Are you in the market for a new private or business jet? If you’ve purchased an aircraft in the past, you know it’s a complicated, time-consuming process. You don’t just stroll into the nearest dealership, sign some papers, offer a handshake, and walk out as a new jet owner. Those looking to acquire jets have numerous decisions to consider, such as ownership type, whether to purchase new or used, various usage requirements, and more. If you’re thinking of your next jet purchase as a DIY project, however, you’re likely to get in trouble. There are a few mistakes and pitfalls inexperienced jet buyers should look out for.
Don’t let nonexperts sway your decision
You wouldn’t purchase a new car based on the advice of your aunt’s next-door neighbor. Well, you might, but you’ll also likely regret it. A station wagon with room for four kids and a dog might be perfect for her, but you were looking for something a bit sportier. The same goes for buying a private or business jet. Your friend may love his large-cabin Gulfstream, but you fly mostly short business jaunts with three or four passengers. Without considering your needs and consulting with an expert, you may wind up with something that doesn’t haul enough cargo or passengers, requires too many fuel stops, or has unnecessarily high operating costs.
Consider your purchasing options
Will you buy new or pre-owned? Too many buyers believe that, if you’re going to purchase a jet, you might as well get the newest model. New might be the best way to go in some cases, but you’ll pay a higher price and you may not be able to get your hands on it for a couple of years. However, new jets typically come with a five-year tip-to-tail warranty.
Acquiring a pre-owned jet can mean getting a good bargain. Just remember that retrofitting and ensuring your new-to-you aircraft meets FAA regulations can be expensive and time-consuming as well. Keep your options open and conduct diligent research to get the most value out of your purchase.
Understand sales tax implications
It usually takes an expert to unravel all the regulations, exemptions, loopholes, international rules, as well as other purchase and use considerations. It makes a difference where you buy, when and where your jet is delivered, where you fly, who is managing your aircraft, and so much more. And tax laws change all the time, so you need — or, better yet, your consultant needs — to stay current. You don’t want to be surprised when the IRS comes knocking.
Get a pre-buy inspection
Invest a bit of time and money to ensure the aircraft you’re considering has no major maintenance or safety issues. Work with a trusted, licensed mechanic to inspect for issues so you’re not hit with millions in expenses after a short while in the air. If your mechanic finds any problems, your consultant may be able to use these as bargaining chips to negotiate a better purchase price.
Remember that buying a jet is not a money-making asset. Your jet will depreciate and drop in value over time. However, savvy jet owners agree purchasing a private or business aircraft offers many benefits, making it a worthwhile investment for those who do their due diligence.
Contact the experts at L & L International if you need assistance acquiring or selling a private jet.
Today’s private and business jet owners expect reliable high-speed internet connectivity when in the air — both for productivity and entertainment. And their passengers do, too. Luckily, it’s more affordable than ever. Gogo Business Aviation, a leading provider of innovative broadband connectivity solutions for aviation, recently launched its Gogo AVANCE L3 system, a low-cost in-flight connectivity system with a lightweight form factor that even comes with free digital content.
Features and benefits
The AVANCE L3 system offers many benefits for private and business jet owners as well as their crews and passengers. While it’s possible to install the system on all sizes and types of business aircraft, AVANCE L3 is especially suited for smaller aircraft. The platform provides a full set of “Smart Cabin” features that allow passengers access to the cabin management system (CMS) to customize their experience. They also have access to all available data, maps, and entertainment systems. The system enables flight department teams to manage the number and types of devices allowed to connect.
How does it work?
The AVANCE L3 smart router connects to the Gogo Biz data network, which provides connectivity for email, voice calls, and optional Gogo Text & Talk. Gogo Vision, which provides access to moving maps, weather, flight information, movies, and television shows, is also available through AVANCE L3. Gogo AVANCE L3 itself is available in three configurations, depending on jet owners’ needs and budgets. The Core plan provides email, voice, and internet browsing for five devices. The Plus plan adds full internet access for seven devices, and the Max plan offers the Plus functionality for as many as 25 devices.
