Newsletter 2nd Quarter 2025 (PDF)Newsletter 2nd Quarter 2025 (PDF)

Wow—summer went fast. I love the good weather and “vacation mode,” but let’s be real: parenting through summer is a marathon. With the kids back in school and Labor Day approaching, it feels good to shift gears and get back to work.

The markets certainly are ready; they have been slow, and while the summers are always a bit slower, they have not been this sluggish in some time. It’s a combination of several issues. There are the obvious issues, such as tariffs and high interest rates.

But there are also other issues, some more significant than others, and some more obvious. When you start to factor in massive charter discounts, several alternatives to outright ownership, as well as the fact that operating an aging aircraft has its own set of challenges, it becomes a little clearer.

In fact, over 4400 aircraft in operation are older than 20 years and are somehow technically still relevant. It’s fascinating, and if we were to look at a car equivalent, it would be like still driving the 2001 Ford Explorer to drive your family around or meet potential clients. Maybe that’s not the same, it would be like 30% of the cars on the road being from 1991 or older. It’s wild to think that people still fly in them, let alone purchase them.

However, the truth is that if they have been modernized, there isn’t much of a difference. The fact that the shelf life is as long as it is in aviation has really spoiled things for the new aircraft sales. Outside of a slightly more efficient powerplant, and possibly more access to financing, parts support or pilots (I do mean perhaps because many of these old aircraft are derivatives), the new aircraft really do not get you from point A to B any faster. It raises the question, why would anyone sell their aircraft now, replace it with something not much better, and invest millions to do it with a higher interest rate?

Well, the short answer is they aren’t. The consumer has made it clear, and the tides are shifting. The sense of urgency to purchase not just a business jet but many other high-end goods has slowed. It’s not just existing aircraft owners; first-time buyers are also sitting on the sidelines, waiting for the right time. The numbers back this up, indicating it is slower than usual.

As we approach the close of Q3, the business jet market has experienced a sharp reversal in recent weeks, with key metrics reflecting a significant shift. Transaction volume has plummeted by nearly 70%, with only 341 aircraft transactions recorded in the last 30 days, a drastic drop compared to 2,442 transactions in the prior six months.

In contrast to the decline in sales, the number of new aircraft coming to market has increased dramatically. Over the past month, 453 business jets alone have been listed for sale, an annualized rate almost 20% higher than the six-month trend. This increase in supply signals a potential shift toward a buyer’s market, with more options available to those who are still in the market looking to buy.

With transaction volume slowing and new listings rising, aircraft values have already experienced a decline between 4% and 15%. This combination of waning demand and an influx of supply is creating conditions that are currently more favorable for buyers.

Looking ahead to the remainder of 2025, these trends suggest that further price reductions are possible, especially as more aircraft come to market and fewer buyers are actively engaging. Buyers who have been waiting for the right time to purchase may find the current environment ideal for making a move. However, we must remain cautious of potential volatility through year-end. As we know, markets can turn on a dime from the unexpected.

  • Transaction Volume: Down nearly 70% from the prior 6-month pace, with only 341 sales in the past 30 days.
  • New Listings: 453 aircraft listed in the last month, showing an annualized increase of nearly 20%.
  • Aircraft Values: Decreased by 4%-15%, with more downward pressure expected.
  • Outlook: A buyer-friendly market is emerging, with potential for further price erosion as we head into year-end.

As always, we will continue to closely monitor the business jet market and provide updates as conditions evolve.

MOSAIC & Aircraft Values: What Changes, Who Wins, and Where Prices Go Next

If you’re wondering what MOSAIC means for prices—not just policy—you’re not alone. The Modernization of Special Airworthiness Certification (MOSAIC) is a shift from prescriptive limits (like hard weight caps) to performance-based standards. That opens the door to broader designs and missions—everything from next-gen LSAs to powered-lift/eVTOL concepts—and it will ripple through values over the next 6–36 months.

The Quick Take (Values Lens)

  • Near term (0–12 months): Pricing bifurcation. Late-model, well-supported LSAs with strong OEM backing hold value; older/obscure models face listing-price compression as buyers wait to see what qualifies under MOSAIC.
  • Medium term (12–36 months): More supply and new categories = tougher comps and slower resale velocity for marginal models; premium accrues to airframes with proven supportability, training pathways, and low DOC.
  • Powered-lift/eVTOL: Early units are likely to experience steeper initial depreciation until certification, infrastructure, and utilization stabilize.

