topic. Some mechanics are trained in it and truly understand it. Others will tell you, frankly, that they don’t mess with AC and they should be thanked for their honesty. Far too many mechanics, trying to be helpful, will fiddle with servicing the AC or flushing the system, when they really don’t know what they are doing. Unwittingly they make things worse. The primary cause of Black Death is improper maintenance of the AC system over time. If you buy an airplane “plagued” with Black Death, the only remedy is to replace every line in the system that moves Freon. It is a very expensive job.
Structural Cracks
Pressurization cycles repeated over time eventually create cracks in the aircraft structure. Like corrosion, these cracks are cropping up more frequently as the King Air fleet ages. And yes, they’re on Chip’s list of problems he sees when no pre-buy was performed. There is an inspection that addresses this issue. It entails removal of the interior and all floor boards. This gives a good look at the inside surface of the belly skin – a good place to check for corrosion too. More importantly, cracks in the stringers and other structures below the floor can be found and remedied. You may have heard of this inspection. It’s a Phase 3.
A Prudent Prepurchase Plan
The term “pre-buy” is bandied about in two ways. As a general term, it refers to everything a buyer might do as part of their due diligence. Specifically, it means Phase Inspections 1-4, paid for by the buyer as a part of their prepurchase actions. Used in the general sense, an overall pre-buy strategy would consist of logbook analysis, engine borescopes, perhaps a preliminary check for corrosion, Phase Inspections 1-4, ground runs and acceptance flight – in that order.
Logbooks: Before anything else, a buyer needs to get the maintenance records analyzed by an expert in King Air maintenance. A CAMP report (or equivalent) is a start but nothing replaces the actual logs. I cannot emphasize this strongly enough. I never met a maintenance management program report without mistakes or conflicting data. They always give rise to more questions. When I get to the actual logs, I comb them for corroboration and clarification of the report. Along the way, I learn more about that King Air. A 100-page CAMP report won’t say when the aircraft moved from a dry desert climate to a humid, salt-laden environment, or how long it remained there. Sometimes I have to read between the lines. Damage history can be deduced from studying the logbooks and 8130 certificates. The logbooks tell a story that no amount of data entry into a program can ever convey.
Borescopes and Preliminary Corrosion Check: Do these checks before the Phase 1-4 so you can cancel the phase inspections if either disqualifies the aircraft for you. The corrosion check is not meant to be a shortcut around the Phases. My client from Africa did it as part of his pre-buy to ensure the King Air under consideration was a worthy candidate for a Phase 1-4.
Phase Inspections 1-4: I’ve been working on King Airs since the 1970s and pre-buy inspections have always been a Phase 1-4. Do them all. Just don’t expect the shop to sign it off specifically as a “pre-buy inspection.” No one does that anymore. Buyers interpreted that as some kind of guarantee and endless warranty.
Final Ground Runs & Acceptance Flight: Once you are at this point, buyer anticipation is running high, but these steps must not be rushed. This is your opportunity to ensure that everything up to now has been done properly. Systems that worked great on the ground might behave differently in the air. Most importantly, some things can only be checked accurately in the air. Be prepared for squawks to crop up at the 11th hour.
The Case for a (Good) Broker
When my wife was a realtor she learned that if buyers and sellers meet, it usually kills the deal. Personality conflicts, offhand comments, preferences on appearance – the silliest things can ruin an otherwise good deal. Aviation is no different. That’s why there are brokers. A buffer between the interested parties can be very helpful. Are you required to have a broker? No. Many deals go through without one. But buyers without a broker will sometimes try to rely on me for things outside my purview. Purchase agreements come to mind. I may have plenty of ideas on what should be incorporated into one, but I don’t draw them up. Also, you need a title search and you might need help from the seller to clear any clouds. A good broker can drive this through and then some.
Caveat Emptor!
No one has a crystal ball. Whether you own a King Air already, or are thinking of buying one, there is no guarantee of perfection. It’s an airplane; they break. If you or someone you know is in the market to buy one, please listen to Chip. Don’t buy a King Air without a pre-buy. Do your homework. Hedge your bet. The prepurchase actions discussed here are your best shot to ensure you are making a prudent decision. Caveat emptor! Do your due diligence!