US president’s tax cuts prompt increase in prices for most sought-after models

Second-hand private jet market boosted by Donald Trump

Tax changes by US president Donald Trump have halted a decade of price falls for the most popular models of secondhand private jets.

The average price of the 13 most sought-after models has increased 2 per cent to $6.4m compared with last year, according to an annual study by Colibri Aircraft, which specialises in the marketing and resale of private jets.

These models included the Falcon 7X (up 11 per cent to $25m), the Gulfstream G550 (down 1 per cent to $23.1m) and the Challenger 605 (up 30 per cent to $13.1m).

Oliver Stone, managing director of Colibri, said it was “a significant rebound”, which he attributed to a tax change introduced by Mr Trump after years of declining prices.

This allows taxpayers to immediately take as a tax deduction 100 per cent of the cost of new and second

hand aircraft bought between 2017 and 2027.

The average price of these 13 models fell 15 per cent in 2017 and 21 per cent in 2018, according to Colibri’s earlier studies.

However, according to other data, average prices in the broader second-hand jet market are still below levels a decade ago in the wake of the global financial crisis, which undermined the market.

Amstat, a business aviation data service, showed the average asking price of a second-hand private jet had fallen a fifth from $5.3m in 2010 to $4.2m in 2019.

Chris Miller, managing partner of Shearwater Aero Capital, which finances business aviation transactions, agreed that the average increase in prices in Colibri’s study was due to the Trump tax cuts and to a more buoyant US economy in general.

But he added that the tax relief would only provide a short-term bounce: “I believe the effect of these changes has stabilised and we will start to see more normalised depreciation in pre-owned aircraft in the next 12 to 24 months.”

John Matthews of private jet operator Airx said there might have been a slight uptick in particular types of plane, but said there had not been a broad rebound in the market.

“The price of used aircraft is still depreciating at the low end of $250,000 a quarter; at the high end, it’s depreciating $1.7m a quarter, which is the highest we’ve ever seen.”

Adam Twidell of Privatefly, a jet charter company, said the uptick was against the trend: “Over the past 10 years it hasn’t got easier for [sales brokers] and this year is as hard as previous years.”

The Colibri study took in 300 aircraft in total, which is 14 per cent of the market. There were 2,200 second-hand aircraft for sale at the end of March 2019, Amstat data showed.