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

Business use of aircraft is often deductible, but the flights must be well documented to maintain these deductions. In addition to keeping your logs and tracking the passenger flight details, the IRS requires that all business use of aircraft be documented contemporaneously and in writing.

So, what does this mean and how do you meet these requirements? 

Written and Current Information

First, the information needs to be contemporaneous, or gathered at the time of the flight. Although there are opportunities to go back and obtain additional information, such as affidavits and statements, they will focus on what was available at the time of the flight.   

Second, this information needs to be in writing. With today’s technology, this is much easier, but the idea that everything is business no longer flies with the IRS (pun intended).

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Four Ways to Document Business Flights

There are several ways to adequately document your flights, below are four common practices:

• Emails. Send an email before the flight discussing the upcoming meeting, then follow up and discuss the results afterward.
  
  
• Agendas. Draft meeting agendas before the meeting and keep meeting minutes. Consider circulating in the emails above.
  
  
• Calendars. Create a calendar invitation and include the location and attendees.
  
  
• Photography and Promotion. Social media posts, videos, pictures and other media can both help and hurt you. If you post about attending a concert or a game, but mark the flight as business, the IRS may be able to find this information and argue otherwise.
  
  

Detailed Trip Sheets

Another best practice that I recommend is to keep “trip sheets” for each flight on the aircraft. This can be a one-page document completed by someone with knowledge of the flight details. Include the passenger list, purpose of the flight and other information useful for an audit. I recommend that these be signed and dated to show they were timely created.

Although it’s important to document your business flights, you don’t want it to be burdensome. The best information-gathering process will vary from owner to owner. 

Be sure to talk to your tax advisor and include your team in the process. That way, everyone can understand their role and help make all of the necessary information available.

Spring is around the corner—a season of change. And that’s timely, given what we’ve seen in the news so far; 2025 is shaping up to be a year of change.

From tariff threats and evolving geopolitical dynamics to inflation that refuses to ease, there’s a good potential for turbulence on the horizon.

So, the best advice? Buckle up.

Finance Rates: Volatility Persists

From a finance perspective, rates continue their volatile trend. Looking back at our key indicator—the 10-year Treasury—we’ve seen a 0.21% rate decrease since the last issue of The Plane Truth as of early March.

Keep in mind, we’ve seen rates go up and down in various amounts of the past year, so it’s possible rates may increase back to that level we saw in February, if not higher.

On the other hand, it’s also possible rates stay steady or decline further. As I said before, buckle up.

What about the Federal Reserve and their interest rate setting? After holding rates steady at their last meeting, all eyes are on inflation and job data. A slowdown could spur the Fed to change course and lower rates later this year. 

On the other hand, if inflation stays stubbornly high, expect the Fed to stand firm and leave rates unchanged.

2025 Economic Outlook: Impact on Aircraft Financing

What does this all mean for aircraft financing and aircraft transactions? So far, 2025 has started strong with transaction volume.

Anecdotally, market activity is healthy, and our team at Scope has been pleased with the pace of closings.

This is encouraging. But as we enter into spring, be sure to keep those seatbelts fastened in case of rough air.

Importing a multi-million-dollar aircraft from a far-away country is a daunting task, especially when navigating tariffs and customs regulations. But with the right experts on your team, the right plane at the right place justifies the process.

Currency fluctuations can make a foreign aircraft a great buy, and aircraft are uniquely situated to be imported—they are the most mobile asset in the world!

Basic Customs Process

Any product entering the U.S. stream of commerce from overseas must go through the customs/import process. Just like a shipment of toasters or televisions, aircraft must follow a similar set of rules.

Until a prominent aircraft title company executive was indicted in December 2020 for customs violations (among other more dramatic charges), customs formalities were often overlooked. Now, there is no excuse.

The customs process, when managed properly through an experienced customs broker, is not terribly complicated, nor terribly expensive.

The customs broker will typically provide a detailed set of instructions, including the required documentation. A limited power of attorney form is required for the customs broker to complete the process. Otherwise, the documents are fairly standard: registration and airworthiness certificates, a commercial invoice, and often some other paperwork necessary to establish an exemption from tariffs.

The Cost of Customs

Customs costs, including broker fees, are typically less than $10,000 on a $10,000,000 aircraft. This includes a flat cost component and a small variable amount based on the aircraft value. The customs process is more to measure the flow of goods into and out of the U.S. than a governmental money-grab.

Flight details must be coordinated with the customs broker at least 24 hours before the aircraft’s departure to the U.S. The customs broker can help pick a suitable airport to handle the customs process. Last time I checked, there were about 50 to choose from. Each airport has its pros and cons, depending on the planned flight path and the day of the week and time of arrival.

How Tariffs Impact Aircraft Imports

Nobody has escaped the constant talk of tariffs over the past few months. While tariffs may serve as an international negotiating tool (hammer), they often lead to higher costs for consumers. They can also be especially harmful to industries that rely on international supply chains.

Perhaps worst of all is the uncertainty the threats of tariffs create, making it difficult for businesses to plan. The early March stock market fluctuations reflect this challenge.

On March 4, the U.S. implemented a 25% tariff against most Canadian products, including Canadian-manufactured aircraft (e.g., Bombardier and certain Diamond aircraft).

While these tariffs were temporarily lifted a few days later, the confusion has set in. Further, tariffs have been threatened against the EU, which would also affect Dassault Falcon aircraft.

Key Considerations for Aircraft Tariffs    

The potential tariffs on any particular aircraft are very fact-specific, but there are a few key items to keep in mind when planning:

• Manufacturer’s origin. Generally, tariffs are based on the country of manufacture, not the country where the plane is registered or where it is arriving from.
  
  For instance, if tariffs were in effect against Canadian products, then a Bombardier product could be subject to tariffs whether it’s coming from Canada or England. But a U.S.-manufactured Gulfstream or Textron aircraft coming from Canada would not be subject to the tariffs.

• Timing. Tariffs are due when the plane arrives in the U.S. to clear customs, not when title changes. If a plane arrived in the U.S. and cleared customs on March 1 before tariffs took effect, no tariff would be required. This remains true even if the transaction was completed weeks later after the tariffs were in effect.
  
  Likewise, if you bought a plane overseas before tariffs took effect, the timing of the purchase wouldn’t matter. Tariffs would still apply if the plane wasn’t imported to the U.S. until after they were in effect.    

With tariffs and an intercontinental trade war brewing, the purchase agreement should specify what happens if the tariff environment changes mid-transaction.

All parties should also endeavor to get the plane imported through U.S. customs as soon as possible before tariffs could affect the foreign-made plane that could be affected.

Stay tuned for upcoming articles that break down the challenges of buying a foreign aircraft—and how to navigate them with confidence.

Part 2: Aircraft Title: Registration and Deregistration

Part 3: Airworthiness: How to Get the Aircraft Ready to Fly

Part 4: How to Balance Taxes Between Multiple Jurisdictions

Part 5: Logistics: Where to Inspect the Plane and Complete Closing?

