The aircraft market is currently experiencing a notable increase in online inventory, reflecting a shift in buyer behavior. Data from Global Jet Capital indicates that aircraft listings rose by 9.3% in the first quarter of 2024, with older aircraft listings increasing by 11.4% and younger aircraft by 4.3%.
This surge in available aircraft is accompanied by a more cautious buying environment. Many potential buyers are adopting a wait-and-see approach, influenced by the upcoming election and its potential impact on economic policies. This hesitation is contributing to a subtle downward pressure on aircraft prices, as sellers adjust to the current market dynamics.
Adding to the complexity is the scheduled phase-out of bonus depreciation benefits. Under current tax law, the bonus depreciation rate decreases to 60% in 2024, 40% in 2025, and 20% in 2026, before being eliminated in 2027.
Bank of Tampa Blog This reduction is prompting buyers to weigh the advantages of purchasing now to maximize tax benefits against the uncertainties of an election year.
While these factors may create a sense of conflict for buyers, it’s important to recognize that market fluctuations are a natural part of the economic cycle. The current downward pressure on prices presents an opportunity for buyers to acquire aircraft at more favorable terms. Additionally, taking advantage of the remaining bonus depreciation benefits can result in significant tax savings.
In times of uncertainty, making informed decisions based on current market conditions and long-term goals is crucial. Engaging with financial advisors and aviation experts can provide valuable insights tailored to individual circumstances. By approaching the market with a strategic mindset, buyers can navigate the current landscape effectively and position themselves for future success.
Remember, market conditions are ever-changing, and opportunities often arise amidst uncertainty. By staying informed and proactive, buyers can make decisions that align with their objectives and take advantage of the current market dynamics.