“There is high anxiety that the Trump administration’s bonus depreciation and tax incentives which have benefitted private jet buyers will disappear. That means there may be limited time to take advantage of these favorable financial conditions.”
NORTH PALM BEACH, Fla. (PRWEB) October 28, 2020
Pre-Election Indecision, Continuing Covid-19 Concerns, and Tight Supply of Pre-Owned Aircraft Drive Up Demand for Private Jets in Q4 2020
Growing anxiety about the upcoming election and the possible end of Trump-era bonus depreciation and tax incentives that favor private jet ownership, as well as the ever-shrinking number of pre-owned aircraft, are pushing fourth quarter demand for private jets to an all-time high, according to private jet brokers such as The Private Jet Company (TPJC), which provides sales, acquisition and consulting services to private jet buyers and sellers.
The continuing Covid-19 pandemic also contributes to the demand for private aircraft among businesses and wealthy individuals. Some of the businesses buying pre-owned jets are private charter companies, whose sales have burgeoned since the start of the pandemic. The net result is that the limited number of pre-owned private jets for sale is shrinking. New jet deliveries cannot meet the short-term demand, as manufacturers are sold out for as long as three years from now.
“The stock market and corporate profits are what drive private aviation sales, and the market doesn’t like indecision,” said Daniel Jennings, CEO of The Private Jet Company (TPJC). “There is high anxiety that the Trump administration’s bonus depreciation and tax incentives which have benefitted private jet buyers will disappear. That means there may be limited time to take advantage of these favorable financial conditions.”
The 2017 tax cuts allow 100% depreciation in the first year of ownership for items such as new or pre-owned aircraft used for business. The 2020 CARES Act includes a five-year net operating loss carryback that permits tax payments going back to 2015 to be refunded due to a loss in the current year.
Limited time to take advantage of favorable buying conditions
“The last quarter of any year is our busiest time, with buyers looking to close aircraft sales by year end,” explained Jennings. “This year – between the election and Covid-19, the pre-owned jet market is even more intense than usual. Normally, it takes 30 days to complete the sale of a pre-owned jet – although we have done it in much less time. We strongly urge anyone considering purchasing a private aircraft to start the process as soon as possible.”
How tight is the supply of pre-owned jet aircraft?
Jennings explained the discrepancy between the supply of pre-owned jets and the demand. There are over 80,000-plus individuals in the US with $50 million or more net worth, according to the 2019 Credit Suisse Wealth report. Assuming that only 10% of those individuals are looking to acquire a private jet, that translates into 8,00 potential buyers.
In contrast, the total number of pre-owned private jets currently for sale is 2,186, according to JetNet, which tracks the aviation industry market. But the number is smaller when the search is restricted to only those aircraft built in the last 20 years – a paltry 1,256.
“So you have a scenario where 8,000 prospective buyers are chasing only 1,256 planes– or 2,186 if you include aircraft built before the year 2000,” said Jennings.
For more information on acquiring or selling private jets:
Email Info@ThePrivateJetCompany.com or call (310) 980-9069 or log onto https://www.ThePrivateJetCompany.com/
About The Private Jet Company (TPJC)
The Private Jet Company offers sales, acquisition and consulting services for private aircraft in major markets throughout the world. Founded in 2005 with headquarters in North Palm Beach, FL and regional offices in Paris, France and Mexico City, Mexico, TPJC has completed over $2 billion of aviation transactions for individual and corporate owners. In addition to assisting clients buy and sell aircraft, the company works with aircraft management companies to reduce the burden of maintenance and supplement revenue through charters. TPJC also partners with aviation attorneys and tax experts to help clients maximize depreciation, reduce tax burdens and assist in import and export Certificates of Airworthiness.
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Photo caption: 2016 Learjet 70 is an example of pre-owned jet aircraft that is in tight supply in Q42020 due to pre-election uncertainty and continuing concerns about Covid-19.