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.
00:53:55 · Israel Slodowitz, Molly O'Shea
[00:53:55] S0: I've seen as quick as one hour. [00:54:00] S1: One hour? Yeah. [00:54:01] S0: There was g six fifty that just sold in one hour. To who? They hit the market, and then it just sold an hour later. I'm I have no idea. [00:54:06] S1: Where's the market? What's the market? [00:54:08] S0: There's there's a Is there [00:54:09] S1: an auction? Is there, a Sotheby's [00:54:10] S0: or planes? Brokers, and they they talk to each other. And yeah. So, I mean, we're we're seeing, like, stuff as short as one hour. And then, like, sometimes if it's a bad airplane, it could take six months. But it's a [00:54:21] S1: pretty it's a pretty liquid market today. Damn. Okay. I'm really curious about this. I fly a lot. Is it true that if you fly private, you have less jet lag?
00:54:31 · Israel Slodowitz
[00:54:31] S0: I think the best benchmark in the commercial space is the, Boeing seven eighty seven, and the Boeing seven eighty seven has a cabin altitude of just under 8,000 feet. If you looked at the sort of the best example in the private jet market, like the Global 7,500, that has a cabin altitude of about 3,100 feet. What does that mean? So it means that you're you're, the the altitude that it feels like you're at when you're flying is significantly lower Oh, wow. Than on the commercial airline, which makes a big difference for fatigue. So I actually think, this is the one area that actually, especially on long missions, can make a very big difference. If you're going if you're flying somewhere for a business meeting and and you you don't wanna be groggy the whole day and then on the way back, having, like, a cab out and there's all sorts of cool things happening right now. We're seeing airplanes that have, circadian rhythm lighting. So they'll actually you you you program the your your destination, and it'll figure out, you know, where you are, where your destination is, and it will change the lighting, careful lighting around the time of day so that you can adjust your body. So maybe we don't need windows in aircraft as long as the as long as the lighting adjusts. But, yeah, there's all sorts of interesting things that could happen that do make a difference on long trips, especially if you're flying a lot and you're high functioning person like Elon Musk or Jensen, you need to be places.
00:55:54 · Molly O'Shea, Israel Slodowitz
[00:55:54] S1: I genuinely, like, I get jet lag from flying LA to New York. I did it back to back for two weeks. And then after that, I was like, I need an IV. [00:56:03] S0: Yeah. Yeah. And then [00:56:04] S1: I ended up in the hospital. [00:56:05] S0: Do you do a lie flat? [00:56:07] S1: Sometimes. Yeah. If I can afford [00:56:09] S0: it. Uh-huh. [00:56:10] S1: But what what is surprising to me is I will get so jet lagged from that, doing that twice a week. And then sometimes I'll go to San Francisco in between, and then I'm completely dead. And then you see videos of Jensen Huang. He's in San Francisco one day. He's in Taiwan the next. He's in China. He's in DC. Like, he is all over the place. It's crazy. What is the secret? [00:56:34] S0: Well, I mean, I think, he's an incredible he's an incredible entrepreneur and founder and business leader. But, no, I think you're obviously running a business, and you could see the difference between, like, losing losing days. Right? And I think that's why private innovation is really such a tool that allows you to do so much more and unlock so much more and really save days, full days that otherwise you would have been sleeping or groggy because you got stuck in the system. It's really an incredible, I think, some ways, non negotiable tool.