Is Flipping Bizjets the Next Big Trend in Aircraft Sales?

When most people think of flipping, houses come to mind. But lately the term has started to apply to aircraft. The demand for one aircraft in particular — the Gulfstream G650 — has caused a few sellers to part with this sought-after aircraft for profits between $5 and $10 million per flip.

The G650 is the must-have plane for billionaires, including Ralph Lauren and Oprah Winfrey, who have lined up to place their orders. Exactly why is this jet such a hot item? It’s Gulfstream’s flagship aircraft and it’s succeeded in creating a new category of ultra-long-range business jets. The G650 is capable of comfortably transporting up to 18 passengers, making it the king of the large cabin private jets with a range of well over 7,000 miles and a maximum speed of Mach 0.925.

It’s also very scarce — just around 30 jets have been delivered since its launch — despite the strong demand. In fact, current demand is so high that a buyer who hands over a $5+ million deposit and signs a contract today won’t see their G650 until the third quarter of 2017. Some people simply don’t want to wait this long, even if that means paying above market value for any G650 that comes up for sale.

One of the most recent examples of aircraft flipping was the sale of a 2013 Gulfstream G650 owned by Fabiana Flosi, the wife of Bernie Ecclestone, president and CEO of Formula One racing. She acquired the jet in July and sold it in September. The 2013 list price for a G650 is $64.5 million, but Ecclestone and Flosi paid less. They sold it to Vichai Srivaddhanaprabha, a Thai businessman and the owner of the UK’s Leicester City Football Club, for $72 million.

Although flipping aircraft was popular in the years leading up to the economic crash of 2008, it hasn’t been as common in recent years. Still, the recent Gulfstream sales have made some wonder if aircraft flipping is coming back in vogue. Most likely, the answer is no: G650s are rare, and Gulfstream has rules in place to discourage the practice. There are now anti-speculation clauses in its contracts that prevent placing orders for aircraft simply for the purpose of selling (or flipping) them. Gulfstream contracts state that if a customer who has ordered an aircraft attempts to sell it before delivery, the manufacturer has the right to withdraw warranties thereby reducing the aircraft’s value by millions. Of course, once an aircraft is delivered, the owner is welcome to do with it as they will.

Plus, the fact remains that the G650 is an incredible aircraft, and many who get their hands on one won’t be so quick to let it fly off into the sunset — no matter how much profit they stand to make!

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