Part 6: Contractual Quirks of Foreign Transactions

This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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Should you worry about your aircraft insurance renewal that's due within 30 days? The short answer is: No. 

The aviation insurance underwriting community is very small by comparison to the overall insurance market for other property and casualty type risks. There are only about 20-22 aviation insurance underwriting companies here in the U.S. that cover aircraft hull and liability policies. 

Of those 20-22 markets, only a faction of those are viable for mid and large cabin aircraft–typically 8-9 in total. If you pare things down to light piston aircraft, there are about 10 markets that underwrite light piston policies. So depending on what you operate the amount of viable insurers is a smaller subset of those 20-22 total insurers. 

The aviation insurance market is for the most part “captive.” This means the majority of the aviation insurers in the turbine space only accept a submission from one broker and it’s “first-come, first-served”. 

For example, you can’t own a Challenger 350 and call five insurance brokers expecting you’re going to get all of them to quote the policy. The underwriters in this class work as noted on a first-come, first-served basis. Thus, the first broker that approaches them on a specific policy is the broker of record who will receive their quote. That is, if they’re indeed interested in quoting you. 

Insurers generally don’t quote policies 45-60 days out from the expiry date. Typically the broker gets traction with interested underwriting carriers inside of 45 days and in most cases inside of 30 days. 

As such, if your insurance broker is being completely thorough in the market, you should receive your renewal proposal within 2-3 weeks of the policy expiration date. Thoroughness is what you should expect in your broker, but also transparency. Your broker should outline the underwriting markets that they shopped your policy to, and which replied/declined or quoted the risk. 

Lastly, do not expect to receive quotes from every insurance carrier as insurers won’t “quote just to quote” each year. If an insurer has quoted your business in prior year(s), and didn’t obtain the business, they may not offer terms the subsequent year on your policy. Your specific risk may not perfectly fit in the insurer's underwriting box based on the underwriting metrics associated. This depends on limits carried, insured value, single-pilot operations, dry leases, etc. 

At the end of the day, you should receive your renewal package from your broker about 2-3 weeks prior to your policy’s expiry. That window will allow plenty of time for you to review the options in the market, ask questions and secure any revisions needed to the formal insurance proposal. 

Binding a policy takes a broker mere minutes so once you give your insurance broker the “ok” you’ll promptly have an insurance binder evidencing your coverage for the coming year’s policy.

Bizav shows and events like NBAA Leadership Conference, Corporate Jet Investor and NBAA Business Aviation Convention & Exhibition are critical opportunities to strengthen relationships, build credibility and close deals. 

But with high costs and packed schedules, there’s no room for wasted time or resources. Without a focused strategy, companies risk leaving with nothing but a stack of business cards. Success hinges on three key areas: preparation, execution and follow-up.

Pre-Event: Plan with Precision

Winning at an event starts weeks—if not months—before showtime. Every dollar spent should be tied back to a specific business goal. 

Are you there to close deals, strengthen existing relationships, find referral partners, or recruit talent? Set clear, measurable objectives so every action is intentional. Write them down and visualize how to make it happen.

Consider these pre-event planning practices:

Target Key Attendees: Research who’s attending—decision-makers, influencers, and potential partners.

Book Meetings in Advance: Don’t wait until you’re at the event to make connections. Reach out early via LinkedIn, email, or a warm introduction from a mutual contact. Aim to lock in meetings with at least three high-value prospects per day.

Plan Private Engagements: Face-to-face time is invaluable. Host a private breakfast, VIP cocktail event, or exclusive demo at a nearby FBO. At the NBAA Leadership Conference, consider scheduling an intimate dinner with key executives as it may be more valuable than a dozen random booth conversations.

Pre-Event Social Media Engagement: Announce your attendance on LinkedIn, tag event hashtags like #CJIMiami, #NBAALeaders or #NBAA2025BACE or #NBAASDC, and comment on posts from target prospects to increase visibility before the show even starts.

On-Site: Be Intentional, Not Just Present

Simply being at the event isn’t enough—every interaction must be strategic. Consider how you “show up” at the show:‍

Position Yourself as a Connector: Instead of just pitching your services, focus on introductions. Connecting two industry contacts can build goodwill and strengthen your credibility.‍

Engage the Right People: At NBAA BACE, don’t just work the exhibit hall—identify VIP networking events or after-hours gatherings where high-value decision-makers are more accessible.

Use Customer Stories to Sell: Instead of rattling off aircraft specs, share real success stories of how your services solved a problem for a flight department, charter operator, or aircraft owner.

Leverage Social Media in Real-time: Post key takeaways from speaker sessions, tag new connections in LinkedIn posts, and use event hashtags to increase visibility beyond the show floor.

Leadership’s Role: Setting Expectations & Evaluating Performance

For leadership teams, sending employees to industry events is an investment that should yield measurable results. Set clear expectations regarding how team members should engage with prospects, conduct themselves at networking events, and track their interactions. 

As a leader, ensure that your team members aren’t just attending events but are actively contributing to the company’s growth.

After the event, schedule a “hotwash”—a structured debrief—to review the sales pipeline, analyze what worked and what didn’t, and refine strategies for future events. 

Did pre-scheduled meetings lead to meaningful follow-ups? Were key decision-makers engaged effectively? Were there missed opportunities? 

A focused post-event analysis helps teams continuously improve and extract more value from every conference.

Post-Event: Convert Conversations into Business

The event isn’t over when you pack up—it’s just the beginning. Here are recommendations to convert those conversations into business opportunities.

Follow Up Within 48 Hours: Send personalized emails referencing specific conversations or better yet PICK UP THE PHONE AND CALL. Example: “Great meeting you at BACE—you mentioned the need for more flexible charter availability. Let’s schedule a call to learn more about your priorities and what options exist.” Most sales people don’t do this step so- it will set you apart.

Keep the Conversation Going: Provide value beyond the event. Send a case study, a white paper, or an introduction to a relevant contact.

Track and Nurture Leads in a CRM: Don’t let valuable connections go cold. Assign next steps and set reminders to follow up at the right time.

Reconnect at the Next Industry Event: Business aviation is relationship-driven, and staying visible across multiple events strengthens trust, likability and credibility.

The Bottom Line to Maximizing Event ROI: The Bottom Line

Aviation events like NBAA BACE, Leadership Conference, and Schedulers & DispatchersS&D aren’t just networking opportunities. T—they’re high-stakes sales and relationship accelerators. 

A successful event isn’t about how many people you meet, but how many turn into lasting business opportunities. With strategic planning, intentional engagement, and diligent follow-up, these events become revenue-generating investments, not just expenses.

Lately, in conversations with industry colleagues, one thing is clear—business aviation maintenance is changing fast. Technology, labor shortages, political headwinds and supply chain issues are reshaping the landscape.

