Jetrader - Winter 2016 - 33

collectively, the moving force behind the
creation of the International Society of
Transport Aircraft Traders (Traders became
Trading in 1989).
In November of 1983, at the Roosevelt
Hotel in New York City, George Dutton was
elected as the first president of ISTAT.
At a meeting in Washington, D.C., on
January 26, 1984, a program was initiated
to develop appraisal standards and ethics,
with James Matthews, then owner and president, American Aeronautics Corporation,
as committee chairman, given the task
of coordinating the proposals from the
appraisers and ISTAT board members.
The first Annual Conference was held
at the Doral Country Club in Miami during
April of 1984. The room was small, with
only 50 or so participants, and the eight
speakers stood by an easel with their flip
charts or used an overhead projector; no
microphone was necessary.
James Matthews single-handedly laid
the foundation of the ISTAT Appraisers'
Program. He went through the ASA examinations and extracted the best and most
applicable aspects for aircraft appraising.
Mr. Matthews canvassed aviation consulting
companies for candidates to be grandfathered as Senior Appraisers, reviewed and
evaluated submitted appraisals and selected
the founding group of 14 appraisers.
The founding ISTAT Senior Appraisers
'grandfathered' in July 1988 consisted of
William H. Bath, Fred E. Bearden, Herrol
Bellomy, James Davis, Jack B. Feir, John F.
Keitz, Jeffrey C. Knittel, Michael A. Metcalf,
Frank Price, Morten S. Beyer, John Lucas,
James Matthews, Robert Minnech and
Allen Thomas.
In 1989, the first appraiser examinations were held, with two people sitting the
Senior Appraiser exam and three sitting the
Appraiser exam.
Jack Feir became the first elected
chairman of the Appraisers' Program
International Board of Governors in February
1991. When Jack's three-year term ended in
1994, William (Bill) Bath became the second elected chairman. Jack and Bill served
the program pro bono while still running
their own appraisal consultancies, but at
the end of Bill's term, ISTAT created a new
position of Administrative Director to assist
future chairmen, mainly by screening new
applicants, composing and administering
the exams, and collecting application fees.

Bill Bath served as the first Administrative Director until 2012 when ill health
forced him to resign. During Bill's service,
Jack Feir had been his unofficial assistant and understudy, so Jack then became
the second Administrative Director. More
than any other individuals, Bill and Jack
were responsible for creating the ISTAT
Appraisers' Program as it exists today.
After 32 years of service to the ISTAT
Appraisal Program, Jack Feir, by then an
Appraiser Fellow, stepped down in 2015
from his role as the Appraisers' Program
Administrative Director and was made an
ISTAT Member Emeritus, a much deserved
and rarely given honor.
In 2016, ISTAT had 4,500 members
worldwide and 1,750 attendees attending
ISTAT Americas 2016, but there are only
53 participants in the Appraisers' Program.
While the Appraisers' Program has grown
and thrived, its growth is small compared to
the growth of the society. Appraisers, who
had been 38 percent of the membership in
1983, were 26 percent in 1991, 2.7 percent
in 2007 and 1.1 percent in 2016.
ISTAT's founders understood that the
program had to incorporate both high ethical and technical standards and precisely
worded definitions. ISTAT appraisal definitions are the financial and legal standard
for commercial aircraft appraisals and are
the value basis for billions of dollars of aircraft financings annually. ISTAT Appraisers
have qualified as aircraft valuation experts
in courts around the world.

ISTAT Appraiser Categories
The ISTAT Appraisers' Program has established four professional status categories:
* Appraiser
* Senior Appraiser
* Appraiser Fellow
* Appraiser Emeritus
Appraiser and Senior Appraiser categories are achieved through a combination
of professional experience and examinations, which cover general valuation
theory, technical expertise, finance and
professional ethics. Appraiser Fellow and
Appraiser Emeritus are honorary designations awarded for service to the program.
The ISTAT Appraisers' Program is primarily
a credentialing organization. Learning and
gaining the skills of an aircraft appraiser
is up to the individual through education,
work experience and studying for the ISTAT

exams. The educational role is limited to
continuing education sessions for Appraisers
and Appraiser candidates, and educating
ISTAT membership and consumers of appraisals about the program and the appropriate
use of appraisals and appraisal definitions.

Appraiser Examinations
To sit for the Appraiser exams, a candidate must have five years of related
industry experience, two years conducting
aircraft appraisals and must pass the Ethics
and Methodology exam, the Appraisal exam,
the Finance exam and the Technical exam.
The Ethics and Methodology exam is
based on the ISTAT Principles of Appraisal
Practice and Code of Ethics. Real-life scenarios involving potential ethical issues are
posed, with candidates having to explain
how they should be resolved. As in the real
world, some scenarios may have ambiguous
ethical dimensions, requiring an appreciation of both sides of the relevant issues.
The Appraisal exam requires candidates
to compose an aircraft appraisal as if called
upon to do so on short notice. Candidates
are given a brief summary of the key findings
of an aircraft inspection report that includes
the aircraft specifications and the maintenance status of the airframe and engines.
Market-related data such as orders, deliveries,
storage, numbers for sale and recent transactions of comparable aircraft are provided.
Candidates then have to produce a coherent appraisal report based on Section 8 of
the Principles of Appraisal Practice and Code
of Ethics that includes the essential elements to be included in any appraisal report.
The report must be complete and set out in
a logical, easy-to-read fashion. Candidates
have to make various value calculations
with respect to the aircraft specifications,
maintenance status data and the engine 'disk
tables,' and correctly incorporate them into
their determination of value.
The Finance exam requires candidates to
understand finance concepts that may be
elements of certain types of appraisals and
be able to calculate such items as net present value from a stream of lease payments
and the rate of return for an income stream.
The Technical exam requires candidates
to understand technical terminology, the
basic concepts of commercial aircraft maintenance programs, types of maintenance
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Jetrader - Winter 2016

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