2023 Pre-Owned Aircraft Market: 4 Things to Watch

There are many factors which can drive or temper sales in the pre-owned business aircraft market, all of which invariably change from year to year. Brian Foley identifies four specific factors and weighs up how significant an impact they’re likely to have...

Brian Foley  |  07th February 2023
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    Brian Foley
    Brian Foley

    Brian Foley formed Brian Foley Associates (BRiFO) in 2006 to assist aerospace firms and investors with...

    Business Aviation trends to watch for in 2023

    Over the following paragraphs, we will look at some of the things that have already begun to change or are soon expected to – specifically, four items that many believe could have an impact on sales within the pre-owned business aircraft sales marketplace this year.

    What is the likelihood that such factors could drive the direction of sales this year? Let’s review.

    1. Bonus Depreciation

    While admittedly Bonus Depreciation is US-centric, the majority of pre-owned aircraft transact in the United States, so it potentially could have a significant impact.

    Qualified buyers have been allowed a 100% bonus depreciation deduction on their taxes since 2017. A planned phasedown lowers this deduction by 20% each year, beginning in 2023. Thus, this year’s percentage is an 80% deduction, and next year it reduces further to 60% until Bonus Depreciation is completely phased out in 2028.

    In reality 80% is still a pretty good deal. What’s more, not everyone can meet the requirements to take this deduction, and many of those who do have already purchased an aircraft.

    Thus, the modest change in US tax law is not expected to meaningfully deter sales. Any buyer citing this as a reason not to buy was likely never serious to begin with.

    2. Pre-Buy Inspections

    Sellers are losing their strong upper hand, bringing a better balance of negotiating leverage between parties. The days of sellers discouraging a pre-purchase inspection (or naive first-time buyers skipping it all together) are rapidly winding down.

    Along those lines, the wait at the MRO facility to conduct the inspection should start getting shorter. If one could even find a slot, pre-purchase inspections could take upwards of weeks to schedule as maintenance facilities became oversubscribed when pre-owned transactions set records, and overall business jet utilization increased.

    With hangars full of work-in-process, some maintenance providers resorted to working on aircraft parked outside in the elements, with mobile tools in tow.

    3. The Paperchase

    The paperwork logjam witnessed over the past couple of years related to getting an aircraft bought, sold, and registered will finally get some relief in 2023.

    Given the anticipated reduction in the numbers of pre-owned transactions, coupled with organizations finally increasing their staff, the traditional nail biting to close transactions promptly - particularly by year-end – should subside a bit.

    While the bureaucracy will remain a constant, there will be more bandwidth to keep deals on track, and to conclude within a more reasonable timeframe.

    4. Yin and Yang Market Makers

    There will be two opposite but interconnected forces acting on the market this year. To find out what these are, and to read the other key market indicators leading into February,  click the button below to view AvBuyer's February digital edition…

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    Brian Foley

    Brian Foley

    Editor, Market Intelligence

    Brian Foley formed Brian Foley Associates (BRiFO) in 2006 to assist aerospace firms and investors with strategic research. In addition to his work as Market Intelligence Editor, AvBuyer, he is a regular contributor for Forbes.com and his views are published in the media worldwide.

    Currently, Brian serves the Transportation Research Board as a member of the Business Aviation, helicopter, commercial airline and UAV system subcommittees, and he previously served on the Wall Street financial firm Board.

    Before starting his consultancy business, Brian was marketing director at Dassault Falcon Jet for 20 years, and started his career at Boeing. He is an instrument-rated private pilot.



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