Private Jet Tax - Market effect

So what are the potential ramifications associated with the introduction of a  Private Jet tax and will it have any major affect on the market?

In short no. As with all other costs associated with Private Jet charter, operators and brokers alike will factor in these costs whilst trying to absorb as much of the burden themselves to remain competitive. Essentially it will boil down to trimming already slim margins and pushing forward with a “business as usual” approach.

This strategy of ensuring that the wealthy do their fair share does however seem to be a victimisation of the very engine that drives wealth creation in the UK. There can be no doubt that travelling by private jet is a luxury, but let us also not forget that it is an essential tool used to create business opportunities across the globe. Let’s take for example an Oil exploration firm – at the core of this business is geography. This is not a backyard business by any means. As a firm you have to fly to sometimes hard to reach remote destinations in order to assess the viability of oil exploration in a region and subsequently to tie up the deal. This can involve senior members of a team out of the office travelling for, in some cases, days. In this instance the private jet is essential in cutting down this travel time and getting senior fee earners back into the office where they ultimately are at their most productive.

One should at this point remember that a good proportion of tax revenue and, in the case of listed companies, share revenue, is created by those that government seem hell bent on ensuring they “do their bit”. These are the very firms that long term provide value in our pension funds, dividend payments to private investors and bonuses that ultimately get spent in car showrooms, estate agents, clubs, bars, restaurants and shops. This is the only way that the money pumped into the banking sectors filters back through to people on the street. Private jets pay landing, engineering, insurance, catering, pilots and air traffic control fees. Not only does the core business generate income but so too does the business tool.

At Execflyer over the last 3 years, we saw a marked slow down in private jet travel in the corporate sector. Some of this was ultimately cost saving, though for the most part firms wanted to be seen to do the right thing. With the economy showing signs of recovery in some sectors, dealmakers are having to go the extra mile and get in front of clients across widespread geographic locations. Sometimes 3 or 4 cities are vistied in a day. The result of this “jetsetting” ultimately is deal conclusion, revenue and thus security for the hundreds/thoudands that make up the ranks of a particular firm. Then theres the tax revenue…..

To conclude, the “Learjet tax” as it has become affectionately  known, will do little to slow down the engine that needs to function in order to restore wealth across the UK. Lets allow these dealmakers within UK plc the tools to get each and every one of us back into a position of strength in this somewhat injured global economy. The wealthy are an essential fuel in this engine and we would all do well to recoginse the long term gain for bar staff, builders and car sales through to lawyers, architects and let us not forget the pilots.

$20 million to spend?

Recently released industry research across the private jet sector depicts the view that we are currently in a buyers market. Key factors driving this are the high levels of stock in the market, coupled with low demand for aircraft. As an example a Gulfstream V fetching $45 million in 2008 would now struggle to break the mid $20 million range today. Prices are continuing to fall though this price descent is slowing.

With many being forced to sell or handover their prized assets, investors are seizing their opportunity. In many cases prices of private jets have more than halved since 2008, as inventories of aircraft are now higher than ever before. With such low interest rates on borrowing and finance, clever investors will buy now and take advantage of this whilst the value of their aircraft grows ahead of inflation in the years to come.

So when the market picks up, who is going to buy these machines? Well, on the corporate side, it is estimated that the demand for private aircraft is two years behind the cycle of corporate earnings, meaning in the next year, the demand should begin to increase dramatically after the major collapse of the market just over a year ago.

Then there is the private wealth, primarily from Brazil, Russia, India and China, who seems to be producing the majority of new milli/billionaires. Increasingly these regions are the emerging private jet markets in the world. These developing countries will become hot spots for private aviation, possibly overtaking even the USA in both ownership and private jet charter.

All of these factors mean that the market, whilst not out of the low yet, is almost certain to get back up to, and possibly exceed the levels it was at pre crash, meaning high flying times for the private jet charter industry!

Execflyer's new empty leg page goes live!

Execflyer are pleased to announce that our brand new private jet empty legs page went live on our website today. This new feature allows clients to browse a comprehensive list of empty legs all over the world at reduced rates and in one place. These flights range from short hops on Citation Mustang’s, to transatlantic flights on Falcon 900’s and Global 5000’s. Empty legs are becoming more and more popular for both operators and clients, as Execflyer’s Jamie Dickson explains.

“With cost becoming a bigger factor in today’s market, many clients, especially those travelling for leisure are choosing to be flexible on their times and dates of travel to take advantage of the savings empty legs can provide. At Execflyer, we are witnessing a sharp rise in the number of people using empty legs to travel, hence why we have launched our new empty legs page, which allows for easy access to the latest, and most relevant empty legs available.”

When logging on to the page, clients are greeted with a list of the latest empty legs, detailing dates, destination and aircraft type, as well as the number of seats available. Clients then simply click for more information, and you will be sent details of the price, aircraft images, and any other information you require. We can also combine empty legs and live sectors in order to bring costs down on return trips.

To visit our new page, click on this link, or for any other air charter requests for helicopters or fixed wing, email us at fly@execflyer.com or call us on  +44(0) 1926 840057.