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Private Jet Insider

Welcome to the tenth edition of Private Jet Insider.

I was so glad to see private jet fliers Jeff Bezos, Elon Musk, and Mark Zuckerberg (all Gulfstream owners) at the inauguration events. There was over $250m worth of metal represented in that one screen grab. Now that the administration has turned over, I think there are some ramifications for private aviation with the now-in-place administration. This is not a political newsletter, but these are simply my observations of what it might mean for private aviation. (Hint: a big one is bonus depreciation.)

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How do you make private jet profits? By watching your costs! Ramp helped Candid save $250,000 by finding duplicate SaaS spending and more. That $250,000 would equal 29.4 hours on a Citation XLS on some jet cards. Flying private becomes much more achievable when you focus on savings in other parts of your business.

I've partnered with Ramp to offer you a free one-on-one expense management consultation to see how Ramp can save you money, so you have more to spend on private aviation. As a private jet flier, your business has unique needs. It's time to add the line item "private aviation" to your expense budget. Sign up for the free consultation by going to ramp.com/preston or reply to this email and I'll connect you directly with the right folks.

A touch of housekeeping...

I want to use this space to talk about an amazing charity with private aviation. Angel Flight West is the beneficiary of a hangar party at the Scottsdale Airport on March 22nd, 2025. It'll be an awesome party for an even better cause, and if you're going we can meet there!

A friend of mine who's sister was on hospice care with terminal cancer was recently flown by Angel Flight West so that she could be more comfortable at home. That's the cool thing about private aviation. She would have never been able to fly commercial because of being immunocompromised.

Tickets are $200 to the event and you can purchase them here.

What a Trump presidency might mean for private aviation

If you remember in 2024, the Biden administration's budget proposal mentioned Private Aviation "loopholes" six times in 2500 words, indicating a position on private aviation. There's changes coming. Some good, and some may be accidentally bad.

Trump Force 1, an incredibly subtle 1991 Boeing 757 that was (ironically) operated by a Mexican airline at one point. He sold his 1997 Citation X in May of 2024. Needless to say, The Don would probably school us all on private aviation.

One would assume his policies might favor the industry. After all, most of the people photographed at his inauguration fly G550's, G650's, G700's, and Global 6500's (all known aircraft of attendees). But private aviation isn't just a Republican or a Democrat thing. Donors to both sides use private aviation.

Here's some obvious (and maybe not-so-obvious) implications for private aviation under the new administration. Spoiler: they're not all good.

100% Bonus Depreciation (good!)

The day after the election, my phone was ringing constantly with clients asking if I thought 100% bonus depreciation was coming back. I have a feeling (and this is only my opinion) that we will get 100% bonus depreciation back. I mean, democrats already passed this law through the House but got killed by the Senate.

The question becomes: will it be in 2025 or 2026?

What Bonus Might Mean for Aircraft Values

We have been seen a "return to normalcy" in secondary markets, which is a positive spin-ny way to say that prices are coming down. The consensus is that, like most other asset classes, fall of 2022 was peak valuations.

I had a friend pull some data for me, and according to Jetnet, the number of aircraft for-sale have steadily increased since January 2023. (Ignore the decrease for sale at the end of each year, its the busiest time of year for aircraft transactions).

Without double-clicking into any given market, looking only macro, supply-and-demand will tell you that prices come down when inventory goes up. You're smart. You know this.

The argument for decreasing suplly is that 100% Bonus Depreciation creates an easy jump to step-up in cost basis. That, and more people (whether its true or not) try to justify the purchase with the bonus depreciation.

What Bonus Might Mean for Transaction Volume

My personal take is that transaction volume is where Bonus Depreciation will have more effect. As you look at the period of 2020 through 2023, there were three compounding events happening:

1. Interest rates were rising quickly
2. Valuations skyrocketed across airplanes 1 year old to 40 years old
3. Bonus Depreciation decreased from 100% in 2022 to 80% in 2023 and 60% in 2024

I believe there to be a group of aircraft owners or people that would fit that profile that decided to sit on the sidelines. This is anecdotal, but I have had enough conversations with would-be buyers that had this attitude that I don't think they're alone.

If we get the trifecta of those three in reverse: a soft landing on interest rates, values coming back to earth, and 100% bonus depreciation being reinstated, these people might come off the sideline

This chart would indicate that there are definitely some on the sideline. 2024 was slow relative to 2023.

What Bonus Might Mean for Fractional Ownership

One of the biggest advantages to Fractional Ownership over ad-hoc charter is the depreciation element. The tax reduction when amortized over the cost-per-hour can reduce total cost of ownership.

It may be more of a justification tool than a reality. You can still depreciate a fractional share over a normal schedule, but its the optics of being able to offset some of the up-front cash with a tax savings.

