00:45:31 · Israel Slodowitz
[00:45:31] S0: Like, the the the line to get a to to get to get into, an aircraft is maybe two, three years ahead of time. If you wanted to order a plane right now, a brand new plane from Bombardier, they'll probably take you three to four years until, like, I think they're delivering now into 2030. Right? You can always find like, you can actually buy a slot from somebody. So somebody else who got was in line, people are actually, like, reselling these slots because people want, like, planes sooner. So there's already, like, a huge, huge demand for these aircraft, and we are seeing the market price of them trade a little higher over time. But again, like, at the end of the day, they do depreciate. It's not the air aircraft are not like real estate. Right? They do depreciate over time. They get wear and tear, they get fatigue, and then at some point there's a newer airplane with a better a better like sound system or something that you know that people like and and zero windows. Zero windows. Yeah. And over time, the value of the airplanes will go down. But we have been seeing in the last couple of years, like, very weird phenomenon where the price like, we bought this airplane, and now it's worth, more than we paid for it. Really? Yeah. Like, almost $2,000,000 more. What? Yeah. Why? Just because there's like such a lack of, of supply, like of of good airplanes. That's crazy. Yes. Another thing that's worth talking about is like there's just different types of aircraft are some are better than others. Right? So like people think, okay, I'm gonna buy this airplane. It's cheaper, but we're on like the Challenger three fifty. This is like one of the most sought after. But this is the first airplane when I started my company seven years ago. I started with the Challenger 300 and we still have that Challenger in our fleet today flying just as much as it was flying back then. Certain airplanes are have better, like, parts availability, better pilot training, engines if you need, like, if you need to put on rental engines on the plane. So it does matter what type of aircraft you buy, especially if you think you're gonna start flying, like, heavy volume.
00:47:25 · Molly O'Shea, Israel Slodowitz
[00:47:25] S1: Have you seen people make the wrong decision in buying a plane by buying too small of a plane? Like, at what point do you realize that? Yeah. So I know the trend now is buying heavy and and buying really large, but do you see like, you obviously come across people extremely wealthy that probably buy tiny planes too, and you're like, what are you doing? [00:47:46] S0: So so I I know someone who, who just recently had a liquidity event, and he exited about 500,000,000. And he decided first thing he's gonna do is spend 400 k on a global 8,000 or 7,500, charter to Europe, you know, and he and he, and so so, you know, he he he he spent 400 k, but 400 k is still significantly less than 75,000,000, which is what it would cost to buy that plane. Right? And he flew did a flight, and and he's like, you know, that was nice, but I don't know if I need this airplane. Like, maybe maybe I'll I'll get, like, I'll go one step down. So my advice to people is really maybe charter a couple times the plane you think you might want to see if it's really what you want because the cost to have to, buy a plane and realize it's too small or too big and then you have to sell it could be very expensive. It's much cheaper to charter a couple times, see how it goes, and, and then if you like it and you really wanna buy the plane, you can buy the plane. [00:48:44] S1: We haven't talked about this yet, but it's a huge deal. Actually a very big, beautiful deal, the big, beautiful bill. Can you talk about I think they renamed it. Did they really?
00:48:44 · Molly O'Shea, Israel Slodowitz
[00:48:44] S1: We haven't talked about this yet, but it's a huge deal. Actually a very big, beautiful deal, the big, beautiful bill. Can you talk about I think they renamed it. Did they really? [00:48:55] S0: I think so. I don't know what they renamed it. [00:48:56] S1: Well, that's what I know. [00:48:57] S0: Too. Yeah. [00:48:58] S1: Yeah. But can you [00:48:59] S0: talk about how the government is now helping helping write off aviation? It's really, writing it off in a huge way. The big beautiful bill is not the first time we've seen this. In 2017, Trump announced the Tax Cuts and Jobs Act, which was the first bill that introduced bonus depreciation. And then it phased down over time, and it was reintroduced in 2025 with a big beautiful bill. But essentially, what bonus depreciation is is it allows you to expense the entire value of the plane the year you buy it. So if you buy a $10,000,000 airplane, you could take a $10,000,000 business deduction the year you bought the plane, even if you financed 80% of it. So maybe you only put down $2,000,000 on the airplane. You get to take a $10,000,000 expense in your business. And if you're in California and your income is 51% My ears popped. Yeah. We're we're we're in our descent to San Francisco. If you're in California and you're paying 51% taxes, right? You're essentially rather than paying the government 5,000,000 in taxes, you can buy a $10,000,000 airplane, put down 2,000,000, reinvest the other three. So this is like, as you can imagine, a huge unlock for people.
