a/k/a Back to Back / B2B


BUY / SELL TRANSACTION: A transaction where a Broker / Dealer (the “Intermediary”) contracts to purchase a product (aircraft, engines, parts) from the seller and, concurrently, contracts to sell the aforementioned product to the purchaser for the purpose of facilitating the transaction. Simultaneously, at the transaction closing, the purchase price is transferred to the seller, via the escrow agent, and title of ownership is transferred to the buyer through the Intermediary.


The term Buy/Sell Transaction (BST) is adopted by GLADA, thereby eliminating the negative connotation of “Back to Back a/k/a B2B” and giving more uniformity to the business aviation industry. BST is less inflammatory and a more accurate description of what takes place at closing. This type of transaction has been targeted by some in the industry and unfairly characterized as being unethical. Potential pitfalls can be obvious to experienced broker/dealers (broker). However, even experienced broker/dealers sometimes overlook risks and some contract language. This brief is intended to be a Best Practices guide for the seasoned professional or the occasional Buy/Sell broker. Understanding the process results in less risk and a more successful transaction.


There are numerous legitimate reasons why a principle might need a transaction to be structured as a BST, such as to protect his/her privacy (for a multitude of secondary reasons), to unwind a Special Purpose Vehicle (SPV) that was originally formed solely to hold the asset, to reduce tax liabilities, etc. Similarly, there are several reasons why a broker/dealer might need a transaction to be structured as a BST. Oftentimes, a BST is the best way to facilitate the transfer of an aircraft from one international jurisdiction to another (title, registration, airworthiness documentation, customs export, etc.). It could also be a situation whereby the broker/dealer is taking an aircraft in trade. It could even be a situation whereby a mandated broker is selling an aircraft on behalf of an owner who specifies a BST structure (for one of the reasons outlined above). However, it is a safe bet that the primary reason a broker sometimes prefers a BST structure is to ensure receipt of his/her hard-earned commission.

It is always best to structure a BST as a single transaction, rather than two (or more). Even if the spread between the buy price and the sale price is exactly the same, a double BST will usually cause the seller to think he could have negotiated a higher price and the buyer to think he paid too much for the aircraft.

The best way to ensure success in a BST is to have excellent communication and transparency. It is especially important to initiate this practice very early in the process and continue it even after the transaction closes. It is never ideal to have multiple parties in a “daisy chain” between the end-buyer and the seller, but this situation does come up from time to time – especially when dealing with higher priced aircraft and/or individuals based in certain parts of the world outside the U.S.

Although they are usually more difficult, multiple BSTs deals can be successful. The strong recommendation is no more than two parties, the one negotiating directly with the end-buyer and the one negotiating directly with the seller. The two brokers (buyer & seller) should be communicating directly with each other. It is important that all parties NOT in direct contact with either the aircraft owner or the end-buyer (“Influencers”) understand they will not be part of the official communication chain. A multi-party communication chain can cause costly delays in getting questions answered and/or receiving technical documents. Next to financial concerns, communication issues are a primary cause for the failure of multiple BST “daisy chain” deals. Note: When Influencers are not included in the communication chain, these arrangements always work best if they are regularly briefed on the progression of the deal.

If a daisy chain deal is to succeed, there also needs to be a clear agreement as to the success fee each Influencer will receive upon closing (whether a flat fee or percentage), and it should be memorialized in writing so there are no misunderstandings.


Prior to entering a BST consider the value proposition. There is inherent risk, liability and cost to consider.

  1. Is the margin enough to both make money and provide enough room for error to complete the transaction? Although it does not always work, consider a 10% margin as a starting point for any BST,
  2. Do I have direct communication with the principal decision makers? If not, expect a potentially more difficult transaction as well as more time and energy to be expended solving unforeseen issues.
  3. How much am I willing to negotiate against my own interests as an intermediary? This should be considered a threshold question. In any BST, an intermediary needs the ability to both leverage the parties to the finish line as well as terminate the transaction if it goes sideways. It is very difficult to strike this balance if goals for the transaction are not clearly established in the initial phases.
  4. Do I have the where with all? To accomplish a profitable BST (high six figure or seven figure margin), it will be necessary to make outlays such as deposits and in many cases improvement/modification costs.
  5. What is the scrutiny level of the transaction going to be? If there is lending involved, outside legal counsel (Buyer or Seller), more eyes reviewing and asking questions. It can add more scrutiny and may be difficult to “sell” a detail and any inconsistencies will be highlighted.
  6. How much energy/attention is likely going to be necessary? If the effort will be significate, the reward better be worth the effort and risk.
  7. What deals/projects am I missing on by focusing on the matter at hand? Every transaction you work is a missed opportunity to work on another potentially better deal.

