India’s business aviation market is expanding rapidly, with NSOPs, corporates, and HNIs investing heavily in jets and turboprops. Yet, in a country where buying decisions are often influenced by urgency, trust, and cost-saving impulses, a critical step is frequently overlooked: the aircraft appraisal.
What is treated as a standard practice in the US and Europe is often dismissed here as “unnecessary.” This cultural oversight has repeatedly led to inflated purchases, surprise maintenance bills, insurance disputes, and even financing roadblocks.
1. What Is an Aircraft Appraisal?
An aircraft appraisal is a formal, objective evaluation of an aircraft’s current market value by a certified professional appraiser, crucial for transactions like sales, purchases, financing, insurance, and tax purposes. The process involves inspecting the aircraft, analyzing its maintenance records, and assessing market conditions to provide a detailed report on its condition and valuation.
Below are the different ways in which aircraft appraisals can be carried out singly or a combination of these.
| Type | Scope | Use Cases | Limitations |
| Basic Pricing Digest (Vref, Bluebook) | Market data & sales history | Routine deals, standard models | Lagging data, ignores upgrades |
| Desktop Appraisal | Tailored to aircraft docs & market | Turboprops, light jets | No physical inspection |
| Physical Appraisal | In-person aircraft & logbook inspection | High-value, rare, or modified jets | Costlier, time-consuming |
2. Why Indian Buyers Undermine Appraisals
1. Cost Avoidance Mentality – Appraisal fees (₹2–5 lakhs) are viewed as unnecessary in a ₹30–70 crore deal.
2. Over-reliance on Brokers or OEMs – Buyers trust glossy sales presentations rather than neutral third parties.
3. Weak Banking & Insurance Discipline – Unlike global lenders, most Indian banks/insurers do not insist on accredited appraisals.
4. Deal Urgency – Operators rush to close slots or impress stakeholders, skipping technical due diligence.
Appraisal Types in India
- Pricing Digest: 60%
- Desktop: 25%
- Physical: 15%
The below visual highlights the contrast:
3. The Hidden Cost of Skipping Appraisal
Case studies in India have shown major losses:
– Overvalued Jet Purchase – A corporate bought a pre-owned Challenger at $28M; refinancing valued it at $23M → $5M paper loss overnight.
– Insurance Under-coverage – An NSOP skipped appraisal on a King Air B200; insurance covered only 80% of the claim.
– Maintenance Shock – A turboprop bought “as-is” revealed overdue engine shop visits worth ₹8 crore.
The below visual highlights the contrast:
4. Global Discipline: Appraisals as Standard Practice
In the US and Europe, aircraft appraisal is non-negotiable. Lenders, lessors, and insurers insist on appraisals performed by ASA (American Society of Appraisers) or ISTAT (International Society of Transport Aircraft Trading) accredited professionals. These reports are globally recognised, legally defensible, and serve as benchmarks for banks and insurers.
Aircraft Appraisal Adoption Rates (Global vs Indian Practice)
- Global (US/EU): >80% of business aircraft transactions include an independent appraisal.
- India: <30% transactions undergo any formal appraisal; majority rely on digest values or broker input.
The below visual highlights the contrast:
5. Discipline vs Neglect:
Example 1 – Europe (Discipline): A European charter operator sought financing for a Cessna Citation XLS+. The bank refused to move forward without an ISTAT-certified appraisal. The appraisal pegged fair market value at USD 11.2M, lower than the seller’s ask. The buyer renegotiated and closed at USD 11.25M, saving USD 750,000 upfront.
Example 2 – India (Neglect): A Delhi NSOP bought a King Air B200 (~₹28 crore) without an appraisal. Hidden engine shop visits worth ₹7.5 crore surfaced, and insurance denied full payout. The aircraft was grounded for nearly a year, bleeding revenue and credibility.
7. The Way Forward for India
– Make Appraisals Mandatory – Banks and insurers must require ASA/ISTAT backed appraisals.
– Educate Buyers – NSOPs and aircraft owners must see appraisals as insurance against shocks.
– Build Domestic Capacity – Train Indian appraisers under ASA/ISTAT frameworks.
– Leverage for Negotiation – Appraisal reports should be buyer’s tools, not afterthoughts.
Conclusion
Aircraft appraisals are not Western over-engineering; they are a discipline India cannot afford to ignore. Whether buying a turboprop or a long-range jet, an appraisal ensures transparency, protects capital, and aligns India with global best practices. The question is no longer ‘Can we afford an appraisal?’ but ‘Can we afford not to?’