Gogo AVANCE now also offers a selection of 30 digital magazines for Gogo customers and those who fly in Gogo-equipped business jets. Magazines include titles such as Newsweek, Forbes, People, and Golf Digest, and jet owners determine what’s available through their Gogo plans. Gogo offers this content to AVANCE and Vision customers as well as a selection of Bloomberg News content on hot news topics from around the world. This digital content is updated monthly via Gogo Cloud from customers’ hangars as well as Gogo Cloud locations in the United States and Europe.
Connectivity: More than a luxury
Gone are the days when internet connectivity during business and private flights was a nice perk. Today, passengers expect and even demand it as flight time isn’t synonymous with downtime for business executives. When they can conduct so much business online, internet connectivity means productivity continues while en route to nearly any destination. But connectivity doesn’t just mean business. It also can provide relaxation and entertainment for customers who need a little business break or to keep up with personal correspondence. If you’re looking to acquire a jet, internet connectivity is a likely consideration for your next purchase. Talk to an expert to ensure you get the right connectivity solutions for your needs.
There’s a lot going on in the private and business aviation industry: Many soon-to-be-released luxury jets are about to enter the market, pre-owned jet prices are stabilizing, and the ADS-B mandate deadline looms. Here’s an overview of what’s happening and what it means for those trying to decide whether to purchase new aircraft, go with pre-owned models, or upgrade their current jets.
Quite a lot of buzz surrounds new luxury jet models coming soon to market. Here’s a taste of what’s on the horizon for those looking to purchase a new high-end aircraft:
Boeing 787 Dreamliner — If you demand nothing less than the height of luxury, the VVIP Dreamliner might be the next jet for you. With the ability to fly nonstop for more than 17 hours, this model provides flyers plenty of time to enjoy its more than 2,400 square feet of cabin space with heated marble floors, a king-size bed, walk-in closet, and full-size shower. If you want to test it out before buying, you can charter this penthouse in the sky for you and 39 of your closest friends for a mere $70,000 per hour.
Embraer Legacy 500 and 450 — Brazilian aircraft manufacturer Embraer’s Legacy 500 and its slightly shorter sister, the Legacy 450, are some of the fastest jets in the midsize and “mid light” aircraft categories, delivering a high-speed cruise of Mach 0.79 to 0.82, respectively. They are some of only under-$50 million jets that feature full fly-by-wire flight controls. The Legacy 450, with a range of 1,300 nautical miles (nm), has a cabin four feet shorter than the 500, which has a 3,000-nautical-mile range. Both feature superb passenger comfort, low turbulence, and low noise levels.
Gulfstream G500 — Gulfstream’s long-range, large-cabin business jet is scheduled to enter into service in 2019. Its Pratt & Whitney Canada PW814GA engines reduce fuel consumption as well as cut emissions and noise. It sports 27-inch-wide seats with footrests for extra comfortable rides for as many as 19 passengers and includes a large, fully equipped galley. The G500 has a range of 5,200 nm and offers a state-of-the-art Wi-Fi and entertainment system as well as full digital fly-by-wire flight controls.
Pilatus PC-24 — The PC-24 super versatile jet is the first business jet from Swiss manufacturer Pilatus Aircraft. The 10-passenger aircraft, for which deliveries began in January 2018, has a list price of just under $9 million. Its large aft door can handle standard cargo pallets, it flies as fast as 440 knots, and the PC-24 can fly six passengers 1,800 nm. Buyers can even choose among seven cabin layouts for this area that offer more overall space than its more expensive competitors. In addition, the light jet can use grass, gravel, or dirt runways as well as runways less than 2,700 feet, according to the Barron’s article.
