Beyond the multiples
Acquisitions of AOC-holding operators are particularly sensitive transactions. Unlike a classic M&A, valuation does not rest solely on EBITDA: the quality of the AOC, the real condition of the fleet and the coherence of the operational manuals can move price by double-digit margins. Robust technical due diligence is what separates a deal that closes on time from one that falls apart two weeks before closing.
Five workstreams that cannot be skipped
AOC status and operations specifications. The OPS-SPEC is the document that defines what the operator can actually do. They must be read in detail: approved aircraft types, specific authorisations (RNP-AR, EFB, single-engine commercial), B-RNAV approvals, night authorisations and any operational limitations. An AOC with few specific authorisations is worth less in the market.
Fleet audit. Reviewing Form 1s and logbooks is not enough. You must verify compliance with Airworthiness Directives, the status of pending C-Check and D-Check inspections, the Service Bulletins applied and MRBR compliance. A D-Check hidden six months out can inflate the acquisition cost by several million.
Manuals and procedures. The Operations Manual must be up to date with the latest Easy Access Rules edition, and consistency across OM-A, OM-B, OM-C and OM-D is typically a weak point in operators that have grown quickly. The audit must include traceability of the amendments approved by AESA.
Commercial and leasing contracts. Operating leases contain change-of-control clauses that can trigger early redeliveries or renegotiations. The same applies to Part-145 maintenance contracts with third-party providers. Every contract must be run through the CoC filter.
Disputes and sanctions regime. You must request the history of findings from AESA and EASA audits over the last five years. Level 1 findings are red flags. Open sanction proceedings, pending matters and remediation commitments already accepted are contingencies that must be provisioned in the SPA.
The right team
Technical due diligence of an AOC requires a multidisciplinary team: an aviation specialist lawyer, Part-OPS and Part-145 technical advisors, an international tax adviser and, depending on the perimeter, an employment counsel familiar with the aviation sector. At Legalair we coordinate this kind of team for operators considering an acquisition or sale.