Business Aviation 3Q 2025: Full Bonus Depreciation Sparks Demand and Reignites the Global Market

The third quarter of 2025 unfolded with a noticeable shift in tone across the business aviation landscape. The reinstatement of 100% bonus depreciation in the United States became a clear catalyst for renewed activity, prompting buyers to accelerate acquisition planning and strengthening the pipeline for year-end closings. The tax incentive—which had been reduced progressively from 100% (pre-2023) to 80% (2023) and then 60% (2024)—had an immediate impact. Aviation International News reported significantly stronger transactions in August versus the prior year, with projections of intense activity through year-end driven largely by the tax benefit.

Additionally, the Federal Reserve cut interest rates by 25 basis points in September, the first such move in 9 months, to a range of 4.00% to 4.25%. Operational data reacted and industry confidence improved markedly: the Barclays Business Jet Indicator climbed to 60 points, its highest reading since 2022, and the 12-month outlook rose to 61 points, signaling a more constructive view of economic and market conditions. This improvement aligned with broader sector fundamentals, as OEM backlogs and pre-owned transaction volumes all trended higher year over year, while available inventory remained stable. Together, these dynamics set the stage for what is expected to be an exceptionally active end to the year.

Total manufacturers’ backlogs expanded 12.1% to $51.1 billion, maintaining book-to-bill ratios above 1:1 and delivery timeframes of 18–24 months—conditions that support pre-owned market values. Forward-looking indicators reinforced this shift in sentiment: 70–80% of IADA dealers expect stable or higher prices, and more than 90% anticipate stable or growing demand.

Overall, the third quarter of 2025 demonstrated that the combination of robust tax incentives—led by bonus depreciation—and solid structural fundamentals (expanded OEM backlogs, controlled inventory, and resilient demand in premium segments) reversed the caution observed during the second quarter and established an upward trajectory heading into the last quarter of 2025.

U.S. import tariffs introduced during the year also affected pre-owned aircraft transactions for non-U.S.-manufactured jets based outside the United States. The additional cost associated with these aircraft led many American buyers to reassess their options, enhancing their interest toward U.S.-manufactured or U.S.-based inventory, as well as aircraft originating from regions covered by aviation tariff exemptions. The lack of clarity around tariff applicability created further uncertainty within certain buyer segments.

The concentration of demand in U.S. aircraft—whether U.S.-based or U.S.-manufactured—at the expense of models that may be subject to tariffs creates a split in the market and can lead to distinct behaviors across different aircraft models. Since the United States accounts for a little over 60% of the global market—and is now further boosted by the return of 100% bonus depreciation—this divergence will be an important dynamic to monitor in the coming quarters.

Let's take a closer look at the pre-owned market numbers:

Executive Jets – All Segments

The pre-owned market remained stable and resilient in the third quarter of 2025. The total number of jets for sale inched up 1.1% compared to the same period last year, while average asking prices increased slightly by 0.5%. Average days on the market decreased by 3.8%, suggesting healthy absorption rates, and transaction volume grew 9.1% year over year, indicating that demand remains solid.

This combination of modest price appreciation and stronger sales volume reflects a market that is both active and well-balanced. The percentage of the fleet for sale edged down to 7.55%, from 7.7% a year earlier—comfortably below the 10% threshold that typically marks equilibrium in business aviation. In short, the data points to a market that has regained steady momentum.

Large & ULR Jets

At the upper end of the market, conditions remain strong but somewhat more nuanced. Inventory levels in the Large & Ultra-Long-Range (ULR) segment rose slightly—up 2.5% year over year—while average asking prices increased 4.1%, reflecting sustained buyer confidence in high-value aircraft. Average days on the market increased 7.3%, and transactions were up 2%, showing that the pace of trading remains healthy despite slightly longer sales cycles.

Multiple industry reports, including those from Corporate Jet Investor and Global Jet Capital, point to the longer transaction timelines in 2025, citing more complex due diligence, tighter regulatory verification, and more difficulty to access inspection and maintenance slots.

The percentage of the fleet for sale dipped to 7.04%, down from 7.12% in the same quarter last year—signaling a still-tight supply environment. Altogether, the data reinforce a picture of a stable and mature market where values remain firm and demand for large-cabin and ultra-long-range aircraft continues to exceed historical averages.

Manufacturers’ Performance

The third quarter of 2025 underscored the strength and momentum of the world’s leading OEMs, each advancing on the back of solid demand, fuller backlogs, and steady execution. General Dynamics, the parent company of Gulfstream, delivered another standout quarter, with higher earnings, expanding revenues, and a book-to-bill ratio of 1.5-to-1 supporting a record $109.9 billion backlog. Its Aerospace segment posted double-digit growth across every major metric, and Gulfstream accelerated deliveries to 39 new jets, marked the entry into service of the G800, and introduced the new G300, which will replace the G280.

Bombardier also reported a strong operational quarter: revenue grew 11%, adjusted earnings increased sharply, and the company recorded a 1.3-to-1 book-to-bill as the backlog expanded to $16.6 billion. CEO Éric Martel highlighted robust interest in the U.S. following the return of bonus depreciation.

Embraer delivered its strongest third quarter on record, with revenue up 18%, higher adjusted EPS, and an all-time-high backlog of $31.3 billion. Executive Aviation maintained stable deliveries and posted a 65% year-over-year increase in backlog, even with U.S. import tariffs.

Textron Aviation recorded growth in both jet and turboprop deliveries, higher revenues, and nearly 40% profit expansion, supported by a balanced mix. The global debut of the Cessna Citation Ascend at NBAA-BACE further elevated the brand’s visibility.

Outlook for the Fourth Quarter

The fourth quarter is traditionally the busiest period of the year for business aviation, and 2025 shows every sign of following that pattern with even greater intensity. The return of 100% bonus depreciation in the United States has created a clear deadline effect, encouraging buyers to close transactions before year-end to secure the tax benefit. This incentive, combined with stronger macroeconomic indicators and rising confidence measures, points to a concentrated wave of activity in the coming months. Inventory remains tight in key segments, particularly among newer and highly sought-after models, suggesting firm pricing through December. With OEM backlogs elevated, pre-owned transactions gaining momentum, and buyers now moving with greater decisiveness, the final quarter is positioned to deliver robust results. The market enters this period not just with optimism, but with the practical drivers that historically make the fourth quarter the strongest of the year.

Count on us to keep monitoring the market and bringing you our latest insights.

Luiz Sandler, founder