Here’s a look at some key trends currently shaping the industry:

The Growing Importance of a Maintenance Tech Stack

Aviation maintenance is becoming increasingly digitalized, with operators adopting integrated tech stacks to improve efficiency. Advanced Enterprise Resource Planning (ERP) and Mx-tracking systems, predictive maintenance software and electronic record-keeping solutions are reducing administrative burdens and improving fleet reliability. 

AI-driven analytics, combined with aircraft Central Maintenance Computers (CMPs), are also optimizing maintenance schedules by predicting failures before they occur. These tools streamline compliance and enhance operational decision-making, making aircraft maintenance more proactive rather than reactive.

Managing Maintenance with a Labor Shortage

The ongoing shortage of skilled aviation maintenance technicians remains a challenge, forcing companies to rethink how they attract and retain talent.

Business aviation organizations are investing in apprenticeship programs and partnerships with technical schools. They’re also attracting new talent into the workforce with improved compensation packages. 

At the same time, aviation MROs and operators are leveraging automation, better planning tools and AI-powered scheduling to maximize efficiency with a lean workforce. Simplifying administrative tasks with digital solutions is also helping technicians focus more on hands-on maintenance rather than paperwork.

The Impact of DOGE

The Department of Government Efficiency (DOGE) initiative is looking to drive greater efficiency which could translate into a potentially downsized FAA. (I’ve already heard from more than one operator that delays in new aircraft conformity inspections are to be expected.) 

DOGE’s focus on streamlining regulatory processes, reducing paperwork and encouraging automation will no doubt put more pressure on MROs and operators in the short to medium term. With reduced FAA resources, maintenance teams executing repairs and overhauls more swiftly, reducing aircraft downtime and enhancing operational efficiency, will take on added importance.

Continued Parts & Supply Chain Challenges

Supply chain disruptions continue to impact aviation maintenance, with longer lead times for critical parts and rising costs. The industry is responding by increasing the use of 3D printing for on-demand manufacturing, parts pooling programs, and deeper supplier partnerships. 

Companies are also stockpiling key components to avoid delays and investing in predictive analytics to better anticipate part needs before shortages arise.

Expansion of Aviation Maintenance Capacity

To address growing demand and operational pressures, major MROs, OEMs, and operators are expanding their maintenance facilities and capabilities. More hangars, service centers, and mobile maintenance units are being introduced to handle increasing fleet sizes and maintenance requirements. 

This expansion is being driven by existing industry Mx players and (very) large operators seeking faster turnaround times and improved service availability.

Looking Ahead

Business aviation maintenance will continue its transformation in 2025. Companies that embrace tech stack integration—eliminating duplication, cutting errors and saving time—will gain an edge. Success will also hinge on workforce development, navigating regulations and strengthening supply chains. Those who adapt will thrive in an industry that never stands still.

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Most U.S. aviation insurance policies for turbine and pressurized aircraft require initial or recurrent training for flight crews. In the case of mid-size and large cabin business jets, these requirements are typically straightforward, especially for the PIC and SIC. And, in almost all cases, insurers require completion of formal initial or recurrent training in a full-motion simulator—most commonly conducted by CAE or FlightSafety International.While some insurers allow workarounds for mid-size and large cabin aircraft, they typically apply to the SIC, not the PIC.

For example, accommodations for the SIC may allow them to meet only FAR Part 61.55 qualifications. However, it’s important to understand that FAA regulations and insurance requirements are entirely separate. What is considered "legal" under the FARs may not necessarily meet an insurer’s training requirements for coverage. Always consult with your insurance broker to confirm your planned training is going to be compliant with your insurance policy requirements.

Pilot Training Requirements for Light Aircraft

On the flip side, pilot training requirements for light jets and turbo-props can be less clear-cut. Insurance policies often state that pilots must complete initial or recurrent training with a provider approved by the insurer.

That said, not all training providers are accepted by every underwriting carrier. Currently, more than 20 insurers issue aviation policies in the U.S., each with its own approval criteria.

If you operate a King Air, Pilatus, or light Citation aircraft, always consult your broker before scheduling an in-aircraft training event. This is especially important if you plan to train outside of a simulator-based program.

Not all insurers allow in-aircraft training, as approval depends on several factors. These include pilot experience, the aircraft’s insured value and the liability limits on the policy.

In many cases, insurers may permit in-aircraft training on an alternating-year basis. Some may allow it every year, but this varies by policy and specific underwriting criteria.

Keep in Mind

Aviation insurance policies are not one-size-fits-all, and no two are exactly alike. Always check with your broker before completing policy-required training to ensure compliance with your coverage and pilot warranties.

Recent FAA Registry changes are causing shifts in the way title/escrow agents are handling aircraft transactions. While some updates enhance efficiency, others create delays.

Here’s what these changes mean for those involved in closings:

Addressing Privacy Concerns

In December 2023, you may recall that the FAA removed access to Ancillary Documents, citing privacy concerns over Personally Identifiable Information (PII). This includes details like Social Security numbers, driver’s licenses, and loan numbers. The change restricted access to critical documents such as LLC Statements, Powers of Attorney, and Trust Agreements. This created challenges for the industry, making it harder to properly vet information for closing documents. Thankfully, escrow companies and law firms stepped in to push for change.

New “Work in Progress” Classification

Fast forward to December 2024, the FAA introduced another procedural change in the name of privacy. Now, any document filed but not yet recorded is classified as “Work in Progress” (WIP). Again, the idea is that the general public should not be able to view documents until an FAA examiner has reviewed the document for PII. 

The downside though is that there’s now a delay in being able to see those documents. We all know how quickly aircraft transactions can move, and a key component is running title work. In the past, there was immediate access to these documents which allowed you to plan and run complete title work. As it stands now, we can tell when documents have been filed, but we’re delayed in viewing them. 

While the intent is understandable, the delay in document access is impacting closings and transaction efficiency.

New Digital Registration Cards

For all of the negative changes, the FAA is making some positive ones. For example, they’re issuing digital registration cards. We probably get 7-10 emails a week of “I lost my hard card, can you order a new one?” Or “We’re supposed to leave tomorrow morning and we still don’t have our registration card.” In theory, these new digital cards should reduce lost card issues and expedite access for operators needing immediate documentation. 

More FAA Examiners

Another positive note is that the FAA has hired more examiners and they’re doing a good job of keeping up with the backlog. I don’t envision us ever seeing the 10-12 backlog that we saw during the COVID years. 

Communication

The biggest challenge remains the FAA’s lack of communication. These policy changes, good or bad, are always just rolled out without discussion. The industry is rarely consulted before these changes take effect. 

If given the opportunity, aviation professionals could provide insight into the real-world impact of new policies. While we can’t control these shifts, we must remain adaptable as the FAA continues making changes—both good and bad.