Changes in the pre-owned market
Buyers who are not ready to go all-in on a new jet might want to take a look at the pre-owned market while they still can. Although the pre-owned Gulfstream market has been struggling over the past several years, according to an AINOnline article, an increase in pre-owned sales, decreasing inventories, and stabilizing prices have contributed to its ongoing recovery. For example, less than 4% of Gulfstream G650 and G550 fleets are for sale, which is extremely low compared to recent years.
Inventories for older Gulfstream models, however, such as the GIV-SP and G-V, are still high. In addition, values for the G550, which had been dropping nearly 20% per year for three years, have leveled off. Plus, new tax rules that allow for 100% depreciation during the first year for both new and pre-owned jets will likely boost sales in both categories in the coming year.
For those who plan to acquire a pre-owned aircraft, keep in mind the ADS-B mandate, which requires all aircraft be updated by January 2020. ADS-B Out equipment can be expensive, and slots for performing the upgrades are filling up fast. You don’t want your pre-owned new-to-you jet to lose its value or end up in the scrap heap because of your failure to comply.
Buying a jet, whether the latest model or a pre-owned model, can be a daunting, time-consuming process. To make the best of your next jet purchase, seek out an expert who understands the markets and can help you get the aircraft for your needs at the right price.
The expert jet brokers at L & L International are here to help you acquire the perfect jet.
In the final weeks of 2017, the country watched the debate, negotiations, and final passage of the federal tax overhaul. One segment of the population that was closely watching included private and business aviation industry members, and they had a vested interest in the outcome. Some tax cut provisions, however, have created a stir among those in the general public. Here’s the story — and a rundown of what this tax reform means to jet owners and those who plan to purchase in the near future.
Exemption for private jet management — The provision giving rise to public disapproval is, in actuality, simply a clarification of an earlier law. Current tax laws require aircraft management companies to collect a 7.5% ticketing tax. However, it had been unclear if companies that staffed and maintained private jets were considered aircraft management companies. Then, in 2012, the IRS ruled these service companies were in fact considered aircraft management companies and therefore should be collecting the tax and should be liable for back taxes. After protests, however, the IRS stopped its efforts to collect taxes until further review. The tax reform bill makes that ruling formal: Aircraft management companies are not responsible for paying the 7.5% per-ticket airline tax.
Depreciation benefits — If you plan to purchase a new business jet in the near future, this one’s for you. You will get to depreciate 100% of the aircraft’s value during the first year. No, that’s not a typo. Under the act, bonus depreciation applies to both new and pre-owned aircraft purchased between Sept. 27, 2017, and Jan. 1, 2023. This is great news for business aviation industry members, and the National Business Aviation Association (NBAA) predicts it will lead to more jet sales and open new markets to the benefits of business aviation.
Like-kind exchange elimination — The provision that allows businesses to defer taxes on newly manufactured business property purchased to replace older equipment is repealed in the tax overhaul. Now, business property no longer includes aircraft used for business purposes. This is not good news for the industry overall, but the depreciation benefits in the bill will largely offset lost like-kind exchange benefits.
Those are just a few of the main provisions affecting private and business aviation industry insiders. Although the loss of the like-kind exchange may hurt some corporate jet owners wishing to upgrade their aircraft, the ability to expense 100% of your new jet within the first year makes now a great time to purchase a new or pre-owned aircraft. But buyer beware: With these new legal changes, it’s important to seek advice from an expert partner so you can make the most of your purchase under the act.
Considering acquiring a business jet? Here’s what you need to know
100% depreciation — The new tax plan allows owners to write off 100% of the cost of their business jets — including pre-owned jets — for purchases made after Sept. 27, 2017. Bonus depreciation will end Jan. 1, 2023.
Lower corporate tax rates — With less to pay in taxes under the new plan, companies whose corporate leaders have never owned aircraft may consider investing in business jets.
Reduced inventory — As more buyers enter the market, pre-owned inventories may become sparse.
Higher jet prices — Fewer pre-owned jets for sale and long wait times for new jet deliveries may drive prices up.