Identify / Understand Risks:

Ownership Liability: A BST puts the Broker in the ownership chain as title will pass through broker’s designated business. In the event of warranty claims, post-sale disputes, accident, etc., the Broker selling company is the last in the title chain to OWN the aircraft.

Breach of Contract by Seller or Buyer: The contracts (Buy and Sell) are the heart and soul of a BST. Other than having excellent direct communication with the principals the contracts must incorporate language to protect the broker, as the intermediary between the buyer and sell. More on this under Contracts.

Import / Export: Import / export laws can vary with difference countries. Export and deregistration requirements. Language issues.

Communication: As previously noted clear, direct communication is paramount to a successful, stress free BST. Establish ground rules for communication up front in the BST and memorialize in writing…SIGNED. Who is communicating with the principals?

  1. Foreign Corrupt Practices Act & UK Bribery Act: Know the law. As an expert, you must be aware of and abide by the following laws:
    • Experts are responsible for ensuring that their conduct complies with all applicable laws, rules and regulations, including prohibitions against bribery.
    • Bribing a government official or bribery in the commercial context anywhere in the world is illegal.
    • Gifts or entertainment that are unreasonable or disproportionate may be considered bribes.

Commissions / Payments: If more than the broker is involved in the BST, are commissions, fees, etc., being paid through escrow or by broker post-closing. If paid by broker get signed W-9 forms up front, prior to closing. Remember to file 1099s.

Financial Distribution Chain: Who has their ‘hand out’ (influencer, finder, etc.)? It is not unusual, outside the US, for company (buyer or seller) employees, contract workers and close associates to expecta fee. Know the law. If disclosed and approved in the contract, the broker is covered. Typically, the influencer will not allow. Big risk.


CONTRACTS: The Purchase contract and the Sale contract should be considered separate and distinct arrangements. These terms of these arrangements should accurately represent the obligation of each the parties thereto. The notion of mirrored contracts is not appropriate as an intermediate purchaser/seller will have obligations which do differ from a direct purchase and sale. The terms should be reviewed carefully, so that no misrepresentation is made.

Regarding warranties, an Intermediary (purchaser/seller) will not be able to make all the customary representations and warranties made between direct purchaser/sellers.

Representations and warranties need to be carefully reviewed to ensure that misrepresentations are specifically not made to the end purchaser where an intermediate purchaser/seller is involved.

Each party to the transaction should make their own deposit with escrow. It is not recommended to use the deposit of the purchaser through the transaction to the origin seller. Ideally, the purchaser/seller would make their own deposit associated with their purchase contract. If separate deposits are not feasible, it is necessary for both the origin seller and the purchaser to acknowledge the deposit applies through the flow of title transfer.

In the event of default, the Intermediary purchaser/seller should be a position to make the respective parties to the transaction whole. Again, this will be dictated by the terms of the contract(s). It is generally appropriate to seek to limit damages in the event of default to the deposit(s) made in the transaction plus relocation and inspection costs. All purchasers including the Intermediary purchaser/seller must be able to meet the obligation of the contract(s) to which they are a party.

PROCEDURE: Buy/Sell Transaction Procedures (in Chronological ORDER) EXHIBIT ‘A’

PRE-BUY: Always have at a minimum the same scope or larger scope of inspection from the current owner than the retail buyer.

  1. Time is of the essence, try to limit the scope of the retail buyer’s pre-buy in both access and time.
  2. Try to get non-refundable, or only limited refundability on the retail buyer’s deposit.
  3. The retail buyer must pre-pay for the entire inspection and this must be verified with the facility.
  4. Get the facility to confirm the Retail buyer doesn’t owe ANY money before the inspection facility starts so liens will not be put on the aircraft for the Retail buyers’ scope of services.


Aircraft engine, maintenance and avionics plans are designed to eliminate ‘surprises’ in an aircraft owners operating budget. Some plans cover 100% of ‘ANYTHING’ while others vary based on desired coverage. The process of enrolling in a plan or transferring plan coverage from one owner to another in a sale transaction varies by manufacture or company. Honeywell has a sales office in Phoenix to handle quotes and transfers while JSSI routes the contract transfer to their regional director for the area the plane will be based / hangered. The WEB sites listed below will help navigate to the office or contact person who will assist in service transfer.