Tragically, on January 29^th, the business aviation community lost two of our own. Casey Crafton of Guardian Jet and Vikesh Patel of GE Aerospace were among those killed in the American Airlines Flight 5342 crash. Our prayers and support go out to their colleagues and families. 

During my service in the U.S. Air Force, I was a formally trained aircraft accident and incident investigator. Fortunately, I never had to respond to a fatality. In the aftermath, it’s the worst call one can ever make.

The issue forces us, as aviation business leaders, to ask ourselves, how well prepared are we to respond to a crisis?

The Role of Leadership Communication

Effective leadership communication is crucial during a crisis. Especially when uncertainty and high stakes demand clarity, trust and decisive action. 

Charles Duhigg, the author of the book Supercommunicators, recently presented a keynote at the NBAA Leadership Conference. During his address, he shared that great communicators excel at three things: translating complex information, building trust and bridging different perspectives. 

These communication principles are essential in crises (e.g., data breaches, COVID and aviation disasters) where unclear facts and severe consequences require leaders to communicate with precision and empathy.

Translating Complexity into Clarity

One of the key principles in Supercommunicators is the ability to simplify complex information. Let’s not kid ourselves; people will assume the worst, and social media will amplify their fears and confusion. 

The great “toilet paper shortage” of 2020 is an example. 

Effective leaders can’t afford to surrender to wild imaginings. We must help our teams navigate uncertainty by quickly identifying and assessing the risk and clearly communicating the plan to our teams.

The good news is that we don’t have to do this by ourselves. Our leadership teams will be a tremendous asset if we’ve invested in hiring the right people. With respect to our brave military members, businesses commonly set up “war rooms” when faced with a sudden loss. The purpose of the war room is to gather and sort through relevant information so you can prepare and respond to the threat.

The war room also brings clarity to the situation for the entire team. People respond to leadership and take comfort in knowing that the leadership team is fully invested in mitigating the risk. Sometimes, seeing the team's dedication to addressing a critical issue calms emotions and brings people back to clearer thinking.

Building Trust Through Transparency

Trust is essential during a crisis, and we as leaders must acknowledge the uncertainty while committing to transparency.

Nothing will ruin a team faster than lack of transparency during a crisis. The Boeing 737 MAX crashes in 2018 and 2019 illustrate the dangers of poor communication. 

Boeing initially downplayed software issues, eroding trust in both the company and regulatory agencies. When facts emerged, the lack of transparency worsened public perception. This led to prolonged safety concerns and financial damages.

People respect someone telling them how it is, even when the facts make it difficult to do so. If you have an effective war room, you will achieve as much clarity as possible with the information you have. If you’ve hired the right people, you'll be amazed at how they rise to the challenge when they feel that you’ve been honest and transparent with them.

Bridging Perspectives and Fostering Unity

Crisis communication requires addressing different audiences—technical experts, policymakers and the general public—each with unique concerns. Duhigg’s principle of bridging perspectives requires leadership and decisive action. 

After extensive consultation with advisors, a leader eventually will have to make the call on how to move forward. 

At the recent CJI London conference, I spoke with Mike Dwyer, managing partner and co-founder of Guardian Jet, about losing Casey Crafton. Mike’s leadership team has had many sleepless nights trying to do the right thing for Casey’s family and the entire team. However, Mike and his partners had the courage to make the call and implement a solid communication plan, and the healing process is already in motion.

Ultimately, leadership communication during crises must prioritize clarity, transparency, inclusivity and good judgment. By applying the principles laid out in Supercommunicators, leaders can reduce fear, build trust and guide people through uncertainty.

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So you took delivery of an aircraft in a fly-away state. You’re in the clear, right? Not necessarily. Aircraft are mobile property and can be taxed in multiple jurisdictions. States are becoming more savvy and are starting to enforce compliance.

With increased reporting and information sharing between agencies, we’re seeing a huge influx in state and local audits looking for non-compliance and lost revenue related to aircraft. 

There are two main state and local taxes that need to be considered. First, we have sales and use tax which is imposed on the purchase of the aircraft, usually enforced by the state. Second is property tax, which is an annual tax imposed on the value of the aircraft, usually enforced by individual counties.  

State Sales Tax Considerations

Sales tax is imposed when a transaction takes place in a state and use tax applies when an aircraft is brought into the state after the transaction. Many deliveries take place in a tax-friendly state to help manage the initial sales tax obligation. But use tax usually applies once the aircraft arrives at its home airport. 

Many states have options to defer the tax, or even full exemptions, but there are procedures that must be followed and requirements to be met. Therefore, the plan needs to be in place before the aircraft arrives in the state.

State Property Taxes 

Property tax is assessed annually for many states and each jurisdiction has its own set of rules for filing. It’s important to know if you have a property tax obligation and how to file. Keep in mind, it’s the taxpayer’s responsibility to comply. So you’re not off the hook if the state doesn’t contact you.  

Some states, such as Missouri and Texas, will only allow discounted rates and apportionment for timely filed returns. That means late filed returns can be very costly.  

Final Thoughts

As it relates to state taxes, the situation becomes even more complicated for aircraft owners who spend significant time in multiple states. There are many opportunities to manage state and local tax obligations. That is, if you plan early and ask the right questions. Understanding potential liabilities in advance can prevent unexpected tax bills down the road.

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As we’ve discussed over the past few months, longer-term interest rates have tended to stay elevated, even when the Federal Reserve was cutting rates. I say “was” because after their most recent meeting on January 30, the Fed opted to push pause on further cuts while they study the incoming data.

What data points are they waiting for, and why does it matter? Going back to a line made famous by former Secretary of Defense Donald Rumsfeld, there are two distinct areas of focus right now by the Fed. The “known unknowns,”  and the “unknown unknowns.”    

The Fed’s focus in adjusting rates is part of their “dual mandate” of full employment and price stability. The concept of “price stability” is mostly rooted in trying to keep inflation at around 2%.  As I’m sure you’ve seen at the grocery store, prices on things keep going up in fits and starts. Unfortunately, the inflation level is still higher than the Fed wants to see, which explains the pause in rate adjustments. The “known unknown” here is that we don’t know when inflation will slow down a bit further to allow the Fed to continue to lower rates.

Another “known unknown” would be impacts of any tariff policy emanating from the new presidential administration. Time will tell exactly what tariffs are put into place, and what sort of economic impact that may have. We did see a preview of what’s to come in early February.

A third “known unknown” is the rising government debt. Fundamentally the Treasury bills and notes fund the government deficits, and some of the increase in the longer-term rates (which impacts things like aircraft loan rates) can be attributed to market concerns about ballooning government deficit spending and subsequent increased debt.

Finally, another unknown unknown would be any geopolitical or other “black swan” event which could impact the U.S. economy. That would change the approach the Fed is taking with interest rate policy.

As the year continues to take shape, keep your eye out for these known unknowns, and always be aware of the unknown unknown that could be lurking around the corner!

