The Plane Truth, Zero-B.S. Insights for Business Aviation

When it comes to aircraft transactions, 2024 has been slower overall. Per last month’s article, I wasn’t sure if we’d see the usual year-end madness. Fast forward, and our title activity has clearly picked up—more than I expected.

We often discuss how election years cause a dip in activity, but that isn’t always true. According to this Corporate Jet Investor article, “During the past eight presidential elections, the total number of transactions (for both pre-owned and new deliveries) have only declined twice.” 

Aircraft transactions don’t disappear—they just delay. With only six weeks left in the year, here are some helpful tips from an Escrow Agent to make year-end closings smoother.

Preparing for Year-End Aircraft Transactions

If you’re a broker or dealer with listings, work with your preferred title company now to order title work. Deals move quickly this time of year, and buyers or sellers often want to close unexpectedly fast. Ordering title work early ensures you address any potential issues before closing.

For clients financing their aircraft, complete International Registry enrollments early. The year-end activity surge means processing these applications can take longer. Some proactive clients enroll on the International Registry well before finding an aircraft. While it may seem minor, having this step done provides peace of mind once a deal progresses.

Once a plane is under contract, your Escrow Agent will prioritize based on the closing date you provide. We aim to stay proactive, but year-end timelines make this challenging. If you open a transaction without confirming a closing date, we likely won’t prioritize your deal until the date is set. Providing a clear closing date helps us ensure everything aligns.

For teams with Closing Coordinators or Transaction Managers, salespeople need to keep them updated. These coordinators are the communication link to your Escrow Agent. If they lack information, they can’t keep us informed, which slows the process.

I love the year-end rush, but it presents challenges. Unexpected deals will surface, and existing deal details may shift by the hour. Buyers or sellers can back out, and financing may fall through.

There are many factors we cannot control. However, we must focus on controlling what we can. With that mindset, I’m excited about the activity increase and hope everyone ends the year strong.

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The Presidential election results are in. Now we can predict how a second Trump term will impact aircraft taxes.

Looking back at 2024, the general environment has been anti-aircraft owner. For example, earlier this year, the President released a statement to “crack down” on corporate jet loopholes and eliminate tax breaks for corporate jet users. This followed the IRS announcement of their plan to conduct focused audits on business aircraft use. A group of senators (all still in office) also wrote a letter pressuring the Treasury to reevaluate the Standard Industry Fare Level (SIFL) rates, calling them “outlandish.” Biden and Harris’s tax plans included a provision to extend the depreciable life of aircraft to 7 and 12 years.

Since February, the IRS has increased its level of audits on aircraft taxes. The SIFL issue is still out there, but the argument that the lower rate provides tax loopholes is misunderstood.  It remains to be seen whether this matter will gain any traction.

In the near term, the key question people are eagerly awaiting is whether 100% bonus depreciation will return. Trump has presented several tax policy ideas. Yet there are a few things consistent across the board with 100% bonus depreciation being one of them. There’s also talk that the change may even be made retroactively, meaning 2024 purchases would qualify.

If I had to use my crystal ball, I think it’s likely that 100% bonus depreciation will return in the near future. As for other changes to aircraft taxes, I expect we’ll see a major tax package come through in 2025, but the contents are yet unknown. 

My wish list this Christmas? Allowing the excess business loss limitations to expire and bringing back like-kind exchanges. Both are unlikely, but a girl can dream.

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How can aviation business owners navigate shifting economic conditions and thrive in the face of uncertainty? Adapting to change requires agility, foresight and a solid understanding of market dynamics.

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Take the presidential election, for example. Every four years, the aviation industry experiences some delays in major purchase decisions. Companies and individuals hold off as they brace for potential policy shifts and economic uncertainty. This "election stall" effect arises from concerns about new leadership and the impact of their policies, which could alter tax structures, interest rates and other economic factors.

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As a result, such fluctuations affect disposable income and influence perceptions, shaping both business aviation demand and travel habits. Compounding the uncertainty, leadership actions don’t always align with their public promises, leading to misaligned expectations. These dynamics put pressure on the aviation industry, which is particularly sensitive to economic cycles.

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To thrive amid constant change, aviation business owners must stay nimble. And they must be ready to adapt to shifting economic realities and evolving customer demands. However, amidst all these adjustments, having a guiding principle becomes essential to maintain focus and direction.

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When it comes to building a lasting strategy, Jeff Bezos offers a compelling perspective that highlights the importance of focusing on stability:

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"I very frequently get the question: 'What's going to change in the next 10 years?' And that is a very interesting question; it's a very common one. I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two—because you can build a business strategy around the things that are stable in time..."

