Available, the Following Aircraft

Australian Aircraft Sales operates out of Hangar 2, Sydney Airport, in Vickers Avenue. Captain John Presgrave is John’s Director of International Operations and Second-in-Command, and a staff of seven is maintained.

A Washington DC office is also maintained, under the control of James A. Cunningham Jr. , with the position of Vice-President. There are eight staff members in the Washington office. Jim Cunningham worked for AAS in Indo-China, and he was once vice-president of Air America. Jim’s been with AAS now for nine years. Looking at AAS and its present operation, I discover that they have sold an occasional wide-bodied aeroplane, but they did not own the aircraft, they merely did the brokerage. Two DC-10-10s were sold to International Air Lease, who have now taken over Capitol Airlines, which operate from Frankfurt to New York, down to Miami and across to Los Angeles!”

These two DC-10s originated from United Airlines. But DC-10s are not the bread-and-butter of AAS operations. In pure jets, they have mainly handled a considerable number of 707s and DC-8s. By way of example, AAS purchased three DC-8s from Air Ceylon before it changed to become Air Lanka.

Presently, AAS are dealing mainly in F. 27s, DC-8s and DC-9s.

The Company has bought from both Ansett and TAA for many years. More recently, four Ansett 727s were acquired by AAS and re-sold to an operator in Miami. From TAA, six 727s were purchased. VH-TFW, an F. 27-200 aircraft (ex-TAA) was sold to Varig. Over the years, John Conley estimates that he has bought something like 65 to 70 aeroplanes from Ansett Airlines. From TAA, the figure is about 49. The Company acquired four of the TAA fleet and the of DC-9-31s, and have taken an option to buy the remaining eight aircraft in the DC-9 fleet.

The aeroplanes that have already been purchased are: VH-TJM (Serial 47072), VH-TJN (47203), VH-TJJ (47007) and VH-TJK (47008). VH-TJK was the last TAA DC-9 to be sold by AAS on 5 January 1983. The other three aeroplanes were sold earlier to Airborne Express, of Ohio, USA. The remaining eight TAA DC-9s that AAS have options on are VH-TJL, VH-TJO, VH-TJP, VH-TJQ, VH-TJR, VH- TJS, VH-TJT and VH-TJU. These remaining eight aircraft are still in airline service with TAA, have ‘wide-body-look’ interiors, and will be snapped up when they become available for acquisition, perhaps in March 1984.

AAS purchased the last five TAA F. 27 Friendships, all the 100 series variant, and sold four to Evergreen Airlines of the USA. East- West Airlines VH-EWA was bought and sold by AAS to Uni-Air of France.

Regarding earlier piston-engined equipment, AAS bought most of the old Ansett Carvairs and all their DC-3s. DC-4s and DC-6s.

AAS has been responsible for taking most of its piston-engined airliners out of the country. In fact, on overall figures, AAS have taken out of this country from the two second-level operators TAA and Ansett, something like 170 aeroplanes, conservatively, over the past 30 years! And they still operate some of them in Indo– China.

AAS has one very faithful customer, Far Eastern Air Transport (FEAT) that has just taken delivery of five ex-Lufthansa Boeing 737-100s, FEAT is based in Taipei and has dealt with AAS for many years. FEAT has to date bought 46 aeroplanes from AAS! Another three ex-Lufthansa Boeing 737-100s are currently owned by AAS, and are now awaiting new owners. They are all low-time, 105 passenger aircraft registered AD-ABEA (Serial 19013), AD-ABEC (19015) and AD-ABED (19016).

Seven F. 27-100s were purchased by AAS from Air New Zealand, with Dart 514-7 engines, heavy-duty floors, and a large range of spares. They can each carry 40 to 44 passengers.

Four F. 27-600s fitted with large cargo doors were also acquired by AAS. They are the ‘QC’ or ‘quick-change’ variant. AAS also has a DC-8-55F Combi QC cargo-passenger aircraft for sale.

John Conley finds that he gets a very large amount of repeat business from all over the world, which perhaps speaks volumes for the way the company is trusted by the world aviation community.

One deal that got away was the Ansett DC-9 aircraft, with registrations VH-CZA through to VH-CZL. Some form of trade-in arrangement was made with Boeing by Ansett, and all of the aircraft except VH-CZA, the flagship of the fleet, and VH-CZD (which was operated as the Air Vanuatu aircraft) were acquired by Midway Airlines of Chicago. VH-CZA and VH-CZD were sold to the United States Navy.

Australian Aircraft Sales have to have a method of letting their customers know what aircraft are on offer, and for this purpose distribute among their customers a Sales Listing twice annually.

But that procedure has only taken place in the past ten to twelve years. Prior to that, the TELEX was used, with customers around the world being called direct by AAS.

The AAS Operations Room is crammed with 1700 to 1800 files representing their airline customers throughout the world. The company doesn’t depend on Australia for a living, most of the activity is off-shore, except for the aircraft that are purchased in Australia from the two major domestic airlines.