One of the pleasures of working in the legal world of aircraft transactions is that, unlike litigation, the buyer and seller are both willing participants.

It’s safe to assume that the buyer wants to buy and the seller wants to sell. But what happens when a party changes their mind? Or they’re unable to perform their obligations?

Properly drafted default clauses are key to giving the parties certainty over what will happen in the event of a breach of contract. Sometimes more importantly, they explain what won’t happen.

Additionally, a default clause should always include a cure period, allowing each party the opportunity to address and resolve a breach. This is especially important when a party may even be unaware they’re in default. Ideally, the breach is identified, promptly corrected, and the transaction proceeds as planned. 

From there, the clauses should specify what remedies each party is entitled to.

Understanding Buyer and Seller Default Remedies

For a purchaser default, the seller is typically entitled to receive the purchaser’s deposit directly from the escrow agent. This is in lieu of collecting other damages from the purchaser, such as costs incurred for the transaction, loss of use of the plane during the attempted transaction. 

It also accounts for the loss of value, as the plane would typically be worth slightly less after the transaction started). The purchaser would not owe the seller any other amounts related to the transaction.

For a seller default, the purchaser is typically entitled to receive their deposit back from the escrow agent, but that does not begin to make the purchaser whole. Additionally, purchasers often negotiate the seller default clause to include reimbursement of all purchaser’s out-of-pocket costs incurred for the transaction. 

This still doesn’t compensate the purchaser for their loss of bargain, particularly if they must find a replacement aircraft at a higher price. In some cases, the purchaser can negotiate for the seller to pay an amount equal to the deposit.

Why Waiving Specific Performance Matters

Perhaps most importantly, both parties’ clauses should include a waiver of the right to specific performance. This is a party’s right to sue to force the other party to complete the transaction as planned. 

However, this could tie up the plane for years in litigation, leaving the “winner” of the lawsuit with a neglected aircraft that has depreciated in value and may require significant maintenance or repairs to return to service.

Nobody wins in this case—both parties endure financial losses, operational setbacks and prolonged uncertainty.

Hopefully, your default clauses will never end up on a judge’s desk, but they do provide guardrails to disincentivize each party from breaching the contract. By establishing clear remedies and limitations, well-crafted default clauses help ensure that disputes are resolved efficiently, allowing both buyers and sellers to move forward with minimal disruption.

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This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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Many aircraft sale listings note that an aircraft is “on programs” (e.g., maintenance programs). These programs typically include “power by the hour” arrangements for engines or APUs, and, in some cases, airframe maintenance.

The gist is that an aircraft owner pays the original equipment manufacturer (OEM) or third-party program provider a specified rate per hour of use, plus a monthly fee. In return, the program provider pays for certain specified maintenance costs for the engines, APU, or airframe

Similar to other industries, aircraft OEMs generate a significant portion of their revenue from ongoing maintenance. Naturally, program providers aim to profit from these maintenance programs as well. So what benefits do they offer aircraft owners?

Benefits of Aircraft Maintenance Programs

At least three key benefits stand out. For starters, an aircraft owner can spread out maintenance costs. These are typically paid by the hour and month instead of in large amounts when the actual maintenance is performed.

Second, a maintenance program will often increase an aircraft’s resale value. When selling a plane nearing overhaul, one on a maintenance program will typically cost significantly more than one without. This is because the next expensive maintenance event has largely been prepaid.

Additionally, aircraft that are on maintenance programs are perceived to be better maintained. With the program covering the maintenance costs, there’s little incentive for owners to skimp or cut corners on upkeep.

Third, a program will lower your overall maintenance costs. This is because program providers have enormous buying power, including the third-party providers, that source their own parts. In turn, this translates to savings for the owner–even taking into account the actuaries’ cut in the program providers’ offices.

Purchase Agreement Considerations

Whether buying or selling an aircraft, it’s imperative that your aircraft purchase agreement addresses the various aspects of maintenance programs. First, it should cover whether the plane is delivered with the programs. Since many programs allow deferred hours or balloon payments due at engine overhaul, address any such “deferrals.”

Conversely, the purchase agreement should cover whether a current owner can “cash out” any positive balances in the programs (to the extent allowed). Finally, the purchase agreement should cover whether a purchaser must complete the transfer of the programs.

These variables can sway the value of the aircraft by hundreds of thousands of dollars or more, and prevent costly fights later on about the status of program enrollments.

When buying an aircraft “on programs,” most purchasers elect to continue the enrollments. It makes good business sense. Why stop paying into an engine program when the previous owner has already contributed a substantial amount toward the next major maintenance event?

That said, the decision to buy a plane enrolled on programs should be made in conjunction with advice from your aircraft broker. They’ll explain the intricacies of each manufacturer’s program-specific benefits. With your aircraft broker’s guidance, you can determine if a plane on programs is right for you. After all, it’s certainly cheaper in the short term to buy a plane without programs if you plan on discontinuing them anyway.

How to Transfer Maintenance Programs

The typical transfer process involves the seller providing proof of enrollment and the current invoicing status. (This is because the program provider usually only communicates with the current owner). Invoicing from program providers often lags because it relies on the owner reporting their flown hours. Any shortfall can be reconciled at closing, as calculating amounts owed is straightforward using the last reported hours and the hours on the aircraft or engines at closing. Program providers supply the paperwork, whether it’s an assignment or a new enrollment contract.

Some new owners prefer to avoid regularly scheduled payments, choosing instead to invest in their businesses until the cash is needed when aircraft maintenance expenses arise. However, an often-overlooked risk of discontinuing a previous owner’s maintenance programs lies in potential early termination fees or liquidated damages provisions.

Certain maintenance programs are “term” contracts that heavily penalize owners for discontinuing them. One manufacturer’s airframe maintenance program is particularly aggressive in enforcing these penalties. Another OEM’s program imposes penalties if the provider has paid more for maintenance than the owner contributed, and the contract is terminated before the scheduled term ends. In such cases, owners may receive surprise invoices for tens of thousands of dollars–or more–within months of closing the sale.

If these scenarios aren’t addressed in the aircraft purchase agreement, disputes over responsibility for termination fees or liquidated damages can arise, post-sale. 

While maintenance programs can simplify upkeep and stabilize costs for aircraft owners, failing to address them in the purchase agreement leaves both parties vulnerable to costly conflicts down the road.

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This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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A pilot’s perspective offers a profound lesson for leaders: the sun is always shining, even when obscured by clouds. This truth is not rooted in wishful thinking or positive self-talk but in experience. When faced with the greyest skies, a pilot knows that ascending to a higher altitude reveals blue skies and radiant sunshine. 

Similarly, an aviation leader’s role is to cultivate certainty within their organization by grounding it in three fundamental steps to success: desire, willingness to act and iteration.

Step 1: Desire – Specific and Measurable Goals

Desire is the cornerstone of any achievement, but it must be specific and measurable. Vague aspirations lead to vague results. 

