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Fri, Sep 23, 2016

Study: CFOs Need Up To $178 Billion To Finance New Business Aircraft

New Report Suggests Worldwide Demand For 5,400 Business Aircraft Through 2025

New analysis from Global Jet Capital, a global provider of financing solutions for private aircraft, suggests that between now and 2025, companies around the world could take delivery of as many as 5,400 business jets, and up to $178 billion to fund them.

In terms of how the findings break down between publicly listed companies and privately owned ones, it estimates that public companies could acquire 1,617 aircraft costing approximately $85.2 billion. The corresponding figures for private companies are 3,799 and $92.5 billion respectively. 
 
Global Jet Capital, which has over $1 billion to lend to clients purchasing business jets, says the bulk of these purchases will be based on leases and loans. The company currently finances over 200 business aircraft for clients.
 
Dave Labrozzi, Chief Operating Officer of Global Jet Capital, said: “There is often misperception in that high net worth individuals and corporations mostly pay in cash for large private aircraft. 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.”

“Funding the acquisition of a new or pre-owned jet with cash is 100-percent equity financing – equity capital that the individual or corporation could use to make other investments. Many conclude that the investment in their business is probably a better bet than buying into an asset that will likely lose value each year. The decision that most businesses reach is that it’s most efficient to use third-party capital to fully or partially fund the acquisition of the private aircraft they wish to use.

(Source: Global Jet Capital news release)

FMI: White Paper

 


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