Aircraft as an Asset Class

The private aviation market has demonstrated remarkable resilience and growth over the past decade. Pre-owned business jet values experienced unprecedented appreciation during 2020-2022, with some aircraft types gaining 30-50% in value. While markets have normalised since then, the fundamental demand drivers — wealth creation, time savings, privacy, and flexibility — continue to support a healthy market.

For the right buyer, aircraft ownership offers a unique combination of utility, tax efficiency, and potential financial return that few other asset classes can match. The key is making informed decisions about which aircraft to buy, when to buy, how to structure ownership, and how to generate revenue during your period of ownership.

Revenue Generation

Charter Revenue

Placing your aircraft on a Part 135 certificate (or EASA equivalent) allows it to generate charter revenue when you are not using it. The charter market for well-maintained, modern business jets is robust, particularly for popular types like the Gulfstream G650, Bombardier Global 6000, and Bombardier Challenger 350.

Charter revenue potential depends on several factors:

• Aircraft type: Large-cabin, long-range aircraft command the highest charter rates ($8,000-$15,000+ per flight hour). Midsize jets generate $4,000-$7,000 per hour. Light jets earn $2,500-$4,500 per hour.
• Base location: Aircraft based near major metropolitan areas or popular vacation destinations generate more charter demand.
• Availability: The more you make your aircraft available for charter, the more revenue it generates. A balance must be struck between personal use and charter availability.
• Aircraft condition: Modern avionics, fresh interior, and current paint command premium charter rates.

Realistic charter revenue can offset 30-60% of annual operating costs for a well-positioned aircraft. In some cases, aggressive charter programmes can cover the majority of operating expenses, effectively reducing the owner's net cost of aircraft ownership to a fraction of the gross operating cost.

Dry Lease Income

An alternative to charter is dry leasing — leasing your aircraft to another operator or individual without crew. Dry leases provide stable, predictable income without the operational complexity of a charter programme. Monthly lease rates for business jets range from $30,000 for light jets to $200,000+ for large-cabin aircraft.

Depreciation Benefits

Aircraft depreciation is one of the most powerful tax benefits available to business owners and investors. Under current tax law (consult your tax advisor for jurisdiction-specific details):

• 100% bonus depreciation: In many jurisdictions, the full purchase price of a new or pre-owned aircraft can be depreciated in the year of acquisition, providing an immediate and significant tax deduction
• MACRS 5-year schedule: Standard Modified Accelerated Cost Recovery System allows depreciation over 5 years on a declining balance schedule
• 7-year alternative: An alternative depreciation schedule that may be more appropriate for certain ownership structures
• Component depreciation: In some jurisdictions, engines and avionics can be depreciated on different schedules than the airframe

The tax value of depreciation depends on the owner's marginal tax rate and the ability to use the deduction against business income. For high-income business owners, the tax savings from aircraft depreciation can represent a substantial portion of the aircraft's purchase price.

Market Analysis and Timing

Like any asset, aircraft values fluctuate with market conditions. Understanding market cycles and timing your acquisition and disposition accordingly can significantly impact your investment return.

Plane Selection monitors the business aviation market continuously, tracking inventory levels, transaction volumes, pricing trends, and demand indicators across all aircraft categories. We provide clients with informed market analysis that supports better buying and selling decisions.

Key market indicators we track include:

• Inventory levels by aircraft type (percentage of fleet available for sale)
• Days on market for comparable aircraft
• Ask price vs transaction price trends
• New aircraft order books and delivery backlogs
• Fleet retirement rates and entry-into-service data
• Charter demand and pricing trends
• Fuel price trends and their impact on operating economics

Residual Value Drivers

Understanding what drives residual value helps you protect your investment throughout the ownership period:

• Maintenance status: Aircraft enrolled in comprehensive engine and airframe maintenance programmes command higher resale values. Deferred maintenance or approaching major inspections reduce value.
• Pedigree: Number of previous owners, operational history, and damage history all affect value. Private-use aircraft typically command premiums over ex-charter aircraft.
• Avionics: Current avionics (ADS-B compliance, FANS/CPDLC, modern glass cockpit) are increasingly important for resale value.
• Interior condition: A fresh, well-maintained interior adds value. A dated or worn interior requires a buyer discount.
• Paint condition: Fresh paint with a modern livery design enhances appeal and value.
• Records: Complete, well-organised maintenance records are essential. Missing records reduce value disproportionately.

Investment Structures

Aircraft can be owned through various legal structures, each with different tax, liability, and operational implications. Common structures include:

• Single-purpose LLC or limited company
• Trust ownership (various trust types)
• Partnership or joint venture
• Corporate ownership (for business use)
• Offshore ownership structures (for international operations)

The optimal structure depends on the owner's jurisdiction, tax situation, intended use, liability concerns, and privacy requirements. Plane Selection works with your legal and tax advisors to evaluate the options and recommend the most appropriate structure.

Get Started

Whether you are exploring aircraft ownership as an investment for the first time or looking to optimise the financial performance of your current aircraft, contact Plane Selection for a confidential investment analysis. We will assess your situation, model the financial scenarios, and provide actionable recommendations.