Strike while the iron’s hot, especially if you’re in the market for private aircraft. The sweeping legislation passed by Congress in late December 2017 has reinvigorated the private aircraft market, specifically private aircraft utilized for business purposes. With 100% depreciation in the first year, it’s no surprise the market is booming.
“This new legislation has driven an increase in purchase conversations,” noted Matt Hall, Jet Linx Denver Vice President of Sales. “For any prospective buyer, the best advice I can give would be to consult with your tax professional now to best leverage your tax benefits, then begin engaging with an aircraft broker and not wait until next year. The sooner you make your move, the more options you will have to choose from.”
According to Daniel Cheung, a CPA with Aviation Tax Consultants, businesses can utilize the 100% depreciation for new and used equipment and there is not a purchase price point above which the tax advantage is phased out, nor is there a cap. “For anyone with a real depreciation need and that qualifies, having the opportunity to take 100% depreciation in year one is a first,” Hall mentioned. “We are seeing many current aircraft owners upgrade to newer aircraft which means there’s an increased amount of used aircraft on the market, but at the same time, we are seeing the used inventory available shrinking.”
Flying privately delivers numerous benefits assiduous business owners appreciate, from avoiding the long wait times at the airport to increased productivity while in the air and better time management overall. “Having the ability to attend meetings in more than one city or state and arrive home in time for dinner – that’s productive,” Hall stated. “Giving a company complete autonomy to operate is a competitive advantage to grow and retain business. If you’re flying over 100 hours per year or have multiple office and investments in different cities and states, you should consider an aircraft purchase. Any or all of these reasons should be a trigger to let Jet Linx put options together to show how we can help your company be more efficient and competitive than ever.”
Maybe you have tabled the idea of purchasing an aircraft because you are concerned about the commitment of aircraft ownership. “I think the biggest fear is the presumed commitment of time that owning a business jet will take,” Hall divulged. “This is why Jet Linx is so successful and why our aircraft management program is the best in the industry. We not only take the stress off the principle, but the supporting cast from administrative assistants to the CFO. We offer a complete turnkey aircraft management program and manage all aspects of the ownership experience.”
One common misconception of prospective aircraft owners is a concern about their visibility into the operation or scheduling of their aircraft. “Every aircraft in the Jet Linx aircraft management program is structured in line with that specific owner’s need, wants and flying patterns,” Hall explained. “During the onboarding process, Jet Linx assesses how involved the owner wants to be in every aspect, from the pilot interview process, to charter flight approvals for each revenue opportunity and what sort of accounting features and statements they would like to see. We believe in full transparency for a seamless ownership experience.”
Owning a private aircraft offers flexibility in structure and tax benefits on a state and national level. In today’s economy, more than any other time in the aviation industry, Hall notes there are many options for financing and leasing. “Capital cost is an important component, but so is the residual value consideration for the type of aircraft someone is looking to purchase. Jet Linx can help discern the best aircraft based on the number of those types on the market, the manufacturers continued support for that airframe, and is it still being produced. Based on that data, we can forecast an expectation for residual value down the line. We help every prospective aircraft management client determine the best bang for their dollar in terms of capital cost and operating costs, giving complete confidence to the buyer that they will achieve the best long term value and mission suitability.”