Historically, the fourth quarter has been the busiest period for aircraft transactions. However, 2025 is proving to be an exception. The surge in activity has begun unusually early, with August already showing signs of the traditional fourth-quarter rush. The shift is not coincidental – it is the result of several converging factors that have created a sense of urgency among buyers. Chief among these are the reinstatement of 100% bonus depreciation under the One Big Beautiful Bill Act (OBBBA), labor shortages affecting inspection availability, and ongoing uncertainty surrounding aircraft tariffs.
The OBBBA permanently reinstates 100% bonus depreciation for qualified property placed into service after January 19, 2025 under Section 168(k). This applies to new and pre-owned aircraft, provided they are predominantly used in the United States for qualified business purposes. It is important when establishing the aircraft ownership and operating structure to avoid related party leases or personal use, which can limit qualified business use. This means businesses can deduct the entire purchase price of an eligible aircraft in the year it is placed into service.
Many potential aircraft buyers were waiting to see if bonus depreciation was going to return to 100% this year, as it was in the process of being phased down to 40% under the Tax Cuts and Job Act of 2017. Now that bonus depreciation is back at 100% many buyers who were waiting are now very active in the market.
The newly motivated buyers are learning that aircraft transactions have become more complicated for several reasons. First, there continue to be increasing labor shortages at the service centers that provide pre-purchase inspections. Obtaining a slot in August is not usually challenging but we are currently seeing pre-purchase inspections being booked out by a month or more. There are more transactions and fewer people to do the work which is increasing the wait time for an inspection slot.
Second, compounding the issue is the fluid nature of international tariffs, which require careful analysis for each transaction. If the aircraft was manufactured in the United States and was always based and flown in the United States, then tariffs should not be a concern. However, aircraft manufactured, based, or modified outside of the United States may be subject to tariffs, adding complexity and potential cost to the buying process.
Given these factors, industry professionals – including lenders, attorneys and brokers – are advising buyers to begin the acquisition process immediately if they intend to place an aircraft into service in 2025 and benefit from bonus depreciation. The earlier than usual spike in transactions is a signal to gather a team to start the transaction now. Read more in my previous article:
https://soaraviationlaw.com/aircraft-acquisition-it-takes-the-right-team/