As the business world await anxiously on the fluid developments of Trump’s global tariff policy, we thought it pertinent to consider the potential affects on the private aviation sector in particular, and also how some of the key players (both US and ROW manufacturers), could respond to the tariffs.
Tariff Affects on The Private Aviation Sector
Whether the tariff exemptions are expanded over the coming months (as reported by Reuters today – 07.03.2025), the uncertainty within private aviation will continue and may well impact on future decisions with regards to investment.
There is no doubt though that Trump’s tariff policy, particularly if it involves new or increased tariffs on aircraft, aviation components, or materials like aluminium and steel, will significantly impact the private aviation industry in several ways:
1. Increased Costs for Aircraft Manufacturing and Sales
Higher Material Costs: Tariffs on aluminium and steel, which were part of Trump’s previous trade policies, could drive up the cost of manufacturing private jets.
More Expensive Aircraft Imports: If tariffs target foreign-made private jets (such as those from Bombardier, Dassault, or Embraer), buyers in the U.S. might face higher prices.
Retaliatory Tariffs: If other countries impose tariffs on U.S.-made aircraft (such as Gulfstream or Cessna), international demand for American private jets could decline.
2. Supply Chain Disruptions
Many private jet manufacturers rely on a global supply chain. Tariffs on aviation parts could increase production costs and delay aircraft deliveries.
Engine components, avionics, and specialised materials sourced internationally may become more expensive or harder to acquire.
3. Changes in Demand for Private Jets
Corporate and High-Net-Worth Individual Purchases: Higher prices could deter some buyers, particularly those on the fence about new purchases versus leasing or chartering.
Leasing and Charter Growth: If ownership costs rise, demand for private jet charters or fractional ownership models may increase.
4. Impact on Maintenance, Repair, and Overhaul (MRO) Services
Tariffs on spare parts and maintenance components could raise operating costs for private jet owners, making MRO services more expensive globally.
U.S.-based MRO providers might see increased demand if tariffs make international servicing less competitive.
5. Potential Market Shifts
Some buyers might look to pre-owned jets to avoid higher costs associated with new aircraft.
Manufacturers may shift production to countries with lower tariffs or establish new trade relationships to circumvent tariffs.
Bottom Line
If Trump reinstates or expands tariffs, the private aviation sector could see higher costs, supply chain challenges, and shifts in buying behavior. However, companies that adapt through alternative sourcing, domestic production, or increased leasing options may mitigate the impact.
Potential Response From The Key Players
1. U.S. Manufacturers (Gulfstream, Textron, Boeing Business Jets)
Potentially Higher Domestic Demand: If tariffs make foreign competitors (Bombardier, Dassault, Embraer) more expensive in the U.S., domestic buyers may turn to Gulfstream (G500, G650), Textron (Cessna Citation), and Boeing Business Jets.
Supply Chain Adjustments: These companies source parts globally; tariffs on aviation components could increase costs, forcing them to either absorb costs or pass them on to customers.
Expansion of U.S. Manufacturing: To mitigate reliance on foreign parts, they might increase domestic production of components.
2. RoW Manufacturers (Bombardier, Dassault, Embraer)
Higher Prices in the U.S.: If tariffs hit foreign-made jets, Bombardier (Challenger, Global), Dassault (Falcon), and Embraer (Praetor, Phenom) may lose price competitiveness in the U.S.
Workarounds via U.S. Assembly: Bombardier already has a U.S. facility in Wichita, Kansas. Other companies may expand U.S. operations to avoid tariffs.
Growth in Non-U.S. Markets: If demand weakens in the U.S., these companies may focus more on Europe, the Middle East, and Asia.
3. Private Jet Charter & Fractional Ownership (NetJets, Flexjet, Wheels Up)
Shift Toward Leasing Over Buying: If new aircraft prices rise, more businesses and high-net-worth individuals may opt for fractional ownership (NetJets, Flexjet) or jet cards (Wheels Up, VistaJet).
Increased Demand for Pre-Owned Jets: Charter companies might invest in used aircraft to avoid high costs of new jets.
4. Maintenance, Repair, and Overhaul (MRO) Providers
U.S.-Based MRO Companies Benefit: If tariffs make imported parts expensive, U.S. companies like StandardAero and Duncan Aviation could see more business from domestic jet owners.
Cost Pressures on International MRO Services: Providers that rely on foreign components may struggle with higher costs.
5. Business Aviation Finance & Leasing Companies
Higher Lease Rates: If aircraft prices increase, leasing companies may adjust pricing, making fractional ownership and lease programs more expensive.
Increased Demand for Alternative Financing: More buyers may explore creative financing structures to offset higher costs.
Overall Takeaway
U.S. manufacturers and MRO providers could gain an edge domestically, while foreign jet makers might lose ground in the U.S. but shift focus to other regions. Charter and leasing firms may see increased demand as buyers look for alternatives to purchasing new jets.
