Moderate Focus on Corporate Aviation...its "valuability"

I believe Corporate Aviation is important for those who run businesses that generates a great deal of income and in need for transportation of products and CEO's.  However, in an economy perspective, its not that important; due to the fact that its costly to run business aviation around the globe and may cause some type of debt with the general public (taxpayers). Corporate Aviation fits the transportation needs of corporations or businesses who desire to have their own personal air transportation, and not rely on the airlines to provide their air transportation needs.  Keep in mind that corporate aviation allows company executives or personnel to travel when they need to, and not be reliant on the airline scheduling system.  So, corporate aviation means efficiency.  It’s expensive efficiency, yet when time equates money, corporate aviation allows access to thousands of airports unserved by the airline system.  It puts company personnel very close to the target zone of their customers, or business enterprise.

Obama has made a great point when stating that corporate jet owners should not get a tax break and should proceed paying current or higher taxes.  Its obvious that if owning a jet, you are considered wealthy to not even complain about paying taxes.  President Barack Obama’s broadside against giving corporate jet owners a tax break scored him some populist points while potentially saving taxpayers $3 billion over the next decade (Stone, 2011).  I say that saving taxpayers money is what gave Obama more attention in the U.S. from his fellow Americans within the last few years; not just in corporate aviation.

Accelerated depreciation plays a big role for fixed assets.  Any method of depreciation used for tax purposes that alows greater deductions in earlier years of the life of an asset will be considered an acceleration of depreciation.  For example, President Obama signed a bill–the American Taxpayer Relief Act of 2012 that extends the 50-percent accelerated depreciation for capital goods, notably including business aircraft, through the end of this year. According to NBAA, this means that, in general, new business aircraft purchased this year are eligible to qualify for 50-percent “bonus” depreciation (Trautvetter, 2013). 

"Accelerated depreciation has consistently proved to stimulate sales in difficult economic conditions,” NBAA president and CEO Ed Bolen noted. “Given the current marketing environment, we view the continuation of accelerated depreciation as an effective sales incentive."

With all this being considered, corporate aviation is still beneficial for businesses/companies who utilizes it even if it does require higher tax pay.  Studies have found that businesses which use business aviation as a solution to some of their transportation challenges return more to shareholders than companies in the same industry that do not utilize business aviation (No Plane No Gain, 2013).  As mention before, the vast majority of companies utilizing corporate aviation-85%- are small and mid-size businesses, many of which are based in the dozens of markets across the country where the airlines have reduced or eliminated service.  In all, it definitely serves its purpose.

Sources:

No Plane No Gain.  (2013, February 11).  Why companies utilize business aviation.  Retrieved from:  http://www.noplanenogain.org/Advocacy_Tools.htm?m=47&s=407

Stone, D.  (2011, June 30).  Obamas privaate jet-offensive.  Retrieved from: http://www.thedailybeast.com/articles/2011/06/30/obama-spars-with-corporate-jet-owners-over-tax-breaks.html

Trautvetter, C.  (2013, January 8).  U.S. extends bonus depreciation for business aircraft.  Retrieved from:  http://www.ainonline.com/aviation-news/ainalerts/2013-01-08/us-extends-bonus-depreciation-business-aircraft