If you’re ready to begin your search, the best time is now. How would you like to fly?
The expert jet brokers at L & L International are here to help you acquire the perfect jet.
The 2008 financial crisis created what many in the private and business aviation industry view as a “lost decade” with slow sales and decreased flight numbers. They liken the current situation to the lost decade that occurred between 1986 and 1996 when business jet deliveries fell off at about 350 aircraft annually. According to an AIN Online article, Jon Raviv, U.S. aerospace and defense senior equity analyst at Citi Research, said overproduction of aircraft in the 2000s created a “shadow” pre-owned inventory which “cannibalized” the market for new jet demand this decade.
The end of an era?
But the light and midsize jet market may be nearing the end of the lost decade. Raviv expects recovery to be slow — with sales in these sectors remaining flat at an average of 444 deliveries per year. Although the economy is stabilizing and the jet market has adjusted to demand, some corporate leaders are still skittish, so it will likely take time to get back to prerecession numbers.
While the light and midsize jet market appears to be poised for an upswing, the large-cabin jet market may be on the verge of its own lost decade. Over the past 10 years, jet deliveries in this segment surpassed demand, creating a glut of inventory and driving prices down. However, new Gulfstream and Bombardier models soon to hit the market may help lessen the impact.
Another factor contributing to slow aircraft sales is the fact that other private and business flight options — charters, memberships and fractional ownership — are quickly gaining popularity.
A good time to buy?
Although jet sales are down, aircraft manufacturers have been slow to catch on. Though some manufacturers have cut back a bit, there is still a large excess of jets available. This is driving deep discounts on new jets and fueling a price decrease on pre-owned jets. In fact, pre-owned private aircraft prices were down 16% year over year in August 2017. Case in point: A 5-year-old plane sold in 2016 was worth just 56% of its original price, down from 2012’s 64% value on jets half a decade old. This is a boon for buyers as jet brokers are offering great deals, enticing them to purchase new and pre-owned jets.
But many experts believe things are starting to look up for aircraft sales. With Gulfstream and Bombardier releasing their new jets — the G500 and G600 as well as the Global 7000, respectively — in the coming months, many believe sales activity will begin to slowly and steadily pick up. It’s difficult to predict how quickly the market will rebound, but for the time being, buyers are likely to get their hands on some tremendous bargains on both new and pre-owned aircraft.
Contact the experts at L & L International if you need assistance acquiring or selling a private jet.
View the Gulfstream G-IV SP available for sale here.
The holiday travel season is here. Will you be joining the throngs of people in long security or luggage lines at your local airport this year? Or will you be one of the lucky ones who doesn’t have to book a flight months ahead, can pick up family members along the way, and can enjoy a stress-free private flight to your destination?
Remember last year when you swore you would never fly commercial over the holidays again? You put a new private jet on your wish list — and that’s exactly where it stayed. But it’s not too late to get that jet for the holidays — 2018 holidays, that is. Purchasing a jet tends to take about a year, so if you don’t want to be in the same boat next year, start the process now.
The time is right
In addition to the need to start your jet purchase now so it’s available for next year’s holiday travel season, now is an optimal time to purchase. In fact, business jet prices will likely continue to drop through year’s end. Older models aren’t hot sellers now, so they’re staying on the market longer, driving up inventory numbers. Plus, more owners tend to sell during the fourth quarter, which could add to pre-owned jet availability. There may be no time like the present to start on next year’s holiday gift to yourself.
Get the ball rolling
In a sellers’ market, could this be the year you take the plunge and buy a jet? Before you dive in, do a cost-benefit analysis to make sure it’s a financially sound move. Industry insiders estimate that 350 to 400 flight hours annually justifies full private jet ownership. If you meet the flight-time criterion:
Determine your needs. What are your typical passenger and distance requirements? Do you need a light jet that can carry five to eight passengers 2,000 miles, a large executive jet that can carry 12 passengers 4,000 miles, or something in between? Will you try to get a good deal on a pre-owned jet, or do you want to skip the potential for maintenance issues and order a new one? If you’re considering buying new, you might have to stretch your goal to the 2019 holidays as you’ll need to allow about two years for delivery.