From across the Tasman, AAS has bought 30 to 40 aeroplanes from New Zealand over its period of operation.

AAS buys outright most of the aeroplanes they deal in, as in these tough times in the industry, it’s very difficult to work on a brokerage unless the volume of purchases is up in the millions. The working figure is two per cent on an aircraft with a value of one million dollars! Under those restrictive percentages, the administration costs would beat the Company and prevent it from showing a profit. AAS finds that it can administer a better deal for the purchaser and all parties concerned by buying the aircraft from the original owners outright.

The problem of capital is just that, an ongoing problem, but it’s also the name of the game. Without capital, the company could not operate, and by capital, John Conley means many millions of dollars, that have to be available to him at a moment’s notice on occasions.

The AAS Sydney offices are very modestly furnished, perhaps masking the true financial status of the operation. But as John Conley says, ‘we could move into a larger office, but why? This one suits our purpose ideally. He’s right of course, because most of the business comes in from overseas by telephone or telex.

I asked John Conley about the biggest and most regular overseas customers, and he mentioned FEAT, who’ve bought 40 aeroplanes from AAS, International Air Leases have bought nine Boeing 727s, and then there’s Western Airlines in Los Angeles, Canadian Pacific (CP Air), Air New Zealand, Thai International, Air Ceylon, now known as ‘Air Lanka’, MEA of Beirut, Olympic Airlines, British Midlands, Dan-Air London, Lufthansa, Air France, Austrian Airlines, Aviaco, from Spain. . . all in all a very impressive list of customers.

Just in passing, having mentioned Dan-Air, John Conley tells me that two Dan-Air Comets are currently for sale on the world market by Western Air.

AAS have sold 199 Douglas DC-3s in their period of operation, and the majority have come from Australia and New Zealand. All these aeroplanes found their way into Indo-China during the ‘misunderstanding’ there. Then followed the purchase of nine DC-3s from Burma Airways, which were in turn sold to Ethiopian Airlines. Eight Douglas DC-3s were acquired from Air Nuigini, which were sold to an operator back in America. John Conley states proudly that he’s sent 20-odd DC-3s back to the USA in the past 20 years.

AAS purchased all the TAA and Ansett Viscounts, and also bought the entire fleet of nine New Zealand Air Force Short Sun- Nederlands! But they were cannibalised for the engines to support the AAS DC-3 fleet in Indo-China. The Sunderland had Pratt and Whitney 1830-92 engines, which can be used in the DC-3.

AAS does not often cannibalise aeroplanes for engines, but at the time of the Short Sunderland acquisition, there was a great shortage of P & W 1830-92 engines. The Sunderland was obsolete, so AAS put a bid in and acquired the nine aircraft. Unbelievably, some of the Sunderlands had only 2000 hours on the airframe since manufacture! After that, AAS bought the New Zealand Government’s two DC-6s, but instead of selling them, operated them in Laos, under contract. DC-3 acquisitions have been phased out by the Company for the past eight or nine years, but AAS still owns one, based in Manilla, which they bought from Philippine Airlines. They use it in Manilla on special projects. It’s a cargo aircraft.

The question of ferry flights for customers who have bought aeroplanes from AAS comes to mind, and John Conley explains that in piston-engined days, they would sub-contract to the airline doing the purchasing. But now, the selling airline is subcontracted to supply the ferry crew. An F. 27 recently delivered to Varig in Brazil was ferried by TAA crew. The aeroplane, VH-TFW, an F. 27-200 series, was flown over by aircrew who were used to it, not an outside ferry crew who had not flown it before. John Conley believes that it’s much better to work in with the airlines, as they have everything laid on, and the operation is much more efficient than with outside operators. Most of the airline crews who are chosen for the ferry jobs jump at the chance to get away from their airline routine for a few weeks.

Foreign clearances for sold aircraft prior to delivery are routine matters to John and the staff at AAS, who work through Foreign Affairs and the various Australian Embassies around the world. The procedure has been streamlined by the Company and is uncomplicated. An urgent clearance could be obtained within 48 hours if really necessary, but the process normally takes seven to eight days.

The four Douglas DC-9-31s that went to Airborne Express in Ohio can be cited as an example of how quick the process can be. The last DC-9 to go was ferried out on 5 January 1983, AAS applying for clearances on the first working day of that month! So the clearances for that ferry were obtained in about three days! It’s normally all done on the telex system, and the only item that can slow the process down is the Export Licence.

After the purchase of an aircraft, the actual livery is allowed to remain, with only the company titles being painted out, and the AAS logo being painted in. AAS don’t know who the new owner is going to be. . . and the new owner will definitely repaint it anyway, so the system works just fine. The cost of stripping and repainting an F. 27 these days is about 20,000 dollars. The cost of doing the same to a DC-9 or Boeing 707 just isn’t worth even thinking about.