Always confirm current hourly rate, annual flight hour minimums and contract expiration date. Several companies will let contract expire without notification to the owner.

HONEYWELL – MSP/HAPP/MPP (Maintenance Service Plan I Honeywell Avionics Protection Plan

/ Mechanical Protection Plan)

CAMP SYSTEMS also use for Citation Cescom

PRATT & WHITNEY – ESP (Eagle Service Plan)


WILLIAMS ENGINES – TAP (Total Assurance Program)



BOMBARDIER SMART SERVICES (a/k/a Smart Parts) 514 – 855 -7270




  1. Evaluate the Proposed Transaction.
    • Make sure all the elements of a successful deal exist before you go too far.
    • Obtain a general agreement on price and terms of the sale.
    • Assess the potential profit margin for the specific transaction being considered and determine whether the associated risk is worth the anticipated reward.
    • Confirm that neither the buyer nor the seller has any objections with a BST structure.
  2. Control the Process.
    • Establish control early in the development of the deal in order to head-off potential roadblocks to a successful transaction.
    • Promote transparency throughout the process. At some point, it will be necessary to disclose the identities of the aircraft owner and end-buyer, each to the opposite party. Determine whether an NCND is necessary for this transaction. An NCND is usually the most prudent way to proceed. The identities should not be disclosed until the NCND has been signed by each party. Ideally, there should only be BST – one contract between the owner and the intermediary (as buyer) and one contract between the intermediary (as seller) and the end-buyer.
      • A double BST can be successful, but there is much more risk.
      • In this situation there are two intermediaries and three total contracts – one contract between the owner and the 1st intermediary (acting as buyer), another contract between the 1st intermediary (acting as seller) and the 2nd intermediary (acting as buyer), and another contract between the 2nd intermediary (acting as seller) and the end-buyer.
      • The potential risk lies in the fact that the 1st intermediary will not see the contract between the 2nd intermediary and the end-buyer; likewise, the 2nd intermediary will not see the contract between the 1st intermediary and the owner. There could be significant differences in terms and/or legal language between the two sides of the deal. This could be problematic if a dispute develops on either side of the deal (either before or after closing).
    • Streamline communications. Identify any parties NOT in direct contact with either the aircraft owner or the end-buyer (“Influencers”) on the buy side and sell side of the deal and know each one’s role. Confirm that any Influencer(s) that will receive compensation are not legally or ethically prohibited from profiting on the transaction. Eliminate Influencers from the primary communication chain. There should be a maximum of two individuals coordinating on any transaction (one on the buy side and one on the sell side). Make sure Influencers are regularly updated on deal progress. Make sure they are comfortable you haven’t forgotten them. Secure an understanding with each party that will receive compensation and obtain a signed agreement. The agreement should include a specific amount to be paid and when/how the payment will be disbursed. Determine which party is to act as the paymaster. Ideally, all compensation should be controlled by one party to ensure each party is paid in accordance with its written agreement.
  3. Aircraft Viewings, Inspections and Flight Tests.
    • Typically, in a BST structure, the pricing disparity between the two sides of the deal remains a potential pitfall to the success of the transaction until closing occurs.
    • It is important for the intermediaries to coordinate with each other and ensure at least one of them is present for any aircraft viewings, inspections and/or flight tests that take place during the transaction. The object is to head-off any potential discussions about pricing between representatives of the owner and end-buyer.
  4. Signing Documents as a Responsible Party.
    • BSTs require intermediaries, acting as a seller or buyer, to sign legal documents as a responsible party to the transaction. Some examples of such documents are: Offer to Purchase Letter of Intent (to purchase) Aircraft Sale & Purchase Agreement Visual Acceptance Certificate Technical Acceptance Certificate Warranty Bill of Sale FAA Bill of Sale Aircraft Delivery Receipt
    • These documents carry a great deal of weight from a legal standpoint, and many of them also obligate the signee financially.
    • It is critical that an intermediary NEVER executes a document prior to receiving the executed version of that document from the other party to that side of the transaction. At times, you may be pressured (even by multiple parties) to sign a document prematurely. DON’T EVER GIVE IN TO THE PRESSURE – even if the deal may fall apart without that signature. It simply is not worth the risk.
    • The structure of a BST requires the intermediary to be represented as a buyer on one side of the transaction and simultaneously as a seller on the other side. Therefore, it is usually not possible to ‘mirror’ all contract language on both sides of a BST. That said, the intermediary should always strive to mirror the language between two sister documents as much as possible – and for sections in which the language cannot be mirrored exactly in each document, the intermediary must at least ensure that the concepts match. This is the minimum standard to apply.
  5. Utilize a Checklist.
    • Aircraft transactions are complicated and there are many moving parts. It is highly recommended to use a checklist and make sure nothing is forgotten.
    • Template provided.
  6. Pre-Buy Inspection/Survey.