What Bonus Might Mean for Charter

I think that it will have the lowest effect on charter. The charter market is fickle, and planes come-and-go when owners don't find the value in putting more hours on their aircraft by chartering. When the supply decreases, prices increase. Then more supply comes.

Free markets are beautifully efficient in this way. (I bet Adam Smith would have flown private).

Deregulation (So/so)

Trump said that he wanted to privatize Air Traffic Control. While I agree that the FAA is not the world's most efficient organization, the safety record generally speaking in the United States is very good. There's been a shortage in Air Traffic Controllers, but the FAA hit their hiring goals in 2024.

I think generally, certain levels of deregulation will be net positive for private aviation. I am not going to get into all of the minutia around where he should or shouldn't deregulate, but there's a few high-impact areas that are currently being choked by regulatory sludge.

Maintenance and Repair

There has been a lack of innovation in the maintenance and repair space, mostly driven by too much regulatory oversight and making it too challenging for companies to truly innovate. The increased use of 3d printed parts and reducing the regulatory capture of some of the pseudo-government companies will be net positive.

For instance, PMA (Parts Manufacturer Approval) parts are aftermarket parts for jets. This is held in a bit of a chokehold via the FAA and the major manufacturers. I'm not suggesting that we accelerate the process and bypass safety whatsoever, but deregulation can also look like additional funding to stimulate some business activity.

Certification Process

To get a new aircraft or even a part or an engine to market is incredibly painful (just ask Gulfstream about the G700 certification). The bureaucratic mess to get things certified almost comical. We need more efficient systems and processes to make innovations be commercially viable.

I would look at the certification process very closely and figure out how we can use advanced technology to speed up the process. I would bet very few people in the certification department use ChatGPT.

Tariffs (Bad!)

President Trump has a certain style about him. Again, not a political post and I don't care which way you voted. One thing that can happen with big sweeping changes he can accidentally punch a baby (in case you don't get that reference, watch this).

Canada: Way more Private Aviation than you think

Canada is a (surprising to some) vital country in the supply chain for private aviation. Here's a non-exhaustive list of business aircraft that have Canadian (Pratt and Whitney) engines:

• Gulfstream G500, G600
• Dassault Falcon 6x and 2000
• Cessna Citation X, Sovereign, Latitude, Longitude
• Embraer Phenom 100 and 300
• Beechcraft King Airs
• Pilatus PC-12
• All TBMs

A 25% tariff on Canadian imported goods could make the cost of these aircraft completely uncompetitive on price. Textron (parent of Cessna and Beechcraft) and Gulfstream are both US based companies.

Oh yeah, and Bombardier is a Canadian company.

Does that mean all Challenger 3500's and Global 7500's are going to get a 25% tariff premium?

I guess that's what tariffs are designed to do, but I wouldn't say thats a net good thing for the industry.

Mexico Too

Not so fast! There is exposure for GE with some fan blades being made in Mexico. Safran, who manufacturers a ton of stuff, has manufacturing in Mexico as well.

Tariffs on those parts could drive up the cost of engine overhauls or a variety of other things for both used and new private jets. Also not great.

That means charter rates go up, fractional rates go up, everything goes up. This might be accidentally inflationary for a very small part of the world, those that can afford to fly private jets.

My Take: is a Trump admin good or bad for private aviation?

I think overall, the Trump administration will be positive for private aviation. Yes, there is going to be times where he punches a baby and I don't think privatizing ATC is a good idea at all. But overall, a positive business environment is good. When companies make Private Jet Profits (I should trademark that), their owners (people just like you!) start flying private. The general sentiment I will say is cautiously optimistic.

I know I've seen much more activity in January than I was expecting. I have 2 closings next week, which is usually reserved for vacationing!

Until next week,

Preston Holland

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P.s. forward this to your friend who is thinking about buying a plane if Bonus Depreciation comes back. Then remind them that this is not tax advice, but planes are cool.

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Bonus Section: Cool Stuff Subscribers Send Me

I've decided to make a new section. From time to time, subscribers of my newsletter will send me their products for sampling. I won't shout it out if the product sucks, but if its good I'll shout it out.

Today the product is @grooveitbrush. I am a divot golfer (I'm like a low teens handicap which is dangerous) but that means that my irons are constantly needing brushing. It's a low of 17 degrees at my house, so I'm not golfing much this month, but I used it to do deep clean of my wedges and irons and I was impressed. The mini is awesome to hang on the side of the bag, and the wet brush is great to keep around too.

Other than the free brushes, they didn't pay me for the endorsement, but I love shouting out cool people and good brands. You can shop on their site here.

And if you have a cool product and you want me to try it out, reply to this email.