Buying&Selling 1.qxp_Finance 18/07/2022 15:37 Page 1
BUYING & SELLING AIRCRAFT
Bonus Depreciation Ending: Buyers – Act Now! Looking to take advantage of 100% Bonus Depreciation in your next business aircraft acquisition? With time running out, what’s your best strategy? Leading aircraft brokers Jim Donath, Johnny Foster and Janine Iannarelli share with Dave Higdon…
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hough it’s not a celestial alignment, it has a lot of people looking to the heavens while their financial people pull together the data needed to claim a sun-setting tax deduction while they still can. 100% Bonus Depreciation is due to end at midnight, December 31, 2022. As of January 1, 2023, the incentive drops to 80%. Unless the buyer already possesses their new aircraft, or is ready to act very soon on their intention to purchase one, the mere act of buying and taking delivery may take more time than remains in 2022 – especially for those failing to account for some of the challenges faced by the industry at this time. “Supply of inventory remains the business aircraft sales industry’s big challenge,” notes Johnny Foster, President and CEO of OGARAJETS. “Despite an approximately 30% rise in overall supply over the previous 90 days [as of early July 2022], most make/model markets still have only 2-3% of fleet available for sale. Historically, this figure 26 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE
hovers around 10% in a balanced market. “On the new side, the OEMs have full order books on most business aircraft makes and models for at least the next 24 months. Several models are pushing into 2025 now before a buyer placing an order today could expect to take delivery of their new airplane.” Capitalizing on the available 100% depreciation requires buyers to take delivery of their aircraft, and conduct one business flight, before the clock strikes midnight on New Year’s Eve, according to Janine Iannarelli, Founder and President of Par Avion Ltd. So, what is a buyer to do with time running so short, especially with the scarcity of pre-owned inventory on the market right now? “Pre-owned aircraft buyers wanting to take advantage of Bonus Depreciation in 2022 should become active immediately, if they haven’t already,” Jim Donath, President of Donath Aircraft Services, says. “Even though inventory is on the rise, it remains low on an historic basis, www.AVBUYER.com
