Thanks for all of this input.
I think I will go ahead and tell my partner to bail out now. No need to waste my time or the sellers any further.
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Sounds like it's the 135 certificate for sale.
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This is a little bit more than *just* the certificate.
I have seen several certificates for sale around $100k. For somebody not wanting to wait for the FAA to review and approve a new application package, that's not a bad way to get into operations right away.
If this were a properly priced company, it would be a way to not only have a certificate, but to also have a turn-key operation. Planes are in place. Hangar is in place, and in a desirable location. There is some value to that, however not as much as they are asking (IMO)
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Was thinking if the airplane didn't have WAAS or Mode S, you're going to need it down the road.
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It does have a WAAS GPS/NAV/COM, so I would have to add a newer transponder - such as the GTX-345
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With no contracts, you are really buying a few assets and name.
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In your example, this is the $1.2m premium over the liquidation value of hard assets. Doesn't sound like their is much if any IP or customer relationship value, so that's all goodwill.
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The uncertainty principle is what gets me. No guarantee (contracts) for continued profit. Everything is purely on faith that the economy strengthens, tourism does not flounder, and the company does not suffer any setbacks. And if you're using 100% of your net to service a loan, then were does the money come from when you have to replace a PT6 engine, or when a new route opens up and you need to buy another plane?