  1. Pre-Closing Process – use attached checklist to ensure following steps are completed.
    • Intermediary (Broker) must confirm that all necessary Pre-Closing BST Documents are positioned with the Escrow Administrator including: Fully executed Visual Inspection Acceptance Certificate/Form from Aircraft Purchase Agreement Exhibits. Fully executed Technical Inspection Acceptance Certificate/Form from Aircraft Purchase Agreement Exhibits. Set up Parties as Transaction User Entities (“TUE’s”) on International Registry (“IR”) as required. Fully executed Assignment of Warranties Form from Aircraft Purchase Agreement Exhibits, if any exist. Fully executed Assignment of Vendor Programs (engines, airframe, APU, avionics). Seller Signed FAA 8050-2 / Bill of Sale. Seller Signed Warranty Bill of Sale from Aircraft Purchase Agreement Exhibits. Buyer Signed FAA 8050-1 / Application for Aircraft Registration. Obtain Export Certificate of Airworthiness (if applicable). Confirm De-Registration of Aircraft from foreign registry (if applicable). Release of Lien(s) from finance institutions or private lenders (if applicable). Aircraft Lease Termination(s). Irrevocable Closing Notice(s) from Aircraft Purchase Agreement Exhibits. Aircraft Delivery Receipt(s) from Aircraft Purchase Agreement Exhibits.
  2. Closing/Delivery Process – continue use of checklist ensuring following steps are completed.
    • Relocate Aircraft to Closing location as outlined in Aircraft Purchase Agreement/BST. Convene meeting in person or on telephone conference call with required members of the parties to the BST including:
      • Owner/Seller representative with Power-of-Attorney to sign any documents (this is usually the Chief Pilot for the Owner/Seller).
      • Intermediary representative for each Broker involved in the BST.
      • End-Buyer representative with Power-of-Attorney to sign any documents.
      • Escrow Administrator.
      • Legal Counsel as requested/required by any of the BST parties.
      • If in-person closing is to occur secure a private conference room at closing location FBO.
      • End-Buyer representative should order fuel, obtain receipt to demonstrate Aircraft location at time of closing.
      • End-Buyer representative should photograph Aircraft in front of FBO signage to demonstrate Aircraft location at time of closing.
      • End-Buyer representative should print copy of FlightAware ( flight map and log to demonstrate Aircraft location at time of closing.
      • Owner/Seller representative should remove FAA Registration Card from the Aircraft for return to Escrow Administrator for filing.
      • End-Buyer representative should place the temporary FAA Registration Card into the Aircraft. Await confirmation of closing, distribution of funds to Owner/Seller and title documents to End-Buyer by Escrow Administrator.
  3. Post-Closing & Delivery.
    • Photos of parties at closing time…marketing/promo item.
    • Engage RVSM, SMS or other Manual Service Provider(s) for End-Buyer (if applicable).
    • 14-days – confirm Aircraft/Engine/APU/Avionics Programs transfers complete.
    • 30-day – deliver closing booklet to End-Buyer with complete set of sales contracts, closing documents, etc. from start to finish including closing location photos, screenshots, fuel tickets, etc.
    • 90-day follow up.
    • 180-day follow up…start priming the pump for the replacement

Closing Checklist

Visual Inspection Acceptance Certificate

Technical Inspection Acceptance Certificate

Assignment of Existing Warranties

Assignment of Vendor Programs (RRCC, MSP, etc.)

FAA Bill of Sale (Form 8050-2)

Warranty Bill of Sale

Aircraft Delivery Receipt

Export Certificate of Airworthiness

Confirmation of De-registration from

International Registry – Entity Set Up

Release of Lien(s)

Lease Termination(s)

Irrevocable Closing Notice(s)

Fuel Receipt / Evidence of Aircraft at Closing Location

Post-Closing Follow-up
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