Up to $178 billion in financing will be needed to fund the 5,400 business jets expected to be delivered to companies over the next 10 years, according to Global Jet Capital. The company estimates that public companies could acquire 1,617 aircraft worth approximately $85.2 billion between now and 2025, while private companies are anticipated to take delivery of 3,799 jets worth $92.5 billion during that period.
“There is often misperception that high-net-worth individuals and corporations mostly pay in cash for large private aircraft,” said Global Jet Capital COO Dave Labrozzi. “Even if the cash resources are at hand, often the preferred approach is to lease or finance assets of this nature. If a new or pre-owned aircraft is acquired for cash, costing tens of millions of dollars, that’s a lot of capital tied up in an asset that typically depreciates. The decision that most businesses reach is that it’s more efficient to use third-party capital to fund the acquisition fully or partially.”
Global Jet Capital, which says it has $1 billion on hand to lend to clients purchasing business jets, noted that the bulk of these purchases will use leases and loans. The company currently finances 200 business aircraft for clients.