In the wake of the economic downturn, business boomed for
In the wake of the economic downturn, business boomed for aircraft repo specialists, who seized aircraft from owners delinquent on their loans. Yet repos have had no effect on the charter market, which depends on privately owned aircraft for the majority of its lift. Why no ripple effect? Many banks are reluctant to make loans on aircraft used for charter in the first place, because of the increased wear and tear on the asset, and concern that an owner could be depending on charter revenue to make payments.
“Our client base, both corporate and individual, rarely uses its aircraft for supplemental charter,” said Michael Amalfitano, senior managing director of Banc of America Leasing–global corporate aircraft finance. “This is to maintain the appropriate tax treatment of the business use of the aircraft.”
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