The economy isn't getting better as many have guessed by now, but the pain does seem to be spreading to even the wealthiest among us. Many repossession agents are reporting that the retaking of private planes has increased dramatically as many wealthy individuals run out of cash needed to maintain and operate them.. Some of the jets, worth more than $20 million are in poor shape after sitting idle for months. The owners of these airplanes facing repossession include corporations and affluent individuals who have fallen on hard times and have decided to put their jets on the back burner to deal with more pressing financial issues. And many lenders and repo-men specializing in the repossession of private plans say that their business is set to increase in volume this year.
"The small, single-engine Cessnas and Pipers are being repossessed all the way on up to 747s," says Terence Haglund, founder of the Aviation Law Center, who represents many lenders. "It's definitely recession-related, and it's been increasing for the last couple of years."
But unfortunately for the lenders hoping to repossesses the private plane and auction it off to make back some of the defaulted loan, many of the planes are worth only a fraction of what the owners paid for them originally. In what seems to be aviation's own upside-down lending crisis, many of the jets and small airplanes have lost significant value since the recession began. And to top it off, there aren't many lenders willing to grant many a loan to finance an airplane.