Find a match. Contact private jet sales professionals and search major aviation sites online for an aircraft that meets your specifications and pricing needs.
Take it for a spin. Most salespeople or manufacturers will arrange for you to take it for a test drive — at your expense.
Have it inspected. This is a multimillion-dollar purchase. Make sure it is in flying condition and worth the asking price.
Get financing. This may take some work, but a stronger economy means more institutions are willing to finance both new and used aircraft purchases.
If you’re feeling a bit overwhelmed about the process, keep the benefits in mind. Jet travel allows company executives to keep pace with the global marketplace. A private jet can take you directly to your destination, usually with little prior notice, and you can relax or conduct business during your flight. And don’t forget about one of the biggest benefits: depreciation. Business jets depreciate 50% by the time they’re five or six years old, which is a substantial tax break.
Make holiday travel fun again. Start today and have your jet by this time next year. But you don’t have to do it alone. In fact, you shouldn’t: Partner with a reliable aircraft consultant to guide the entire process.
Contact the experts at L & L International if you need assistance acquiring or selling a private jet.
Remember when business aviation was a luxury that only leaders of the largest companies or the wealthiest individuals could afford? Or perhaps that’s what you still think. Many business leaders no longer think the corporate jet is a luxury or status symbol. And, according to a National Business Aviation Administration (NBAA) survey, “Business aviation is the sign of a well-managed company, and a tool that provides unique advantages for American companies.”
Business aviation is up
More and more savvy company leaders are realizing the value proposition business aviation offers. According to Argus TRAQPak data, business aviation activity increased more than 5% in August, making it the largest month of operations since May 2008. Those results included a 10.9% year-over-year increase in Part 135 charter activity and a 7% increase in Part 91K fractional activity. Activity for large-cabin aircraft was up 7.2% while midsize jets were up 4.8%. All this increased aviation activity is considered a good indicator of future jet deliveries.
Justifying the cost
The NBAA report concluded that companies with business aviation departments had a greater level of financial success than those without, and those who cut back on their aviation departments experienced financial downturn. In addition to increased shareholder earnings, the report shows that business aviation increases market share, profit and asset efficiency as well as non-financial benefits such as employee and customer satisfaction.
Saving time is one of business aviation’s biggest benefits. And since time is money, it is one of the biggest cost-saving factors the sector offers. In today’s fast-paced international business arena, staying competitive means being able to get as close to your destinations as quickly as possible with little notice. It might even require traveling to more than one meeting location in a day. With commercial air travel, it might take days to make it to the same destinations with connecting flights, fewer airport locations, ground transportation hassles, and more. Commercial airlines cannot provide the flexibility that business executives require.
Business aviation also lets you make better use of in-flight time. Most jets offer internet and satellite communications capabilities as well as meeting rooms and office space. And you can customize your jet to meet specific needs to maximize productivity — or relaxation. Business aviation also allows you to provide more in-person contact with customers, employees, and partners; perks and convenience for colleagues, employees, and family members; and, yes, it can even increase your company’s status in the eyes of others.
A good time to purchase?
The NBAA survey also points to a growing confidence in business aviation. Many respondents indicated they believe we’ve passed the low point in this cycle and are on an upswing. In addition, according to AINonline, “the percentage of survey respondents who indicated a better than 60 percent probability of purchasing a new jet over the next year is the highest in the past two years.”
As business aviation rebounds from the recession, manufacturers are gearing up to meet new demands and are offering great deals on existing inventory. That, combined with a decrease in young used jet inventories, means that this might be a great time to purchase a new jet. Business aviation just makes good business sense. Company leaders who embrace it will likely find themselves in better positions to take advantage of today’s global marketplace.
