Three top trends in the use of business aircraft since the advent of Covid-19 were identified by Suzanne Meiners-Levy, managing partner with Advocate Consulting Legal Group, at Corporate Jet Investor’s fifteenth Town Hall online meeting yesterday (August 5th). The trends were: business aircraft carrying more passengers, the rise in new customers and growing interest in fractional schemes.
“We are seeing a lot of clients opening up their corporate aircraft to other key employees for travel, which we think is a positive thing,” Meiners-Levy told more than 300 delegates attending
“A lot of our aircraft used to fly [before Covid-19] with just the owner and a spouse or two high level executives on the aircraft, while staff would fly commercially,” said Meiners-Levy. “Folks are doing that less now, which means more passengers on a flight, which is positive from a tax perspective and we are seeing inquiries about that.”
Meiners-Levy also detected an increase in companies transporting elderly relatives on business jets, which had implications for fringe benefits and tax liability, she said.
Fringe benefits and tax liability
The second key trend was the growth in new customers for private aviation who were frustrated by the lack of opportunity for airline travel. “We are seeing more folks who have never owned [a private aircraft] before looking into fractional interests or co-ownership. They are watching as US commercial travel – especially into smaller markets – evaporates. The commercial airlines just can’t respond nearly as quickly or come back nearly as quickly [as business aviation].”
Before the Covid-19 crisis Advocate Consulting Legal Group was dealing with clients who were familiar with business aviation, the aircraft available and their capabilities. “Now, we are seeing a lot more clients who don’t know what type of aircraft it is and I explain to them the mission lengths of the different aircraft,” said Meiners-Levy. “So, we believe there’s going to be a long tail to these cancelled flights and cancelled routes particularly into smaller markets.”
The third trend was growing interest in fractional options compared with jet cards because of the tax advantage. “Jet card and fractional are both great ways to travel,” she said. “But there is a significant type of advantage over some types of ownership structure – if you have the ability to use tax deductions. And we’ve done that side-by-side financial [comparison] for many of our clients.
“When we look at a jet card next to a fractional ownership – depending on what their mission is and the ability to take a tax deduction – fractional becomes much more affordable.”
This Town Hall was sponsored by Echo Aviation Leasing Corporation.
Meanwhile, you can watch the hour-long online meeting here.
Three top trends in business aviation
Source: Suzanne Meiners-Levy (pictured below) at CJI’s Town Hall meeting.