How MOSAIC Moves Prices

  1. From weight caps to performance: By valuing stall speed, envelope, and capability over gross weight alone, MOSAIC increases the number of aircraft that can enter the market. More eligible aircraft = more choice for buyers = downward pressure on weaker/unknown makes/models.
  2. Innovation vs. fragmentation: Expect a wave of variants (powertrains, avionics, mission fits). That’s great for utility—but fragmentation can confuse buyers and lenders, slowing absorption and widening bid-ask spreads until winners emerge.
  3. Consensus standards & maintenance: Streamlined compliance and clearer standards reduce lifecycle costs for some platforms—suitable for retained value—but quality will vary by OEM. Buyers will consider the QA discipline, parts pipelines, and service network depth when pricing.

Segment-by-Segment Implications

  • Light-Sport / Recreational:
    • Winners: New-gen LSAs that pair modern avionics, robust OEM support, and training/club adoption. These can maintain or appreciate modestly if demand outpaces initial supply.
    • At risk: Niche or thin-support LSAs, older tech, or high DOC outliers. As fresh MOSAIC-eligible models arrive, these see price softening and longer remarketing time.
  • Trainer/Utility crossovers: Models that can slot into flight-school missions with low DOC and easy insurability gain institutional demand, a key support for values.
  • Powered-lift / eVTOL:
    • Short term: Speculative pricing transitions to real comps; early resale markets discount for certification timing, battery/propulsion refresh costs, and insurer stance.
    • Longer term: If utilization (AAM, aerial work) and uptime are proven, values stabilize, with premiums for reliable fleet support and favorable per-seat-mile economics.
  • Experimental/Kitplanes intersecting MOSAIC: Documentation, conformity to standards, and traceable build quality become value differentiators; poorly documented examples will be penalized with little to no financing and waning buyer interest.

What Pushes Values Up (or Down)

  • Up: OEM scale and backing; parts availability; insurer acceptance; clear training pathways; low DOC; strong safety/dispatch data; financing access.
  • Down: Ambiguous certification paths; fragmented ecosystems; thin dealer/service networks; battery replacement uncertainty (for electric); regulatory or community-acceptance headwinds.

Valuation mechanics you’ll see in the data

  • Broader comp sets and higher model churn increase the spread between ask and true trade values—especially for early-run and niche variants.
  • Curve steepening: Early-life depreciation may steepen for categories with fast tech cycles (batteries, autonomy), then flatten as reliability data accumulates.
  • Liquidity discounts: Airframes without fleet adoption or school/club use will carry higher liquidity discounts in adjusted values.

Practical Playbooks

Owners/Sellers (LSA & light singles):

  • If your aircraft is late-model and well-supported, you can hold through the initial MOSAIC noise.
  • If support is thin or tech is dated, consider selling ahead of broader supply, or budget for upgrades that directly improve liquidity (avionics, training-fit mods).

Buyers:

  • Prioritize OEM support depth, insurer appetite, and training fit.
  • Use escrowed performance deliverables (documentation, SB/AD status, battery SOH where applicable) to de-risk.
  • Avoid paying a novelty premium where fleet data and resale comps are missing.

Lenders/Insurers:

  • Adjust LTV and term to tech-refresh cadence, reward platforms with proven utilization, and OEM parts pipelines.
  • Bake in residual stress tests for powered-lift/electric on certification, infrastructure, and energy-cost scenarios.

Key milestones to watch (value catalysts)

  • Final ACs and implementation timelines
  • First customer deliveries & training adoption
  • Safety/dispatch reliability statistics
  • Insurance guidelines by category
  • Battery/propulsion lifecycle economics (for electric)
  • Network effects: service centers, parts hubs, pilot training throughput

Bottom Line

MOSAIC expands eligibility and accelerates innovation—great for utility, but it reshuffles value. In the next 1–3 years, expect more apparent separation between supported, mission-relevant winners (values resilient) and under-supported, higher-DOC outliers (values soften). The smartest money will price supportability, utilization, and insurability at least as much as raw performance.

Rates & Tax Update: What It Means for Aircraft Values (and Deals)

It’s wild how quickly the backdrop shifted. After Chair Powell’s Jackson Hole remarks on Aug 22, markets sharply raised the odds of a September cut. As of today, futures imply ~75–90% probability of a 25-bps move, while the policy rate remains 4.25%–4.50%. July’s jobs report (+73k) added fuel to the easing case.

