Air France pilots on September 15 launched a week-long strike, forcing the airline to cancel 52 percent of its flights. The point of contention centers on Air France’s stated plans to shift more capacity to its low-fare Transavia subsidiary, whose pilots work for significantly less pay than those of the main airline.
Tax laws that affect business aircraft owners are constantly changing, and a new law this year makes the process of complying with these tax laws even more complex. Dean Sonderegger, director of product management at Bloomberg BNA Software, explained the new law and how his company’s software helps owners keep track of tax implications to ensure that they meet the legal requirements and don’t pay more tax than is necessary.
Revenue at Berkshire Hathaway’s service business, which includes NetJets and FlightSafety International, rose by $507 million, to $4.9 billion, during the first half of the year, while profits climbed by $72 million, to $605 million. NetJets accounted for nearly a third of this revenue increase, thanks to higher flight services revenue attributable to more flight hours, as well as better rates and product mix changes. FlightSafety’s revenue also climbed due to increased simulator training activity.
Last Thursday, the House Ways and Means Committee approved H.R.4718, a bill that would make accelerated, or bonus, depreciation permanent. If passed, this would allow for 50 percent of costs for new investments in equipment and software–a list that includes such things as business jets–to be written off in the first year. More than 150 groups, including NBAA and NATA, supported the legislation.
NBAA and more than 150 other associations and coalitions sent a letter last week to the U.S. Senate urging swift passage of a bill to restore tax incentives that expired last year, including accelerated depreciation on purchases of long-term capital assets such as business aircraft.
On May 2, NBAA is holding its one-day Business Aviation Tax Seminar at the Hilton San Francisco Financial District. The seminar begins at 8 a.m. Among the subjects to be covered are two key tax issues for business aircraft operators: the application of the federal excise tax (FET) to managed aircraft flying under Part 91; and “Federal Audit Traps and Solutions for Aircraft Leasing Structures.”
CHC Group is going public and has begun an initial public offering (IPO) of 29,412,000 of its ordinary shares. The company, parent of CHC Helicopter, will make all of these shares available in the IPO, which is expected to price at $16 to $18 per share. If the underwriters sell more than the allotted shares, they will be able to buy up to 4,411,800 additional ordinary shares at the IPO price, less underwriting discounts, according to CHC. The company’s symbol on the New York Stock Exchange will be HELI.
As most NBAA attendees will attest, the safe and legal operation of an aircraft is a complex task. With a seemingly endless list of agencies to answer to, it is all too easy for something to fall through the cracks. Aviation law specialist Advocate Consulting Legal Group (Booth No. C9314) assists its clients in developing and implementing entity structures and contractual arrangements to maximize tax savings, while complying with FAA, DOT and state regulatory requirements.
Macquarie Infrastructure, the parent company of Atlantic Aviation, announced its first-quarter financial results last week, posting a 3.2-percent increase in Atlantic’s GA jet fuel sales on a same-store basis, over the opening quarter of last year. The chain’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 6.9 percent year-over-year. Macquarie expects to complete refinancing of Atlantic’s long-term debt this month, a move the company expects will give it more resiliency in case of another downturn in GA activity.
NBAA president and CEO Ed Bolen gave a big thumbs down yesterday to legislation sponsored by Sen. Kirsten Gillibrand (D-N.Y.) “that would single out one industry, general aviation, for a change in its established depreciation schedule.” Gillibrand’s proposal would extend the current five-year tax-depreciation schedule for general aviation aircraft to seven years.
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