Is Now the Best Time to Buy a Private Jet?

As was the case for many others in the aircraft brokerage industry, 2023 proved not to be as strong for Frisco, Texas-based Mente Group as the record-breaking 2021-2022 timeframe. But it was still a solid year for aircraft sales, according to company CEO and President Brian Proctor. 

Looking back, Proctor reckons the first half of last year was impacted by the banking crisis at Silicon Valley Bank (among other lenders) which he says caused several clients to delay their transactions.

“Ultimately, those delayed transactions landed in Q4 of 2023 and have flowed over into Q1 2024,” Proctor says. “So, while 2023 wasn’t what we had planned for, 2024 is starting off extremely strong – we’re seeing significant interest now from clients who are coming back into the markets to acquire aircraft.”

According to Steve Main, Mente’s Vice President of Transactions Planning & Transactions, the company was expecting January 2024 to bring a traditional slowdown in activity.

“Pre-Covid it was typical for everyone to take a deep breath following a frantic Q4 of trying to get deals over the line before year-end, closing out the previous year and stopping for the holidays. Most within the brokerage community were expecting a break in activity coming into 2024, but our January has been just as busy as our December.”

Main reveals that Mente sees no sign of any slowing from buyers or sellers. “And it’s not just us,” he adds. “Other brokers we regularly speak with are saying they’re experiencing similar activity.”

Serving North and South America, Europe, the Middle East, Africa and Asia, Mente has a firm handle on the different pre-owned business jet segments around the world, from Light all the way up to Ultra-Long Range.

According to Main the early 2024 demand is unevenly spread across the different sectors. “It’s with the Light and Mid-Size Jets where we’re seeing the most activity,” he explains.

“The Large and Ultra-Long-Range Jet markets are slower than what we would like to see, especially since Mente typically ‘lives’ in the Super Mid-Size through Ultra-Long-Range Jet markets.

“With that said, we are still receiving a significant number of inquiries on our Large Cabin Jet listings from brokers and buyers, and it does seem there are still many buyers waiting on the sidelines for the best time to buy,” he adds.

In Proctor’s opinion, their wait should be coming to an end, and he believes now could be the best time in over three years to buy. Main agrees, warning those who are too cautious that other factors could potentially affect the market later in 2024.

“We are telling buyers that now may be the best time to buy.”

What Could Impact Private Jet Buying Decisions in 2024?

With that said, there has been plenty of talk about the return of 100% bonus depreciation in the US, with the House of Representatives having just voted in favor at the time of writing.

With the previous 2017 Tax Cuts & Jobs Act diminishing by 20% annually since 2023, as of January 1, 2024, aircraft buyers can deduct up to 60% of the cost of their acquisition. 

The feeling among the brokerage community has been that 60% bonus depreciation is still an attractive incentive, and buyers’ appetites wouldn’t be significantly diminished by the step-down from 80% in 2023.

Proctor appears to play down the impact a return to 100% bonus depreciation might have, believing it to be one of several things that could influence a buyer’s decision in 2024. “There are a lot of factors to think about this year — global and domestic political instability, a US election year, interest rates and, yes, bonus depreciation.”

Nevertheless, “While we may not see a return to 2021 levels of market activity, if 2024 proves to be a ‘successful’ year, we must consider 100% bonus depreciation as a contributing factor,” he says.

A Great Time to Buy Jets, But be Prepared!

Despite the fact Proctor, Main and others within the wider business aircraft brokerage community reckon 2024 is the best time to buy in a while, there are still challenges both buyers and sellers of business aircraft will need to be aware of should they choose to jump into the market.

“Supply chain is still an issue, and the supply of pre-buy inspection slots has been – and continues to be – a major issue in the overall timeline of a transaction,” Main highlights.

“Securing pre-buy slots or inspection slots with MRO shops is becoming something of an artform, where relationships with the big MROs matter and even the smaller, typically less-busy MROs are filling to capacity months in advance.”

The best advice? Source an aircraft broker specialized in the aircraft you are looking to sell or buy, and who has honed the art of working with MRO shops through experience and long-standing relationships, helping provide a smooth path to closing your aircraft transaction.

More information from: www.mentegroup.com