Throughout 2024, we’ve witnessed a significant rise in pre-owned aircraft inventory and a reduction in sale prices compared to the peak levels during the COVID-19 pandemic. While there have been numerous acquisitions, absorption rates have increased in most markets, leaving buyers questioning whether they should make a purchase now or wait.

One of the primary reasons for hesitation has been the uncertainty surrounding the 2024 presidential election and its potential impact on the markets. Additionally, the incentive of bonus depreciation was set to expire from the already reduced 60% currently in place this year. I’ve often advised clients and investors without an immediate need to hold off, anticipating that markets might depreciate significantly in Q1 of 2025, potentially presenting better deals.

However, with post-election clarity, it’s evident that buyers need to act now. At Jecobra Aviation, we’ve received more acquisition inquiries in the few days following the election than we have since the onset of COVID-19. A substantial number of aircraft have gone under contract, and the current enthusiasm is reminiscent of the fourth-quarter surge during the COVID-19 bonus depreciation run.

I predict that a significant portion of current inventories will sell before year’s end, leading to a surge in prices. There are plenty of excellent options in almost every market, with prices still 10% to 30% below COVID-19 highs. Delaying action will result in fewer options and higher acquisition costs.

The newly elected administration has been a long-time proponent of 100% bonus depreciation. Reports from Washington indicate that not only are we likely to see its return, but there’s a good chance it will be retroactive for 2024 purchases. If this happens, deferring your tax liability for a business aircraft—designed to enhance your productivity—makes perfect sense.

The bull market, coupled with the likelihood of bonus depreciation, administrative certainty, and regulatory clarity, all point toward an already developing seller’s market. The window of opportunity is small. I highly advise acting now to take advantage of the current buyer’s market and to ensure you can negotiate and complete your transaction in time to place the aircraft into service before year’s end, capitalizing on tax incentives and low acquisition costs.

Buying Quickly Without Compromising Due Diligence

But how can you successfully buy quickly and with confidence, ensuring a thorough pre-purchase inspection without compromising due diligence to place the aircraft into service by the end of 2024?

The answer is complex yet straightforward—with the right professionals who understand the structure and can identify the specific aircraft perfect for your mission and budget.

Newer aircraft that are fully programmed present far less post-purchase liability than older legacy aircraft without programs and impending large inspections. Several aircraft currently available are coming out of major inspections before year’s end, allowing you to accept them with a pre-purchase inspection adequate for that specific aircraft. Aircraft only a few years old, with full programs and excellent logbooks, usually require only minimal pre-purchase inspections, which can still be accomplished in time.

However, the majority of available inventory should undergo a thorough pre-purchase inspection to ensure you’re buying a safe, accurately represented aircraft that won’t incur huge post-sale maintenance costs. For example, we acquired a 2009 Falcon 7X. From start to finish, the Level III pre-purchase inspection at Dassault took 96 days. Such a transaction wouldn’t work for a buyer needing to take advantage of 2024 tax incentives and place the aircraft into service before year’s end. Or would it?

A Strategic Approach to Expedite the Purchase

Yes, it can work. Here’s how:

• Swift Negotiation and Agreement: We negotiate the price and secure a Letter of Intent (LOI), which can happen in as little as a day.
• Initial Due Diligence: One of our Directors of Maintenance reviews the status reports and due lists, and we conduct a demo flight of the airplane.
• Customized Pre-Purchase Plan: Based on our initial due diligence, we determine the appropriate pre-purchase inspection and incorporate it into the Aircraft Purchase Agreement as a “post-delivery commitment.” We establish the right amount of “Escrow Holdback” to ensure funds are held in escrow towards the post-delivery inspection.
• Light Pre-Buy Inspection: We perform a light pre-buy inspection, which includes a records review, engine borescopes, inspection of easily accessible areas for corrosion or damage affecting the aircraft’s “delivery condition,” and a thorough test flight—usually to the delivery location.
• Immediate Purchase and Placement into Service: We promptly purchase and place the aircraft into service. This entire process can happen in as little as a week with the right team and resources.

These variables change depending on the aircraft, but we’ve streamlined the purchase process to allow for an extensive pre-buy post-sale sometime in 2025.

Maximizing Maintenance Opportunities

Most Maintenance, Repair, and Overhaul (MRO) facilities are booked through the end of the year due to the higher percentage of new aircraft deliveries occurring in the fourth quarter, causing their calendar inspections to come due simultaneously. This, coupled with the large number of pre-purchase inspections in Q4, often makes it unlikely to secure the inspection you want at a facility specializing in that make and model.

With our structured approach, you can negotiate with the best maintenance facility to conduct a thorough pre-purchase inspection in Q1 2025 when they have the bandwidth to accept the aircraft.

Choosing the Right Partner

Selecting a broker who has facilitated several post-delivery transactions, backed by a team of experts who can close deals quickly and efficiently, is key to making a last-minute fourth-quarter acquisition. However, the clock is ticking. Your New Year’s resolution should incorporate all that you will achieve with your new aircraft—not just the desire to acquire one.

Ready to Take Flight? Contact Jecobra Aviation Today

Don’t miss out on this limited window of opportunity. Our team at Jecobra Aviation is ready to guide you through a swift and confident aircraft acquisition, ensuring you capitalize on market conditions and tax incentives.