Whether the goal is increasing revenue, improving team performance, or launching a new product, clarity and precision are essential. Without an aligned vision, there can be no buy-in from the team. The team will lack inspiration and meaningful action.

Step 2: Commitment to Act

Desire without action is empty ambition. Just look at failed New Year’s resolutions. Many people resolve to make changes—improving health, finances, or relationships—but fail to take the necessary steps. 

Action bridges the gap between intention and reality. However, action alone can lead to frustration if it lacks purpose. Busyness does not equal effectiveness. Action must align with the specific, measurable goals defined by desire. 

Step 3: Iteration – Learning, Adapting, Improving

Even the best plans need adjustment. Iteration ensures growth by fostering an ongoing process of learning and improvement. An aviation leader’s role is to understand that setbacks and turbulence are part of the journey but can be navigated through effective iteration. This requires healthy debate, which is only possible in an environment of trust. 

Trust stems from vulnerability—a willingness to admit mistakes, ask for help, and collaborate openly. When teams engage in honest reflection and constructive dialogue, iteration becomes the engine that ensures success. 

Just as a pilot trusts in the laws of physics and nature, a leader must trust in the principles of success. Positivity can place a team in the right mind set, but following the principles of success is what creates certainty. 

Aviation leaders inspire their teams beyond doubt into humble confidence by fostering an environment of trust and focusing on desire, action, and iteration. A trust that the process works and the knowledge that, just like altitude is the only barrier to sunshine, time is the only barrier to success.

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Our firm has been seeing an increase in multi-owner aircraft structures over the past few years. This means you share aircraft ownership, which is a great way to cut down on overhead and reduce your overall costs of ownership. 

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However, what many owners do not realize is that the tax treatment of these arrangements depends heavily on how the aircraft is titled and structured.  

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There are two primary ways that multiple owners can own an aircraft. First, and usually the default, is to put the aircraft in an LLC and have each owner own a piece of the LLC.   

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The second, often more favorable option, is co-ownership, where each owner holds a registered, undivided interest in the aircraft. With proper planning, both structures can comply with FAA regulations, but their tax implications differ significantly.

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If the owners will be the primary users of the aircraft, the co-ownership structure is almost always the better option. With the co-ownership, it’s possible for the owners to elect out of partnership treatment and treat their “piece” of the aircraft as a single aircraft for tax purposes. This means that each owner can handle their tax planning independently of the others. In many cases, this is the only option to allow deductions for bonus depreciation.    

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In the multi-member LLC structure, we run into two major hurdles. First, the related-party leasing rules under IRC Sec 280F disqualify many related party leases from being eligible for bonus depreciation. If the owners or their related businesses are the primary users of the aircraft, bonus depreciation will likely not be an option. 

Second, the LLC operates as an aircraft rental company, so it generates passive losses that can only offset passive income, not active business income. Even if the aircraft is eligible for bonus depreciation, most taxpayers cannot use the passive losses in the current year.   

If you're buying an aircraft with multiple owners, be sure to consult with your aviation tax and legal advisors. They’ll be able to explore the two ownership structures and choose the option that best meets your financial interests. 

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A new year traditionally represents new beginnings and a clean slate. From an aircraft finance perspective, this new year is starting off with quite a bit of carry over activity from 2024. 

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This carryover is due to several buyers deferring their purchases into 2025 in anticipation of a more favorable tax environment under the new Presidential Administration. Even so, we saw robust financing activity closing out 2024, despite interest rates starting to increase.

Rate Direction in 2025

In December, the Federal Reserve dropped their interest rate another 0.25%. However, as we saw through the back half of 2024, this did not result in a decrease in longer-term interest rates. Case in point: the 10-year treasury yield rose up 0.45% from December 6, 2024, to January 6, 2025. 

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The Fed’s cut was also considered a “hawkish cut.” Meaning, they plan to slow the pace of rate reductions in 2025 and rely more on economic data to make future cut decisions. 

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Only time will tell how many more cuts the Fed makes in 2025. But, as we’ve seen with longer-term interest rates, don’t expect much downward change in aircraft finance rates in the near future.

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The good news is that this overall interest rate stability signals a fundamentally healthy economy. Thankfully, all signs point to a robust year in 2025. This bodes well for aircraft financing availability, and we’ll hopefully see more predictability in financing costs than in recent years. 

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As insurance brokers, we’re often asked the question: ‘What’s an open pilot clause?” In short, it’s a provision found in most aircraft insurance policies which allows other pilots to operate the aircraft if they meet a minimum level of experience/qualifications. So the aircraft can be flown by a pilot meeting the open pilot provisions without providing formal notice to the insurance policy’s underwriter. 

While not all aircraft insurance policies have open pilot provisions, the vast majority do. Especially in the general aviation class. 

Some policies are written on a “named pilots only” basis, where the insurer limits its exposure to pilots formally listed or named on the policy. These policies do not include open pilot provisions.

A named pilots-only policy doesn’t necessarily mean there is no ability to add or qualify additional pilots. It requires the policyholder (usually the aircraft owner) to formally submit pilot experience forms for any pilots they want approved. From the insurer's perspective, being approved to operate an aircraft either requires being a named pilot or meeting the open pilot requirements.

A policy with open pilot provisions allows a pilot, who may be unknown to the insurance company, to operate the aircraft on behalf of the owner or named insured. This is done without compromising the coverages provided by the policy. 

A common misconception is that a pilot who meets the open pilot requirements is “covered” to operate the aircraft. That statement is only partially correct. A pilot flying under an open pilot clause ensures that the coverage provided to the aircraft owner remains in full force should there be a loss. However, there’s no direct coverage afforded to the pilot if they’re personally liable for a loss (incident or accident). For a non-owner pilot to have coverage in their favor, they must either possess a non-owned policy (think renters insurance) or be listed on the policy as an additional insured party.

We do encourage non-owner pilots, who regularly operate an aircraft, to ensure that they’re listed as a “named pilot.” A named pilot is known to the insurance company and listed within the policy pending submittal and acceptance of their pilot experience form. The owner(s) of the aircraft, and anyone frequently operating the aircraft, should be listed as named pilots. 

I like to think of the open pilot clause as an after hours, weekend or one-time type provision. It allows pilots to fly an aircraft when the insurer may be unavailable to vet the pilot, or when the situation warrants a one-time flight (e.g., repositioning flight). 

For pilots who don’t own the aircraft, whether in whole or in part, do your due diligence. Request to be listed as an additional insured if you expect to have insurance coverage in your favor should there be a loss, incident, or accident. After all, being a named pilot doesn’t automatically extend insurance coverage to a non-owner pilot. To have coverage, you must also be listed as an additional insured on the policy.

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Looking to market and sell your airplane? Aviation photography is your most powerful tool for showcasing an aircraft effectively and attracting serious buyers. Video runs a close second.

