When airlines purchase planes new they usually pay about 50% of ‘list’ price. But what about used aircraft? And how do airlines actually pay for their purchase?
A receipt has surfaced for an actual used aircraft acquisition – Swift Air’s $8 million 2014 deal for then-29 year old ex-US Airways Boeing 737-400 registration N418US:
Found a receipt for a Boeing 737 aircraft today
byu/Met76 inDamnthatsinteresting
I imagine aircraft purchases going down more like Lamar Muse and Rollin King getting on the phone with Boeing during a break in a meeting with the Douglas Aircraft Company, and bluffing Boeing that they could either take startup Southwest’s terms on 3 Boeing 737-200s right then within the hour or they’d buy DC-9s instead… or like Harrison Ford buying a helicopter in Clear and Present Danger.
Instead, Swift Air paid for the entire price with a corporate American Express card.
The aircraft flew from Miami to Greensboro in late November 2022 to be put into storage.
Suggestions on Reddit include completing the purchase online through Rakuten for additional cash back or Membership Rewards points, and bundling the plane’s insurance with home and auto to save even more. I’d add credit card extended warranty coverage! In fact, the transaction is probably more like:
- a big stack of documents in a conference room,
- inspecting the aircraft and making the seller fix a number of items, prior to
- actual payment.
However it’s striking that Swift Air paid with a corporate charge card, rather than electronic funds transfer, and that they were in a position to be paying in full in cash equivalent rather than leasing.
And Amex approved the charge! It’s technically air travel spend, right? But the corporate card doesn’t earn 5x like the Platinum card does.
(HT: Golden Rule Travel)
I’d just like to be the one to get the Amex rewards for that purchase!
If this 29-year-old Boeing 747-400 aircraft were purchased using the Delta SkyMiles® Reserve American Express Card, the cardholder could have earned 60,000 Bonus Miles after spending $5,000 in card purchases in the first six months and could have earned Diamond Medallion status and benefits, including the highest complimentary upgrade priority, premium boarding, and enjoy advantages like a complimentary CLEAR® Plus membership to ease through airport security, customizable Choice Benefits with Delta Sky Club® access, Rollover MQMs and more.
You have a typo in the article. Is it a 747 or 737? 🙂
How can this really be true? We tried paying for a car with our Corporate Amex once and it was not allowed.
@Christian AMEX will allow it if your financial profile with them says you can pay. You were likely declined by the dealer who didn’t want you to pay the full amount on a card. They typically do this because AMEX charges 3-4% to use their cards so dealers only like to allow customers to put $2k or $5k or whatever on a card. Everything is negotiable though.
@Ken A – love it. Awesome reply!
Well, we now know how people will be getting enough charges on their American Express cards to get the status they desire at Delta. Oh wait, if they have the airplane, why do they need Delta?
“Don’t leave home without it”!
I actually flew left seat in this (ship 418) 73 at US. I wouldn’t have bothered setting her down so easy if I had known what a discount they would later give at the “Buy Here, Pay Here” lot.
Car dealers are happy to take your credit card (the US Government too!), if you just add 3.5% to the purchase price.
Having done three multi-million dollar deals in my life, Gary is correct that there is a slew of paperwork, the actual purchase and sale agreement, warranties, title documents, proof of ownership, proof of no liens, proof of paid taxes, etc., etc., and with an aircraft, likely repair history, licenses and other things aircraft related.
The common thread in all of large asset purchases are when the two side of lawyers meet and ‘lay the papers flat’, meaning they are all signed and put in a physical stack on the closing table, or in recent years, as a series of attachments in email or DocuSign.
The only thing left to do is wire the money, or in this case, run the Amex card, which I’m sure the purchase price or some other concession was adjusted for the fee. (I.E, Seller: It’s for sale for $10MM, Buyer: I’ll give you $8, Seller: no $9.5MM, Buyer: how about $8.5, Seller: no, let’s just make a deal at $9, Buyer: OK, but only if I use my Amex card! Seller: Deal!).
That’s how it works, so far in my experience, and negotiations can literally take just a few days… sometimes just hours.
I didn’t realize it before, but the claim of 29 years is incorrect. The airplane was delivered in 1989 making it 25 years and a number of months old when the receipt was made. N438US, an airplane made not too long (a year give or take) after N418US, is still flying per FlightAware, as is N440US.
Didn’t I see this same aircraft unloading “undocumented guests” at Stewart ANGB? Perhaps Swift Air just needed an airplane pronto and didn’t want to wait around for loan as rich uncle was paying.
No line for a tip?
This makes no sense to me. Why would anyone want to give a credit card company so much money for their cut? And make a closing unsure due to the additional complexities of credit card rights? Of course everything is negotiable but someone in this deal unnecessarily left several percent on the table and made the deal needlessly complicated. This is either bogus or there is something important we don’t know.
@ Peter… Both sides of the transaction likely have strong histories with AMEX. This would be prearranged with AMEX, both sides trust that in case of any disputes the arbitration process would follow prearranged terms. Amex is in a position to provide a customized payment solution that is more efficient for all parties. No other fund transfer mechanism can offer the level of service that Amex can provide.
You are misunderstanding the difference between AMEX and the likes of Visa and MasterCard. AMEX is very different.