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This shift in perspective—from predicting change to identifying what remains constant—provides a powerful framework for long-term planning. By grounding their strategies in enduring fundamentals, aviation businesses can create models that withstand external fluctuations and deliver consistent value.

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In aviation, certain customer expectations, such as safety, reliability and efficient service, serve as strategic anchors. And these anchors remain constant regardless of political or economic shifts. By focusing on these core priorities, aviation firms can confidently invest in systems and practices that deliver long-term value.

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This clarity helps entrepreneurs navigate uncertainty while staying grounded in customer-centric priorities. In a world of constant change, focusing on what endures allows aviation business owners not only to survive but to thrive.

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Each year, we see the highest volume of aircraft insurance transactions during the fourth quarter compared to any other time throughout the year. This is especially true as buyers rush to finalize transactions before December 31st.

Some buyers are motivated by tax planning strategies, while others make purchase decisions based on factors like election outcomes—yes, that really happens!

Regardless of the reason, the timing places added pressure on buyers to finalize both acquisitions and the necessary insurance policy and other ancillary services required (e.g., escrow, legal, finance and tax).

However, rushing through the process of obtaining aviation insurance coverage can lead to challenges. Binding a policy last-minute isn’t ideal, especially when it’s treated as just another item to check off an acquisition checklist.

Avoid Last-Minute Scrambling

Just as banks prefer at least 30 days' notice for processing financing, aircraft insurance brokers benefit from that same level of lead time to secure optimal coverage and pricing.

While it is possible to secure an insurance quote in under a week, rushing the process often leads to suboptimal results. This applies to both insurance policies and loan documentation. A hurried approach can leave both buyers and insurance brokers with fewer options, potentially resulting in higher premiums or less comprehensive coverage.

We generally recommend allowing at least two weeks from the time of initial contact with your insurance broker to the point of quoting and binding coverage. This window allows your broker to gather essential details, such as pilot information and applications, while fully understanding your risk profile.

The process of shopping for aircraft insurance is not instantaneous. In today’s market, it can take three to five business days for underwriters to respond with their interest in quoting a specific policy. During this time, your broker evaluates multiple offers, comparing coverage, limits and premiums to recommend the most favorable option.

Shortening this timeline may compromise your insurance coverage, as rushing the process leaves little room to explore the best market options. If some underwriters have not yet provided formal replies, there’s a risk that a more suitable policy could be overlooked simply because it wasn’t sent to the insurance broker in the shortened period of time.

The takeaway is clear: Yes, it’s possible to bind aviation insurance quickly when the purchase happens at the last minute. But that approach comes with trade-offs. By waiting too long to contact your insurance broker, you limit their ability to explore the full range of market options and secure the best policy for your needs.

Planning ahead isn’t just about convenience—it’s about ensuring your aircraft purchase is protected by the right coverage at the right price. So, if you’re considering buying an aircraft, don’t wait until the final days to get in touch with your broker. A little foresight goes a long way in setting you up for success.

It’s clear the year-end push is upon us. If you’re considering financing an airplane acquisition by December 31st, I recommend starting the process—soon. 

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While every financial institution has a different process and timeline, it doesn’t hurt to engage early to ensure funding by year-end. 

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Remember, financing is a team effort between bank and borrower. Approach the application process with a collaborative mindset for the best outcome. 

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What the Fed: A Look at Market Conditions

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On November 7, the U.S. Federal Reserve lowered its target rate by 0.25%. However, it  doesn't mean that longer-term rates (e.g., aircraft finance rates) will drop. As of November 8, the 10-year treasury sits at 4.32%. That’s 0.11% higher than what was quoted in my article on October 21.

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Going forward, I’ll continue to reference the 10-year treasury monthly as an indication of general rate trends. That said, aircraft finance rates don’t exactly match the 10-year treasury. It’s merely a benchmark to gauge rate movements on loans across the board. 

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With the continued rise in the 10-year treasury, the phrase “higher for longer” is a topic of conversation. While it’s too early to predict 2025 trends, the current rates seen today on longer-term loans may persist. This will be something to keep an eye on as you finish out the year and plan for 2025. 

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Many buyers are so excited to start flying their new dream machine that they’ll often fly right past some key aspects of the critical aircraft inspection process. 

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Two key requirements exist during a pre-buy process.

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The first key is determining who will perform the pre-buy inspection. Sellers typically prefer their local shop, often the same team who maintained the plane during their ownership. 

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The challenge? What are the chances that the inspection facility will genuinely critique its own work? The more squawks they find, the more the seller might blame them for past oversights. 

