Private jets are ‘flying off the shelves’
US billionaires are taking advantage of tax breaks to purchase the ultimate status symbol – their own private plane
A recent Vanity Fair piece called private jets “the singular fetish object of the modern billionaire”. Photograph: iStock
Despite the hefty costs of running a private jet, 2019 was a banner year for private planes in the US. Sales of business jets were up 15 per cent at the end of the third quarter over the same period last year, says the General Aviation Manufacturers Association, the aircraft makers’ trade group.
Experts in private aviation say sales of both new and used airplanes were up, driven by an economy that is thriving for the super rich and a huge tax break in 2017 – not to mention the status conveyed by owning a private jet.
A recent Vanity Fair piece called private jets “the singular fetish object of the modern billionaire”. There were even end-of-year deals on “white tail” jets, which makers build without a buyer’s order. However, aviation experts say buyers needed to budget for not just the purchase price but many millions more each year to fly and maintain the plane.
“People are taking advantage of year-end acquisitions of white tails. We’re taking delivery of several in the last five days of the year.”
Deciding whether to buy your own jet requires extensive calculations based on the hours and distance you want to fly as well as the operating costs, which are substantial.
The annual operating budget starts at just under $1 million (€897,440) for lighter jets like Embraer’s Phenom 300 and rises to $4 million (€3.6 million) or more for jets like the Gulfstream G650 and Bombardier Global 6500 that offer the most flight range, speed and amenities. Aside from the wow factor, the biggest motivator to buy a jet in the last year has been a tax break in the 2017 overhaul.
The break is intended primarily for business expenses, so a private jet owner must use the plane at least 50 per cent of the time for business purposes to deduct the entire purchase price of the plane in the first year. This deduction also applies to used aircraft.
“The fact that Trump let you take 100 per cent depreciation year one, you’re in a $5 million plane for $2.5 million,” says Bill Papariella, chief executive of Jet Edge, a jet charter and management company. “They’re flying off the shelves.” When the plane is eventually sold, the owner needs to pay income tax on the sale price. – NYT