According to a National Business Aviation Administration (NBAA) and NEXA Advisors survey sponsored by industry insiders like Bombardier and Textron, “evidence repeatedly finds that business aviation contributes meaningfully to a company’s enterprise value, and continues to be a powerful tool of the best-managed companies in America.” The study also goes on to state companies whose leaders shut down their aviation departments had less financial success than those who maintained their aviation operations.
What are GE leaders thinking? Do their cutbacks signal a change in attitude about corporate air travel? Time and time again, companies have proven the business case for private aviation.
Productivity — How valuable is your executive team’s time or your sales team’s hours? When you can cut out the security lines, baggage claims, ticketing, ground transportation lines, and other time-consuming factors that come with commercial airline travel, you save valuable time. You can work en route and even host meetings on your company’s private jet. Quicker time to market for products and services, easier collaboration, and customer relationship-building are all key benefits of using business aircraft.
Agility — Being able to move quickly can make or break a business deal. A private jet can not only get you closer to your destinations quickly — even when traveling to hard-to-reach places — but it can also hang around, waiting to take you home if necessary. That means no messing with commercial, fractional ownership, or charter scheduling and availability problems.
Employee satisfaction and retention — Providing the best productivity tools for management, sales, and technology team members promotes greater employee retention. When employees know their work and time is valuable, they experience greater job satisfaction.
Customer satisfaction and retention — Jet travel allows business leaders to access hard-to-reach customers, leading to greater customer satisfaction and retention as well as offering opportunities for securing new customers and revenue sources.
Business globalization — As international businesses proliferate and the infrastructure needed to support them develops, business professionals will need to be quick and agile to remain competitive. Business aviation is crucial to fully participating in today’s global marketplace.
As industry insiders continue to question the logic behind GE’s decision, the NBAA reaffirms its position that business aviation makes companies “more efficient, productive, nimble and competitive.” Cost-cutting measures are good, but not at the cost of productivity. Perhaps we’ll learn there were other underlying reasons for the company’s cutbacks, and we’ll most likely learn whether the move accomplished desired goals. But until proven differently, there’s no reason to put that jet purchase on hold.
Imagine a flight experience that lets you book arrivals and departures that work around your schedule; allows you to personalize your flight with unique choices in food and drink, entertainment, or office amenities; and doesn’t involve baggage claim, flight delays, or long security lines. If you’re a seasoned jet traveler, you probably can’t imagine any other flight experience. And you’re willing to pay for it.
In the early days of private jet travel, the only way to experience its luxury was to own your own jet or be employed by someone who did. Then the charter industry brought that experience to a slightly less wealthy tier of people. These days, you have several options for enjoying the perks and benefits of private jet travel that don’t require the cost of full ownership.
A common way to begin experiencing private jet travel is through private charter, in which you basically rent a jet by booking and paying for a specific flight on a specific jet. Charter flights allow you to get closer to your destination more quickly; thus, letting you spend less time travelling and more time at your destination.
While many charter flights have rates between $500 to $2,000 per hour, some aircraft “could be $8,000 per hour or more.” Not terrible for short jaunts, but an overseas flight could set you back a hundred thousand dollars or more. The good news: That price is for the jet, which could hold one person or 20. Spread this out over the number of passengers, and the overall price of charter flights — though not cheap — is more affordable.
When you think about a business executive’s valuable time, the efficiencies of jet travel are often well worth the price of a charter. And because you are paying for the flight, the provider will typically be open to providing any requested amenities such as Wi-Fi, conference rooms, pet accommodations, or specific foods, décor, and entertainment. And with so many charter companies around, you won’t find it difficult to find the right plane at the right price for the right time. Charter flights are usually great options for those who travel infrequently. For those who travel by air often, fractional ownership may be a more economical choice.
Own a fraction
Fractional jet ownership is another option for jet travel without the hefty price tag of full ownership. Fractional jet ownership is like buying into a timeshare luxury condo: For a set price, you have part ownership and get to use it a certain number of days per year or, in the case of a jet, a certain number of flight hours.