With a surge of pre-owned aircraft entering the market, standing out is critical. High-impact visuals can make all the difference.

Why Hire an Aviation Photographer?

Shooting inside jets isn’t like regular photography. Professional aviation photographers understand tight cabin spaces, reflective surfaces and specialized lighting needs. They know how to highlight luxurious interiors, advanced avionics and custom features without distortion.

Staging Tips for Stunning Aircraft Photos

• Clean and Detail the Aircraft: A spotless airplane sends a strong first impression.
• Perfect the Lighting: Natural light works wonders, but supplemental lighting ensures every detail shines.
• Declutter the Cabin: Remove personal items and simplify the space.
• Show Key Features: Highlight the flight deck, leather seating and tech upgrades.
• Choose the Right Location: A hangar backdrop or runway setting adds a dramatic touch.

What to Look for When Hiring a Photographer

• Experience in Aviation Photography: This niche requires technical know-how.
• Portfolio of Aircraft Shoots: Look for well-composed, properly lit images.
• Expertise in Video Production: A skilled videographer can create cinematic walkthroughs.
• Attention to Detail: Small touches matter, from framing to post-production edits.

The Competitive Edge

With over 20 years of aviation photography experience, I’ve seen how compelling visuals transform sales. Vivid images offer potential buyers an accurate, enticing view of an aircraft’s condition, design, and unique features.

Detailed shots of the flight deck, cabin and exterior build trust and credibility. Prospective buyers can explore key attributes virtually, gaining familiarity before committing to an in-person tour.

Once uploaded online, these visuals reach buyers worldwide, far beyond local markets.

Why Quality Visuals Matter

Professional aviation photography elevates an airplane’s perceived value. High-resolution images and cinematic videos suggest meticulous care and attention to detail. The right presentation can justify a higher asking price and shorten the sales cycle.

In summary, aviation photography and video help aircraft stand out from the competition. They enhance marketing efforts through clear, engaging visuals that expand market reach and boost perceived value. Investing in top-tier visuals is a smart move for sellers looking to attract serious buyers fast.

How can you buy an aircraft with only a week or two left, no time for a full inspection, and booked inspection facilities?

In football terms, there are just two minutes left on the clock and no timeouts.

From experience, these last two weeks of the year are the “Super Bowl” for aircraft transactions—when buyers race against time to close deals before the year ends.

Buying an aircraft under tight year-end deadlines isn’t easy. It requires quick decisions and creative strategies. While an aircraft transaction typically takes 4-8 weeks when there’s no time crunch, many year-end buyers needing bonus depreciation can’t afford that timeline.

How to Buy an Aircraft Quickly: Two Plays

 There are two potential plays—both somewhat risky—if you want to make a purchase before year-end while protecting the buyer.

 The best option is for your aircraft broker to find a plane with recently completed major maintenance (or nearing completion). While standard maintenance doesn’t cover all inspection tasks, most should be done.

Additional steps may include a logbook review for completeness and damage history, plus borescopes of engines and the APU. These checks aim to ensure no “significant findings” (e.g., items that would disqualify the aircraft from consideration).

The challenge: Most planes like this are already under contract.

The second play is to find a well-maintained plane and perform a limited inspection for “significant findings.” Both parties can then close the deal, leaving part of the seller’s proceeds in escrow (a “holdback”). This contemplates a full pre-purchase inspection in January, with the holdback paying for the “squawks” discovered and with remaining funds returned to a seller upon completion.

The risk: The holdback might fall short of repair costs, or the full inspection might reveal serious issues. Success depends on a well-crafted aircraft purchase agreement outlining both parties’ post-closing obligations.

While the ideal approach allows plenty of time for thoughtful due diligence, creativity is possible when the clock is running out. These risky plays aren’t for rookies or the faint of heart. Success demands a strong acquisition team, including a skilled broker and aviation attorney.

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This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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As year-end approaches, now’s the time to review your 2024 aircraft records. In doing so, you’ll ensure proper tax reporting of your aircraft activity.

The rules for deducting aircraft expenses are very specific and require detailed records and documentation. But this can be easily managed with the right planning and processes.

In late 2013, the IRS released the final regulations that govern how company provided business aircraft expenses can be deducted. Non-entertainment use of your aircraft is potentially deductible if the use is properly substantiated. 

Taxpayers are required to track the usage on a flight-by-flight, passenger-by-passenger basis. This means you must look at the primary purpose of each flight, but also the primary purpose of each passenger onboard. Having family and personal guests onboard business flights will likely impact the deductibility.

In addition, the IRS requires written, contemporaneous records to substantiate deductible aircraft use. Records can include emails, meeting minutes, agendas, calendar invites, social media posts, checklists, and pictures.

This documentation can be in the form of emails, meeting minutes, agendas, calendar invites, social media posts, check lists, pictures, etc. The information should be enough for an auditor to connect the dots and understand the purpose of your trip.

Every aircraft owner is different, and best practices can vary from owner to owner. It’s important to implement a process that works for your organization to ensure that the required information is being maintained without becoming overly cumbersome. 

The IRS has tightened up their audit processes for business aircraft. The good news is that we’re seeing a streamlined approach on recent audits. Now is the perfect time to review your records and get ready for tax season!

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Amid the hustle and bustle of the holiday season, it’s important to pause and recognize that this season itself is rooted in the spirit of gratitude. As we wrap-up another year I thought it fitting to look back and touch on three things I’m grateful for in the industry. 

First, I’m grateful that interest rates continue to normalize. In looking at the 10-year treasury as of this writing, it sits at 4.181%, which is down from 4.425% as of our last publication. We’ll dive into the subject of “the yield curve” in a future discussion but we’re starting to see the yield curve flatten, meaning shorter-term rates equal to or lower than longer term rates, which is the sign of a “normal” rate environment and “healthier” economy. 

Second, I’m grateful that the aircraft buying market has seemingly adapted to the current interest rate environment. While rates remain elevated compared to recent memory, we continue to see stable or increased loan demand and are hearing the same from peers. Even with interest rates where they are, it’s still a great time to consider financing. 

And speaking of peers, for my third gratitude, I’m grateful for our industry peers who specialize in aircraft lending. It’s clear through reviewing the data from FAA filings, these financial institutions remain engaged in the industry and appear to be positioned well for continued ability to serve the industry in 2024. It’s a reminder of the value of working with a financial institution who understands how to finance an aircraft, and something to keep in mind should you be exploring financing or refinancing. 

Looking forward, I think 2025 should bring some clarity on where rates, and the economy, go from here, and we’ll dive into that in our publications early next year. In the meantime, I hope you enjoy the rest of the holiday season!

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Thinking about entering into an aircraft lease agreement? You’re not alone—many aircraft owners wonder, "Can I lease my aircraft to others or third parties?" The answer is yes!

But, like any important decision, it comes with responsibilities. Specific insurance policy terms and exclusions need attention when setting up a Part 91 lease agreement.