00:48:59 · Israel Slodowitz, Molly O'Shea
[00:48:59] S0: talk about how the government is now helping helping write off aviation? It's really, writing it off in a huge way. The big beautiful bill is not the first time we've seen this. In 2017, Trump announced the Tax Cuts and Jobs Act, which was the first bill that introduced bonus depreciation. And then it phased down over time, and it was reintroduced in 2025 with a big beautiful bill. But essentially, what bonus depreciation is is it allows you to expense the entire value of the plane the year you buy it. So if you buy a $10,000,000 airplane, you could take a $10,000,000 business deduction the year you bought the plane, even if you financed 80% of it. So maybe you only put down $2,000,000 on the airplane. You get to take a $10,000,000 expense in your business. And if you're in California and your income is 51% My ears popped. Yeah. We're we're we're in our descent to San Francisco. If you're in California and you're paying 51% taxes, right? You're essentially rather than paying the government 5,000,000 in taxes, you can buy a $10,000,000 airplane, put down 2,000,000, reinvest the other three. So this is like, as you can imagine, a huge unlock for people. [00:50:22] S1: So this is why people are buying $75,000,000 airplane?
00:50:25 · Israel Slodowitz
[00:50:25] S0: That's exactly why people buy something. There's no other good reason. That's amazing. Yeah. The the only thing is that it does need to be used in a true business purpose. You have to have a defensible business purpose for the plane, and you have to use it 51% or more in business use. Now, this brings up a very interesting conversation because most of the liquidity and the wealth being created today, specifically with the SpaceX IPO, right, and in the tech world is not from people who have businesses. These are employees at companies that have been working their their whole life. They they skipped, like, five steps in the wealth in the wealth generation phase, and now they wanna start flying private, but they don't have a legitimate business to run their aircraft through. Right? And on top of that, they're also most of their wealth is in the stock market, which is capital tax capital gains, which even if you had a biz a legitimate business purpose to buy the plane to to write off a plane against, you would only be writing off if you write off if you write off your capital gains, when you sell the plane, you have to pay something called recapture. And recapture is where you basically have to tell the government, now I sold the plane and repay the taxes on whatever you sold the plane for because because you told the government it was worth zero when you when you initially bought it. Recapture is always taxed at ordinary income So if you buy an airplane and try to offset capital gains, right, which is like, let's say your SpaceX shares, and then you sell it five years later and you recapture at ordinary income, you're essentially taking a very high interest loan from the government. You saved some tax today, but you paid way more taxes when you sold it. So this so I I think there this is gonna be a big headwind for this new era, this new generation of wealth and the current model, the traditional fractional ownership models. I think this is gonna be a big headwind because it the current structure does not quite fit this type of consumer.
00:52:46 · Molly O'Shea, Israel Slodowitz
[00:52:46] S1: What kind of background checks do you need [00:52:48] S0: to do with new clients, new flyers? Well, when we when when whenever we, fly someone on an airplane, when they go through standard, like, TSA, we run their name against, like, the no fly list. If you're gonna buy a plane, you're gonna get a loan. There's gonna be like KYC and AML. So like standard, like no no different than if you were opening a bank account. [00:53:08] S1: Mhmm. But that's really it. Did you see the mister beast winner who got caught smuggling drugs on his plane? [00:53:16] S0: I saw that. That was pretty ridiculous. [00:53:17] S1: What well, it was like how does anybody know? [00:53:20] S0: On the plane that he won, or was it on a different plane? [00:53:22] S1: I think it was on the plane that he won. I would imagine. [00:53:26] S0: Yeah. [00:53:27] S1: That's crazy. Well, like I said, when you [00:53:29] S0: buy an airplane, buying the plane is the cheapest part of the equation. You have to maintain it. So maybe maybe he needed some cash flow to keep it going. [00:53:36] S1: Maybe that's what incentivized him to get the plane in the first place. Maybe he had a big mission ahead of him, and he it was his job to win the mister beast contest in order to complete the mission. [00:53:45] S0: Yeah. I think, like, every once in a while, you see these these things, but that that was that that was pretty crazy when I heard that that story. [00:53:50] S1: It was pretty wild. How long do you think it would take to sell a jet today? [00:53:55] S0: I've seen as quick as one hour.