Flip your jet!
The price of ownership in a fractional jet is based, among other factors, on the purchase price of the specific jet from its manufacturer. Unfortunately for those considering private travel, share prices could increase due to “flipping.”As explained in the Financial Post, flipping is a “grey market” in the corporate jet industry, stemming from an imbalance in supply and demand for the aircraft. Given the current host of commercial airline troubles, it’s no surprise that many travelers are choosing the private route. But manufacturers can’t keep up with the growing demand. Sean Silcoff reports that “billings and deliveries rose by 22% annually, on average, over the past four years…” And there is no decline in sight for the private jet business. The end result? Most buyers are now on a two- to four-year wait list.
So what comes next in a free market economy? Well, those who are higher up on the waiting lists are selling their undelivered jets to those lower on the lists, and they are profiting millions.
How will the flipping of new private jets affect fractional air travel and ownership? Maybe not at all. But others fear the practice might “destabilize prices and take control away from manufacturers” and that it is “unhealthy for our industry.” Time will tell. The moral of the story appears to be: if you’re not in line yet, you best get there soon.
