How the OBBBA Is reshaping the private aircraft market and why Q4 2025 was unlike anything before
This article is contributed content from Mark Bearden, senior vice president at First American Equipment Finance.
Yearend acceleration is nothing new in private aviation. Buyers routinely aim to close transactions before December 31st. But Q4 2025 broke from historical patterns.
The passage of the One Big Beautiful Bill Act (OBBBA) – which restored 100% bonus depreciation for qualifying assets, including aircraft, acquired and placed in service after January 19, 2025 – contributed to a significant year-end surge in demand. The result was not simply more transactions, but a meaningful shift in valuations, lender behaviour, and ownership decisions across the market.
While activity remained strong through the summer and early fall, the full impact of the OBBBA did not materialise until November and December. What followed was an intense concentration of deals that altered the market’s tone and valuations heading into 2026.
Why the OBBBA Sparked a Year-End Frenzy
The reinstatement of 100% bonus depreciation under IRC §168(k) created one of the most favourable tax environments aircraft buyers have seen in years. For high-net-worth individuals and businesses with clear visibility into year-end taxable income, the OBBBA made aircraft acquisition significantly more compelling – particularly where timing was critical.
Assets placed into service before year-end 2025 qualified for a 2025 tax deduction, while those closing in early 2026 shifted the benefit into the following tax year. For many buyers, that one-year deferral in tax benefit timing meaningfully impacted cash flow and helped to drive urgency in Q4.
As a result, many transactions were influenced less by underlying aircraft fundamentals and more by the tax shelter an aircraft could provide. In this bonus depreciation environment, buyers became less price sensitive when anticipated tax savings helped to offset near-term market premiums.
What Is Driving Valuations Higher
OBBBA-driven activity had an immediate impact on fair market values, particularly for newer and in-demand large-cabin aircraft. Dealer-reported data from Q4 2025 showed firmer pricing, fewer discounts, and tight inventory driven by tax-motivated year-end demand.
“This wasn’t an isolated experience,” said Mark Bearden, senior vice president at First American Equipment Finance (pictured right). “December activity wasn’t just about transactions – it was about the ripple effects those transactions had on valuations, loan structures, and seller expectations.”
It’s worth noting that OBBBA was not the only force driving values higher. The surge in private aviation demand that began during COVID has never fully receded, and supply has struggled to keep pace – major OEMs are booked well into 2030 for large-cabin deliveries, continuing to pressure used market values upward.
Key Market Dynamics in Q4 2025
1. Lenders Expanded Financing Capacity
As valuations increased, lendable values rose alongside them, allowing financing providers to support larger loan amounts through flexible aircraft financing structures – often materially higher than prior quarters.
2. Sellers Gained Pricing Power
Tax-motivated buyers, who may be less sensitive to price, enabled sellers to command higher values. Many buyers also anticipated operating in a higher-priced market when upgrading, reinforcing elevated pricing expectations. The combination of strong demand and refreshed comparables shifted leverage decisively toward sellers.
3. Ownership Gained Ground over Leasing
Leasing aircraft has historically appealed to buyers seeking to minimise upfront capital requirements. With the return of 100% bonus depreciation, however, the effective upfront capital required for both full and fractional aircraft purchases narrowed, as tax benefits could meaningfully offset initial equity requirements.
As a result, ownership-based strategies gained ground over leasing, particularly for buyers with sufficient taxable income. In many cases, financing an aircraft purchase became a more attractive alternative to leasing once tax advantages and loan structures were considered, though outcomes remained highly situation-dependent. Notably, both full and fractional ownership saw strong demand in Q4, reflecting a broader market shift toward ownership structures able to capture the full benefit of bonus depreciation.
What This Means for 2026 and Beyond
The OBBBA meaningfully influenced aircraft buyer decisions. With bonus depreciation restored under current law, aircraft acquisition increasingly functions not just as a transportation decision, but as part of broader tax planning.
The impact of 100% expensing is likely to continue influencing:
- Fleet acquisition strategies
- Upgrade and refurbishment decisions
- Lending and underwriting practices
- Secondary-market valuations
- Lease vs. loan considerations
Q4 2025 was more than a busy season. It served as a clear example of how tax policy can rapidly reshape an entire asset class. In private aviation, the takeaway is familiar but newly reinforced: incentives drive behavior—and when incentives are this powerful, markets can take off.
Disclaimer: The content of this article is intended to provide a general guidance to the subject matter and should not be construed as an advice. The views of the authors are personal. Specialist advice should be sought in case of specific circumstances.