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Instead, it’s wise to have a fresh set of eyes inspect the aircraft. Ideally, this would be the facility the buyer plans to use for future maintenance. 

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This gives the new facility an opportunity to familiarize itself with the plane, review logs and honestly assess the aircraft’s condition. They’ll also be motivated to perform a thorough inspection, avoiding blame down the road if something fails soon after. They’ll also have an incentive to find issues they can fix – and charge for.

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Secondly, often overlooked, the purchase agreement should specify the “delivery condition,” outlining the standard for repairs. To avoid disputes and keep things positive, it’s best to agree on “delivery conditions” in advance, even if it requires extra negotiation. Consider these scenarios:

• Should all systems be functional, or just the flight-related systems? 
• What if the air conditioning or lavatory isn’t working? 
• Should the aircraft be current with a Part 91 annual inspection or follow all manufacturer-recommended hourly and calendar inspections?
• What if the buyer and seller disagree on necessary repairs? 

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Why shouldn’t a buyer let the fox guard the hen house? Because they need certainty about the plane’s true condition and agreed-upon results. Hiring an independent aircraft inspection facility provides this assurance, so they can confidently fly their dream machine upon closing.

As we approach the end of the year, we continue to receive a lot of questions on aircraft bonus depreciation. With the current law, many aircraft will qualify for up to 60% bonus depreciation in 2023, and some will even qualify for 80%. As with most tax law, there are conditions that must be met, and the intricacies cannot be overlooked. To avoid unexpected surprises at tax time, it is important to address the rules before you close.

To qualify for bonus depreciation, the aircraft must be predominantly used in Qualified Business Use (“QBU”). Aircraft that will be predominantly for personal use often will not qualify. QBU has a stricter definition than business use. It has special carve-outs for related party leases and use by “greater than five percent” owners. The ownership and operating structure must be carefully analyzed to determine if the requirements can be met.

The usage of the aircraft is the primary driver for eligibility, and is based on your tax year. Each year, the aircraft usage must be carefully monitored and analyzed to ensure that the QBU requirements are met. If the QBU requirements are not met in a later year, you may have to “give back” the bonus depreciation. That means taking a lesser depreciation deduction, referred to as recapture.

Keep in mind that any deductions, including depreciation, will be limited by personal use of the aircraft. This includes not only personal flights, but also personal guests onboard business flights. We recommend careful planning of your flight itineraries through year end to ensure that the deduction is maximized, especially in the year of purchase.

Bonus depreciation is scheduled to reduce by 20% each year, so 40% in 2025, 20% in 2026, and down to 0% in 2027. However, with the election coming up, and a long-time pending bill to bring back 100% bonus sitting with the senate, the rules could change in the future. If you are looking to purchase an aircraft and bonus depreciation is an incentive, be sure to address the requirements prior to purchase to make sure your tax planning goals are met.

About the Author

Angel Houck is a CPA and the co-founder of Houck & Christensen CPAs, LLC, a firm that focuses exclusively on business aviation. Angel advises many tax matters that impact aircraft owners and operators, including federal income tax, state and local taxes, federal excise tax, US source income, and audit support. Angel is on the NBAA Tax Committee, Treasurer of the Central Florida Business Aviation Association and a member of IADA.

How will the aircraft escrow market end up in 2024? Let’s look to the past for clues as to what year-end may look like.

From 2020-2023, the volume of escrow closings was extremely high. So much so that it seemed like I didn’t even have the time for those brief moments of reflection. We were busy along with the rest of the industry. I knew the end of those years was going to be active. After all, Q4 is when most brokers experience their highest sales.

But fast forward to 2024, and so far, the year has been a bit of a mixed bag.

As you likely know, our business relies on repeat clients, most of whom are brokers, dealers, attorneys, and individual buyers/sellers. Of this group, there are clients who were just as active as any other year. But there are many that I’ve not heard from as much.

Based on conversations with aircraft brokers, I think there’s been a conscious decision to take a step back and catch their breath. For others, I think they’re doing what they can, but the activity hasn’t been as high this year.

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Case in point: We’re seeing deals that were meant to be financed, and then at some point, the financing fell apart and the deal canceled. The lower deal flow indicates that we’re still facing supply chain issues. Plus, we continue to hear comments such as, “We’re still waiting on a part” or “We’re still unsure of the return to service (RTS) date.”

