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Understanding the depreciation of private jets is crucial for owners who want to manage their investments wisely. Similar to cars and other machinery, private jets lose value over time, starting from their first use. This depreciation means that owners are unlikely to recoup their initial investment when they choose to sell the aircraft.
The value of a business jet is influenced by several factors, such as age, make, model, maintenance records, and usage cycles. Business jets typically experience rapid depreciation in the initial years. Smaller jets drop about 20% in value within the first five years of service, while large and long-range jets can lose 20% to 25% of their value in the same period.
"An older aircraft with high hours and obsolete technology will have depreciated significantly and be valued at less than newer models - or even models of the same age with fewer cycles or hours," notes Aircraft Exchange. Furthermore, "small business jets depreciate by about 23 to 25 percent, while large or long-range business jets depreciate by 26 percent" over the first five years, with depreciation rates slowing down subsequently.
