New analysis from Global Jet Capital suggests that between now and 2025, 146 mid to large private jets worth as much as £5.7 billion ($6.08 billion) could be needed in the UK.
The aircraft financing provider estimated that 30 could be bought by British public companies, 68 by private enterprises and 48 by individuals.
Global Jet Capital, which has more than $1 billion (£794 million) to lend to clients purchasing mid to heavy business jets, also said the bulk of these purchases will be based on leases and loans. The company currently finances more 200 business aircraft for clients.
“There is often a misperception 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,” said Dave Labrozzi, chief operating officer of Global Jet Capital. “Funding the acquisition of a new or pre-owned jet with cash is 100% 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.”
Global Jet Capital produced a whitepaper on the options open to those looking to fund the purchase of a business aircraft, and the advantages and disadvantages of each.
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