One difference is that you aren’t buying a portion of one jet but, rather, a portion of a fleet, which contributes to flight availability. All the part owners share in staffing, insurance, and maintenance costs. Fractional ownership is most appropriate for people who travel more than 50 hours per year and need flexibility because of busy and unpredictable schedules. Depending on the type of jet and share you buy, costs can vary significantly. Typically, a one-sixteenth share will give you 50 hours of flying annually. Share owners can typically sell back their unused shares at the end of their contract terms and can also share in depreciation tax advantages.
Play your cards right
Jet cards offer the opportunity to pre-purchase flight hours. You purchase a certain number of hours on a particular size and type of jet that fits your needs. The hourly rate is fixed for the term of the card, usually one to two years. By buying in bulk and for a static rate, you get a discounted rate over options such as private charter. Before purchasing a card, though, make sure you will be flying enough hours to make it economical. Unlike purchasing shares of a jet, you don’t get to participate in any tax advantages.
Share a seat
With the above options for private jet flights, there will be times when your flights have empty seats — or even empty legs. If you could sell some of those seats or trips, you could recoup some of the upfront flight costs. Well, there’s an app for that! If you have extra seats on your booked charter you’d like to sell, there are apps available to facilitate the process. Or you might use empty seats as perks for your employees, friends or family. Seat-sharing simply helps make private flying more cost-effective by making use of empty seats on already-paid-for flights.
Of course, the ideal situation for those who can afford it is to purchase a private jet outright. With your own private jet, you have all the luxury and convenience of private air travel at your fingertips to wherever you want, whenever you want, along with the associated tax advantages of ownership. But for those who can’t afford the $3 to $90 million price tag, it’s good to know your alternate options. Which one you choose will depend on how flexible you are, how often you fly and how much you want to spend. It’s always a good idea to enlist the help of a jet broker or consultant to explore your options.
For most people looking to purchase their first jets, choosing pre-owned aircraft is a sensible way to go. A pre-owned jet will cost substantially less than a new one and, although it won’t have the latest cutting-edge technologies, a 15- or 20-year-old jet differs very little in functionality, safety, and performance from new jets. The popularity of the pre-owned market, as well as more people holding on to and refurbishing their older jets, has resulted in pre-owned jet inventory levels at the lowest point since 2008. How does that figure into today’s private and business aviation market?
With a decline of 0.9% over last year, 10.8% of active business jets are for sale, and sales of pre-owned jets are up 6% year over year, leading many to believe the business aviation market is starting to bounce back. One thing is for sure, the price of a jet is at its lowest in a very long time — but for how long? If you might be in the market for a new jet any time soon, you might want to start looking sooner rather than later as there may never be a better time to buy.
Benefits of new
There’s just nothing like the thrill of walking onto a new jet and calling it yours. But that feeling is not the only reason buying new might be a good choice. Lenders typically offer better financing terms on new jets, and new aircraft typically come with warranties, so repair and maintenance costs won’t add up to as much during the warranty period.
Another reason people are choosing to buy new is to get the latest and greatest. New jets have state-of-the art equipment for greater durability, safety, fuel efficiency, and comfort. New jets will also be equipped with the mandated Automatic Dependent Surveillance-Broadcast (ADS-B), which is required by Jan. 1, 2020.
You can customize a new jet with your own design and equipment preferences, and resale values for new versus older pre-owned jets are much higher. So, don’t just consider the initial cost when choosing between buying new and pre-owned; you need to consider the jet’s entire life cycle.
When choosing between new, pre-owned, or whether to buy a jet at all at this time, there are many factors to consider. With economic and political uncertainties in the world today, it’s difficult to predict where the market is heading and whether prices of new and pre-owned have bottomed out. Every potential buyer’s situation will be different, so it’s important to do your research to determine the best solution for you.