For every straightforward closing, there seem to be 2-3 clients with a last-second issue (e.g., a holdback or addendum). Unfortunately, everything this year has just seemed harder than it needs to be. Without a doubt, I’d say 2024 has been the most challenging year to get aircraft escrow deals across the finish line. I’ve tried to make sense of it, but everyone I talk to has a hard time identifying the “why” as well.

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My crystal ball for the year end is foggy. As I mentioned above, 2024 is turning out to be a mixed bag. Some dealmakers will continue to thrive, and some will continue to be slow.

What we’ve learned from the business surge of 2020-2023 is that this level of growth isn’t sustainable. This year may just be a healthy correction, setting the stage for a brighter future.

Here at Aero-Space Reports, I’m grateful to report that our year has been strong, and we’re on pace for another year of growth. When it comes to the future, I’ll always choose optimism and look forward to ending on a high note.

About the Author:

Jeff Snowden is the President of Aero-Space Reports, Inc., an industry-leading aircraft escrow and title company based in Oklahoma City, Oklahoma. On a day-to-day basis, his primary function is to act as an Escrow Agent for trusted brokers, attorneys, financing companies, and individual buyers/sellers. He prides himself on his ability to ebb and flow with each transaction based on the deal particulars, the parties involved, and the circumstances surrounding the closing. Jeff is a member of International Aircraft Dealers Association (IADA), National Aircraft Finance Association (NAFA), National Business Aviation Association (NBAA), and Aircraft Owners and Pilots Association (AOPA).

With decreasing federal interest rates in the news, I’m hearing a common question right now: “Where are rates going?” And how will they affect aircraft loans?

I could quote various economists, or even recap what the Federal Reserve Board members are thinking. However, the reality is that no one knows for certain where things go from here. From a lending perspective, the best way to examine market conditions is through tangible actual and historical data over forecasts.

As you may be aware, the phrase “the Fed cut rates” does not mean that rates across the board (e.g., car loans, aircraft loans, or mortgages) will drop the same amount the Fed’s rate cut suggested. In fact, a Fed rate cut may not even mean that rates we see every day (airplane loans, for example) drop at all. To the contrary, they may even increase marginally.

Let’s dive deeper. In September, the Fed “cut rates” by 0.50%. However, the rate cut by the Fed was the “Federal Funds Rate,” which meant that not all rates dropped equally. For example, the 10-year Treasury Rate (which is a better indication of the general rate trend in the aircraft lending world) actually decreased 0.993% from its 2024 high before the Fed’s decision. Compare that to the days immediately after the Fed rate cut, the 10-year rate increased 0.085%. We’ve seen similar trends with our aircraft loan rate offerings.

What does all this mean? In essence, it supports the fact that, overall, rates have trended down, a trend that began before the Fed’s decision. It also means that the market may already have priced in the anticipated rate cuts through the end of the year, as seen by the pre-Fed cut drop in the 10-year Treasury. If financing an aircraft loan is on your radar, I think this is good to keep in mind as we push to year-end.

About the Author

Mike Smith is President of Scope Aircraft Finance and is based in Columbus, Ohio. Scope is a wholly-owned subsidiary of Park National Bank and an industry leader in providing finance solutions in the high-performance piston, turboprop, and light jet markets throughout the lower 48 States. Mike serves on the board of the Ohio Regional Business Aviation Association and is an active member of the National Aircraft Finance Association.

As we head into Q4, the topic with the most buzz surrounding aviation insurance is the term “softening” marketplace. I’m sure some of you are seeing signs of this—especially if you’re currently insuring aircraft through an aviation insurance broker.

Why is the aviation insurance market showing signs of softening? One indication is that there is additional capacity, which means more underwriting companies entering the aviation space here in the USA.

Case in point, in the past year, we’ve seen 3-4 new underwriting company entrants. Some of these new insurers were existing insurance carriers for other lines of property/casualty coverages. And now they’re expanding their product offerings to include aviation insurance. (Namely aircraft hull and liability coverages, and aviation general liability coverage).

Within the past 18 months, interestingly, we’ve seen new additions in hull and liability carriers. Two of these insurers—Mach 2 and Eiger—are entirely new aviation underwriting companies. The other two—Rokstone and Beacon Aviation—are existing property/casualty insurers that have recently expanded into offering aviation product lines.

The additional market capacity is softening the premiums for certain classes of business. Namely those that are owner/flown, lower-to-mid-value turbine and some lighter piston aircraft classes.

As with all aviation insurance, it is never a ‘one-size-fits-all’ type of business. So, while some policies are currently seeing softening rates, others are seeing flat premiums or even lingering, smaller, single-digit increases.

