ISTAT appraisers’ education project
ISTAT Appraisers’ Program
and Aircraft Appraising —
An Appreciation
T
By Neil Whitehouse, Senior Appraiser. Editor and Contributor: Jack Feir, Appraiser Fellow and Member Emeritus.
This article is the first of a series to be
published in Jetrader to tell the ISTAT story
from the appraisers’ perspective so that
members can better appreciate the orga-
nization’s origins, ethics and values, and
how the ISTAT Appraisers’ Program remains
one of ISTAT’s cornerstones.
ISTAT is now 33 years old, and most of
the membership knows the organization
as it exists today, but knows little of its
origins and founding purposes.
With input from a number of ISTAT found-
ers, significant contributions and editing
from ISTAT Fellow and Member Emeritus
Jack Feir, and at the behest of the Senior
Appraisers, I wrote this ‘appreciation,’
which will be run as a series of six articles
in the magazine. This article tells of ISTAT’s
origins, the categories of appraiser and the
qualifying examinations.
Future articles will address appraiser
categories, value, aircraft economic life,
aircraft fleet life, engine values, aircraft
and engine records and appraisals.
ISTAT 101
The purpose of ‘ISTAT 101’ is to educate
ISTAT members, consumers of apprais-
als and the commercial aviation finance
community about the ISTAT Appraisers’
Program, different types of appraisals and
the proper use of appraisal definitions.
ISTAT Appraisers’ Program
At ISTAT’s inception in 1983, the
Society’s Code of Ethics was adopted. The
code begins with, “It is felt by all mem-
bers of our Society that we promote among
members and those employed by our busi-
ness, the highest ethical standards.”
32 The official publication of the International Society of Transport Aircraft Trading
From its origins in the early 1980s, the
ISTAT Appraisers’ Program has been both
the cornerstone of ISTAT and the manifes-
tation of the high ethical standards and
technical competence for which ISTAT has
always stood and will continue to stand.
Beyond providing a credentialing process
by means of setting the required levels
of professional aircraft appraising expe-
rience and a series of examinations, the
ISTAT Appraisers’ Program contributes a
unique level of professional credibility to
the entire organization; the responsibility
for which resides in the hands of the ISTAT
Certified Appraisers and the International
Board of Governors, as well as with the
ISTAT organizational governance provided
by the ISTAT board of directors.
Origins of ISTAT and the
ISTAT Appraisers’ Program
The initial motivation for the creation
of ISTAT was to create a non-profit indus-
try forum for commercial aircraft buyers,
sellers, investors, manufacturers, airlines
and industry consultants, and the recogni-
tion that an organized effort was needed
to develop a set of standardized terms
and methodology so that there would be
increased confidence in the appraisals that
were required for aircraft leases and aircraft
financings. From this evolved the ISTAT
Appraisers’ Program.
Complex, high-value and specialized
machines as commercial aircraft did not
fit well in the structure of the American
Society of Appraisers’ (ASA) equipment
appraisal format. In the early 1980s, the
ASA was not interested in creating a sepa-
rate aircraft appraisal program, but yet
there was a need for such a specialized
program to provide professionalism and a
standardized form, structure and substance
to aircraft appraisals.
In February 1983, Joseph Murphy, who
had founded and published Air Transport
World; Morten S. Beyer, the eminent indus-
try consultant and aircraft appraiser of
Avmark Inc.; and Tim Watkins, representing
James Bryan, original founder and CEO of
Aviation Sales Company; met with indus-
try legend George Dutton of Eastern Air
Lines and agreed on the general outlines
of a charter for the new society; its name,
membership dues and the scope of services
offered to its members. This evolved from
discussions and contributions from Andrew
La Stella, then vice president, equipment
management group, Manufacturers Hanover
Leasing Corporation; Jeffrey Knittel, then
equipment officer, Manufacturers Hanover
Leasing Corporation; Ronald Anderson, then
vice president of aircraft acquisitions and
sales, FedEx; and pilot and aviation profes-
sional Michael Metcalf. These profession-
als, along with other contributors, were,
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 pres-
ident, 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 exami-
nations and extracted the best and most
applicable aspects for aircraft appraising.
Mr. Matthews canvassed aviation consulting
companies for candidates to be grandfa-
thered 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 examina-
tions 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 sec-
ond 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 Adminis-
trative Director until 2012 when ill health
forced him to resign. During Bill’s service,
Jack Feir had been his unofficial assis-
tant 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 ethi-
cal and technical standards and precisely
worded definitions. ISTAT appraisal defini-
tions are the financial and legal standard
for commercial aircraft appraisals and are
the value basis for billions of dollars of air-
craft financings annually. ISTAT Appraisers
have qualified as aircraft valuation experts
in courts around the world.
ISTAT Appraiser Categories
The ISTAT Appraisers’ Program has estab-
lished four professional status categories:
• Appraiser
• Senior Appraiser
• Appraiser Fellow
• Appraiser Emeritus
Appraiser and Senior Appraiser catego-
ries are achieved through a combination
of professional experience and exami-
nations, which cover general valuation
theory, technical expertise, finance and
professional ethics. Appraiser Fellow and
Appraiser Emeritus are honorary designa-
tions 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 apprais-
als about the program and the appropriate
use of appraisals and appraisal definitions.
Appraiser Examinations
To sit for the Appraiser exams, a can-
didate 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 sce-
narios 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 apprecia-
tion 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 mainte-
nance status of the airframe and engines.
Market-related data such as orders, deliveries,
storage, numbers for sale and recent transac-
tions of comparable aircraft are provided.
Candidates then have to produce a coher-
ent appraisal report based on Section 8 of
the Principles of Appraisal Practice and Code
of Ethics that includes the essential ele-
ments 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 pres-
ent 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 main-
tenance programs, types of maintenance
Continued on page 50
Jetrader • Winter 2016 33
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categories of aircraft parts (such as hard
time components, rotables, expendables,
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managed in the maintenance process. The
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an extensive glossary of terms candidates
must understand. Candidates have to dem-
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technical elements are integrated into the
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Senior Appraiser Examinations

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To sit for the Senior Appraiser exams,
an appraiser must have several years of
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conducting aircraft appraisals.
The Senior Technical exam includes all
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of the topics of the Technical exam and
includes ‘refresher’ questions related to
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The Senior Technical exams are graded at
a higher level, and the appraiser has to be
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able to demonstrate a more detailed and
nuanced comprehension of the concepts
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cal issues, and more broadly, in the global
context. A Senior Appraiser has to be able
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to demonstrably incorporate the many ele-
ments — macro and micro — that may bear
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The exam is graded partly on the exam-
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on the ability to explain the issues and
concepts in a way that is understandable
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tively explain complex technical subject
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indicator of a good grasp of the material,
and a skill often required in litigation and
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matters. The ISTAT Appraisers’ exams are
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often require more than one attempt to
qualify as a Senior Appraiser.
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Despite the extensive requirements,
becoming an ISTAT Appraiser yields great
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next issue of Jetrader, we will cover the
concept of value, economic inputs, unit
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costs, aircraft performance and the impact
technology has on value.
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50 The official publication of the International Society of Transport Aircraft Trading