Good for business

Buying an airplane might be the solution

September 29, 2022 By Adam Meredith

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Purchasing an airplane is about utilization and the mission. That goes for business as well as personal flying—business owners who fly to locations easily accessible by commercial-service airports might not need a company aircraft, but others need to fly to multiple locations not easily reached by airline. For them, a business aircraft might be the solution.

As a rule of thumb, pilots who are contemplating charter or private flying more than 50 hours a year will find it worthwhile to consider aircraft ownership. Business owners who need to fly to multiple locations over a short period of time, may find that purchasing an aircraft gives them the efficiency and flexibility they need.

The right aircraft will fit both your mission and your budget. A Cirrus SR22 might work for a real estate company with a budget of half a million dollars and multiple locations relatively closely spaced, for instance; but longer legs between destinations may warrant a step up to a turboprop. When choosing an aircraft, consider your typical leg and how much flexibility you have in timing.

Consider the mission, but know that missions change. First-time buyers often go in with the notion that they’re going to keep an airplane for 20 years, but we see pilots buying an airplane, keeping it for three or four years, and moving on to an airplane that better suits their mission. As long as you don’t buy an obscure airplane, it will be relatively easy to sell your airplane when the time comes.

Before you buy, work with a tax professional to understand your tax needs and the best business arrangement for ownership—for instance, whether the airplane will be under the name of the business or a separate business with a leaseback agreement. You may be able to take advantage of 100 percent bonus depreciation through the end of 2022. Next year bonus depreciation will drop to 80 percent.

Financing is relatively straightforward if you’re the sole owner of the business, but it may be complicated if you’re working with a partner who either doesn’t want to be part of the transaction or pays cash for his or her portion of the purchase. Many banks will want the other owner to be a guarantor or acknowledge the bank’s interest as first lienholder of the aircraft.

AOPA Finance representatives can help you work through the specifics of your situation.

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Adam Meredith

President of AOPA Aviation Finance Company

Adam Meredith, the longtime president of AOPA Aviation Finance Co., died after a long battle with cancer in December 2023. He is remembered for his passion for helping fellow pilots, leading a team devoted to putting flight training and aircraft ownership within everyone’s reach.

Go to Adam Meredith's Profile

Aero Space Reports

Sponsor of Aviation Finance

Aero-Space Reports, a third-generation family-owned business, has been a leader in the aviation title industry for more than 45 years. In that time, they’ve seen tens of thousands of aircraft purchases: They’re all too familiar with what can go wrong, and they know exactly what it takes for things to go right.