Captain John Presgrave, Director of AAS International Operations, occasionally will take an active part in a ferry flight, and has 65 licence endorsements, up to Boeing 727 standard, as a Check-Captain. He hasn’t flown a 727 however for some years now. John Conley, Managing Director of AAS, is rated on DC-3s, Lockheed Hudsons and such-like with 50 to 60 endorsements.

AAS maintains a company aircraft, VH-CAU, based in Sydney. An Aero-Commander 560-E, which is only used 60 to 70 hours annually to fly to Melbourne or Canberra. The aircraft is not used commercially.

The business of buying and selling large transport aeroplanes is a dangerous one, even in good times, and John Conley has had to do his homework to make sure only the right decisions are made. Today, right at this moment, in the Arizona Desert, there are 30 to 40 wide-bodied jetliners in mothballs! There are about 70 DC-8s in similar circumstances, and 120 Boeing 707s there.

The severe downturn in the airline industry that has been present in the USA for the past three and a half years only really hit here fully in 1982. John Conley astutely predicts that the industry is going to be flat until about 1985 or ’86. He has worked that date out from studying the manufacturers’ assembly lines, such as Douglas, Boeing, and Airbus. The assembly lines are slowing down! America is just starting to come out of it. . . about. 1 on the graph, so John sees a long hard road ahead for Australian aviation.

In terms of costs, eighteen months ago a Boeing 707-320C would sell for 4. 5 million dollars. You can pick one up today for around one million, or even 800,000 dollars if you’re lucky, with half-life-time on airframe and engines. . . ready to go! In other words, a deterioration of three million dollars over eighteen months has occurred. And that’s only one aeroplane type!

AAS hasn’t really felt the effects of the recession, because they did their homework three years ago, and swung over to dealing mainly in F. 27s, DC-9s and Boeing 737s. They’re good domestic aeroplanes, in all parts of the world, and are all profit-making by nature. They make money for their owners even in hard economic times. But John sees 4-pods as being tough to sell at the moment!

He predicts that the F. 27, DC-9 and 737 will stay around and continue to earn good revenue for up to the next ten years. He believes that particularly the F. 27 will have the same charmed life-span of the immortal DC-3. They’ve been saying that the DC-3 is out for thirty years, yet a year ago we sold eight of them from Burma Airways to Ethiopian Airways. The DC-3 is making a comeback in certain countries of the world. But with avgas in most parts of the world running at 3 dollars to 4 dollars (US) per gallon for 100 octane, it’s a very high direct operating cost. ”

When AAS purchases an aeroplane, the seller presents the aeroplane with a full specification sheet, giving the mod. status, full history, from the day it was rolled out from the factory assembly line. According to John Conley, 99 per cent of these airline records are very accurately maintained, so you can generally assess the aeroplane by its specifications.

Because of Australia’s two-airline system. all AAS aircraft purchased in Australia are bought with an Australian Export Certificate-of-Airworthiness. When the aircraft leaves the runway here on the ferry to its new owner, it leaves with an Australian Export C of A and all documentation brought up to date, in accordance with the Australian maintenance system. It flies out one hundred per cent airworthy.

John would not purchase an unairworthy Australian aeroplane unless he was planning to cannibalise it for parts.

The AAS target, at all times, is to buy an aeroplane with half-life, or 30 per cent life remaining on the airframe and engines, so the second-line operator in a backward country has got two to three years of utilisation ahead of him with his acquisition without carrying out any major overhaul. A lot of smaller operators buy this way as a stop-gap measure, on a programme based on a three-year operational lifespan. They get their money back that way, plus profit, and it’s up to them if they wish to go ahead and overhaul the aircraft.

The plan is based on a 2000-hours-annually utilisation rate. On an F. 27, perhaps 1600 to 2000 hours per year. With a pure jet, you’re looking at 2500 to 3000 hours in the air annually.

Has AAS ever had aircraft on their books that just don’t attract customers?

John Conley says “Yes. . . we sure have. . . we’ve had aircraft owned by us outright that have not sold for periods of two to three years! We’ve had some F. 27-100s for two years now, but we haven’t done any hard selling on them. The reason is we know the price is going up! So the aircraft are being serviced and maintained on our behalf by the previous owners, Air New Zealand, as part of our purchase contract. They remain in the airline maintenance system. ‘

AAS own aircraft right around the world, but they don’t transport them here for storage, as it creates red-tape problems. Other parts of the world are much more flexible on the movement of aircraft.

I look up at the Operations Status-Board and see seven F. 27s listed. They’re the 100 series variant. ZK-NAB, NAF, NAA, NAH, BXE, BSF and BXG. And then I remembered something I heard recently.

‘According to Fokker, AAS is the largest individual owner of civil F. 27 aircraft, as part of a non-airline operation. ‘

Combined with what I have learned in the past couple of hours, I begin to fully realise the size and significance to the world aviation community of Australian Aircraft Sales, out of sight of the eye in Hangar 2 at Sydney Kingsford-Smith Airport!