Contact an Aviation Attorney

Before you proceed, consult an aviation-specific attorney. They can draft a formal dry lease agreement tailored to your specific needs. Aviation-specific law firms understand both insurance contracts and the Federal Aviation Regulations (FARs), ensuring full compliance with legal and insurance requirements.

Be sure to designate pilot services separately from the aircraft lease itself. These agreements must be structured correctly to comply with Part 91 regulations, keeping the operations fully legal and insured properly.

Involving Your Insurance Broker

After your attorney prepares the dry lease agreement, submit it to your insurance broker. They will then send it to the underwriter for review. Of note, not all carriers permit dry leasing, so informing your broker early helps avoid policy restrictions or potentially the inability for your insurer to allow adding a dry lease.

Underwriting and Policy Costs

Most insurers allow dry leases but may limit the number of lessees that can be added. All dry leases, when approved by the insurer, will be subject to flat fees, typically ranging from $1K-$5K per lease. Some adjust costs based on the flight hours planned by the lessee.

Liability & Coverage Considerations

Once approved, the lessee is added as an additional insured on the policy. Lessees may also consider excess liability policies for additional coverages over and above the lessor’s policy limits. Keep in mind, these can be costly and difficult to obtain.

Aircraft Lease Agreements: Protecting All Parties

Liability limits are shared between the lessor and lessee. Work with your insurance broker to ensure adequate coverage. The lessee should receive a certificate of insurance confirming additional insured status and relevant policy terms.

Conclusion

Entering an aircraft lease agreement requires careful planning, legal compliance and insurance coordination. Partnering with experienced aviation attorneys and insurance brokers can simplify the process and help secure the best terms.

Aviation entrepreneurs and high achievers are naturally talented at setting and achieving goals. But we also tend to neglect our self-care. We push forward. And as Aviation pioneer Otto Lilienthal put it, “Sacrifices must be made.” 

But what if you could prioritize both performance and our well-being?

This five-step annual review, inspired by Tiago Forte, helps you reflect on 2024 and charge into 2025 with purpose and energy. Following the article is a checklist to use to really get your juices flowing.

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1. Start with Gratitude

It all starts with gratitude. Want less stress and anxiety in your life? How about better sleep and heart health? Research shows practicing gratitude could be the way. 

By actively practicing the art of gratitude, you can transform your outlook and improve your well-being. It also reduces stress, enhances sleep and supports heart health.

Reflect on 2024 by listing everything you're grateful for—people, achievements, and experiences. Use your phone’s calendar and photos to jog your memory.

Aim for at least 100 items. High achievers often focus on shortcomings, overlooking accomplishments. This practice helps you see the true fullness of your year and fosters a sense of appreciation.

2. Conduct a “Hotwash” on 2024

Borrowing the concept from the Air Force, a “hotwash” is the immediate "after-action" discussion following an exercise, training session or major event. 

In the case of an annual review, this is your chance to review your wins, challenges and lessons while they’re fresh. A personal “hotwash” isn’t intense, but it’s impactful.

Identify three wins and the biggest lessons learned. Ask yourself: What worked? What didn’t? How can you improve? Then use these insights to sharpen your focus.

3. Visualize 2025

Dream big. Picture the year ahead like planning a dream vacation. Don’t get bogged down in details; focus on the experience.

What will make 2025 extraordinary? Imagine the sights, feelings and energy of your ideal year. Let curiosity guide your vision.

4. Set Your Intention

Henry Ford said it best: “Whether you think you can or you think you can’t—you’re right.” Set specific, actionable goals for next year.

Less is more. Narrow your focus to three priorities. When everything feels important, nothing gets done.

5. Take Action

Feeling inspired? Don’t stop now. Plans often fail when action isn’t taken. Overcome procrastination by scheduling the smallest next step.

Block time on your calendar. Progress happens one small, deliberate action at a time.

Bonus: Make It a Family Affair

Include your family in this process. My family and I have completed an annual review for nearly a decade. We gather, share our insights and have fun with music, snacks and laughter.

Last year, my kids even invited their friends! The shared experience fosters connection and sets a positive tone for the new year.

As you wrap up 2024, reflect with gratitude, set intentions and act boldly. Here’s to a successful and fulfilling 2025.

Annual Review

1. Gratitude List:

• What are the people, places, things and successes you’re grateful for in your life this year?

2. Hotwash 2024: 

• List your three top wins for the year.
• What are the biggest lessons you’ve learned this year?
• What risks did you take?
• What was your most loving act of service?
• What unfinished business do you have from this year?
• What are you most happy about completing?
• Who were the three people that had the greatest impact on your life this year?
• What was your biggest surprise?
• What compliment would you have liked to receive?
• What else do you need to do or say to feel complete with this year?
• What one word or phrase best sums up and describes your experience this year?
• What stories from last year are you letting go of?

3. Visualize 2025:

• What would make 2025 your best year ever?
• What new habits can you cultivate to achieve your goals?
• What bad habits can you remove to help you reach your goals?
• What are your immediate next steps to achieve these goals?
• What would you like to be your biggest win?
• What advice would you give yourself?
• What are you planning to do to improve your financial results?
• What are you most excited to learn?
• What do you think will be your biggest risk?
• Who or what, besides yourself, are you most committed to loving and serving?
• What about your work are you most committed to changing and improving?
• What undeveloped talent are you willing to explore?
• What brings you the most joy, and how will you do or have more of that?
• What one word or phrase would you like to have as your theme?

4. Set Your Intention:

• Add new goals and projects
  
  

5. Get Started: 

• Use a task tracker and your calendar to carve out the time for the next steps.

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The largest aircraft operators in fractional ownership, Netjets and Flexjet, have had incredible year-over-year growth. 

Just look at the data that comes out of Wing-X Advantage weekly bulletin to see their rapid growth since the pandemic. But why are more UHNWI and corporates choosing to go the fractional route as opposed to traditional aircraft ownership or charter?

Two key factors: simplicity and consistency.

I write a weekly newsletter on business aviation trends, where I explore the economics behind the various ways of flying private including charter, fractional and whole aircraft ownership. 

The feedback I get from many newsletter readers is that the attraction of fractional is the simplicity. They don’t want to go through the process of vetting a management company, hiring pilots or finding hard-to-find hangar space. It’s a hassle to get aircraft insurance and oversee maintenance. 

So why are these clients fractional ownership over charter–especially when charter ends up being relatively the same annual spend? 

It’s the consistency.

Fractional owners at NetJets, Flexjet, PlaneSense, and similar providers, know what to expect. The client knows the experience that they’re going to have in regards to safety, cleanliness and reliable scheduling. Ad-hoc charter lacks the same consistency because the operator can change with each trip, making the experience less predictable.

Fractional ownership offers simplicity, consistency and tax benefits not found in charter. But I’ll stay in my lane and let Angel explain the tax advantages.

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.

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This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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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.

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This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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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.