The new insurers in the space have almost immediately impacted the $5M and below hull value aircraft. Not to mention, they’ve affected the $5M and below liability limit landscape. They’re doing this by providing more underwriting options for consumers, depending on pilot experience and asset values insured. From a consumer’s perspective, the current and future insurance path looks particularly favorable, compared to the years 2019-2023.

About the Author

Tom Hauge is a 20+ year aviation insurance industry veteran currently serving as National Sales Director for Wings Insurance. A 1992 graduate of the prestigious UND Aerospace aviation program. Wings Insurance is one of the largest privately held aviation insurance brokerages in North America who offers a ‘boutique’ customer experience but leveraging large brokerage house clout in the market.

As many prominent aircraft brokerage leaders near retirement, the firms they represent face a serious challenge. They’ve yet to fully develop their next generation of young sales leaders.

No doubt every aircraft brokerage firm has young, eager professionals on staff—people who love aviation and are enthusiastic to learn. But newbies in high-pressure sales environments can quickly become overwhelmed. And I don’t blame them. There’s a steep learning curve to this complex business, one that requires deep industry knowledge and strong negotiation skills. Not to mention building an extensive network of high-net-worth clients.

Without structured mentorship and proper training, a developing junior sales director will stagnate. Such a lack of commitment from the top brass can lead to high turnover, inconsistent results, and potential reputational damage to the brand.

Key Success Factors for Aircraft Brokerage Firms

We often hear that aviation is a unique industry, and it’s true. Although sales volume may be low, the stakes are incredibly high. There’s a premium placed on relationships and trust. In order to succeed, brokers must consistently prove that they are credible, likable, and trustworthy. And they absolutely must leave their legacy with well-trained junior staffers to fill the void.

But the question remains, how can brokerage leaders bridge the gap as pressure mounts prior to their retirement? Their survival hinges on how effectively they can transition leadership and replace themselves with a new generation of strong, competent and strategically-minded leaders who can hit the ground running. Without a qualified pipeline of younger talent, firms whose leaders are retiring may not only lose experiential knowledge. They’ll also lose clients to competitors—especially ones with more robust leadership development and sales training programs.

The bottom line is that brokerage firms without successful transition plans will struggle. They might not be able to keep up with evolving market conditions. They may miss out on shifts in buying styles and technological advancements. Building a strong team of junior sales directors isn’t just about succession. It’s essential for sustained growth and competitiveness.

About the Author‍

Dustin Cordier is a Certified Exit Planning Advisor and EOS Implementer®. Through his firm, StepZero Coaching, he helps aviation entrepreneurs create freedom, growth and legacy, while coaching aspiring sales leaders using his aircraft brokerage expertise. Connect with Dustin at stepzerocoaching.com or on LinkedIn.

One of the greatest benefits of owning an aircraft is avoiding flying on commercial airlines. Yet, according to the FAA, many owners inadvertently (and illegally!) run their own commercial flight operations. Most owners are likely aware of the general rule against accepting payment or reimbursement for Part 91 flights. An owner can fly any friends or colleagues, but generally may not accept compensation for doing so. Like good law-abiding citizens, these owners only fly their aircraft for themselves, and never charge anyone else when they fly friends or colleagues.

However, most owners often reflexively register their aircraft in a Limited Liability Company (LLC), and run all costs and operating expenses through this LLC. Principals then make capital contributions to pay the bills. But without an operational agreement in place, such as a dry lease from the LLC to the principal or their business, the FAA would consider the LLC an illegal “flight department company” providing illegal charter. The holding company LLC’s sole purpose would be to provide transportation by air to the principal, and the principal capital contributions are “compensation” to the LLC for the flights. In other words, the principal is paying the LLC for flights—something that cannot be done unless the LLC has a charter certificate. This puts the LLC, principal and pilots at risk for FAA fines and action against the pilot’s license.

Potentially worse, since insurance policies typically require compliance with all FAA regulations, it could also provide an insurer a reason to deny coverage in the event of a loss.

The good news? You can absolutely avoid illegal charter. With a bit of planning and guidance from an aviation attorney, you can establish an FAA-compliant ownership and operational structure. Even better, this often aligns with effective state tax planning, helping you stay out of trouble while potentially lowering your tax bill.

About the Author

An attorney and owner of InFlight Law, John Farrish guides clients on the legal side of aircraft sales and acquisitions from start to finish. At InFlight Law, he represents international and publicly traded companies to family businesses, entrepreneurs and ultra-high-net-worth individuals, including owner-pilots. He is experienced in new and pre-flown aircraft transactions, ranging from large cabin to turboprops and has coordinated transactions in every continent—except Antarctica.