The rate complex is already leaning that way: the 5-year U.S. Treasury is hovering near ~3.8%, a key reference point for fixed aircraft financing and lease rate factors.

Near-Term Read on Aircraft Values

  • Financing tailwind: A 25–50 bps step-down lowers carrying cost and widens the qualified-buyer pool. Expect better absorption and narrower bid-ask spreads first in liquidity leaders (late-model turbine, training-fit singles), while we monitor lenders’ LTV/term boxes and policy changes. Remember, interest rate cuts don’t always immediately impact the financing market.
  • DOM & pricing: If September delivers, Q4 could see a total reversal of the summer slowdown.
  • Caveat: A surprise upside print in jobs or inflation can delay the first cut—and stall momentum. Powell’s message was “door open, data-dependent,” not a promise.

Tax: 100% Bonus Depreciation Is Back—With Timing Rules

The One Big Beautiful Bill Act (H.R.1) permanently restored 100% bonus depreciation for qualified property acquired and placed in service on or after Jan 19, 2025. Great for businesses that actually qualify; irrelevant for personal-use buyers. Mind the transition rule: assets tied to binding contracts dated before Jan 20, 2025, generally don’t get the complete 100% and instead follow the phase-down schedule applicable to early-2025 acquisitions. Always confirm facts and placement-in-service dates with your tax advisor.

Practical Takeaways

  • If you qualify for a bonus: Pairing 100% expensing with even a minor rate cut is powerful for the after-tax cost of ownership and can support residuals in business-demand segments.
  • If you don’t: Rate relief still helps payments, but no direct tax lift—values will hinge on spec, supportability, DOC, and liquidity of your specific model.
  • Sellers: If your aircraft is turnkey, this setup favors listing sooner, while buyers are recalculating hurdle rates.
  • Buyers: Lock financing early, verify placed-in-service timing and usage to preserve bonus eligibility, and avoid paying novelty premiums where comps are thin.

Bottom Line:

Markets now lean toward a September cut, the 5-year bond market is cooperating, and 100% bonus depreciation is back together; that’s a modest but genuine tailwind for transactions and near-term values in the most finance-sensitive, business-use corners of GA and business aviation. Execution (tax eligibility, timing, and spec) will determine who actually benefits.

What’s New at VREF — and What You Can Do Right Now

We’ve launched the new VREF platform—rebuilt end-to-end to speed up workflows, sharpen accuracy, and cut busywork.

Live Today

  • Full model coverage: Access the entire VREF aircraft database.
  • Unlimited custom valuations: Build, save, present, and export reports without limits.
  • Charts & market data: Tap historical reference and analytic charts for quicker, evidence-based calls.
  • Avionics database: The industry’s largest, integrated into your valuations.
  • Mods & STCs: See popular conversions and optional equipment in the dedicated database.
  • Condition & engine tools: Apply interior/exterior condition modifiers and use the engine conversion tool.
  • AD history: Pull historical airworthiness directives inside the workflow.
  • Pricing views: Retail and wholesale values, plus comparison tools across airframes.
  • Portfolio features: Create custom indexes, estimate inventory value, and reference orderly/forced liquidation and scrap values (ideal for lenders and dealers).
  • Residuals: View future projected residual values for long-range planning.
  • Human help: Live “Ask the Appraiser” chat.
  • No distractions: Ad-free experience.

Let’s not forget that the new VREF report is beautifully laid out and contains more data than ever before!

Full feature list is here: https://vref.com/vref-online-aircraft-valuation-platform/

Coming Next

  • Operating Costs: Direct and Fixed operating costs will be available, saving you time, money, and more importantly, guesswork as to what the numbers mean.
  • Market trending data is now inside the app, and you’ve asked for comps. Soon, you’ll have the entire market at your fingertips.
  • API rollout (weeks away): Programmatic access to VREF data, with expanded datasets and deeper market analytics for underwriting, portfolio monitoring, and internal tools.

Why This Matters

For lenders, insurers, asset managers, and brokers, the new stack turns quarterly values and audit-ready reporting into everyday, push-button tasks—speeding decisions and standardizing risk metrics across teams. If you rely on valuations to move capital or manage fleets, this is designed to be your backbone.

In the coming weeks, with the release of our new API, we are committed to our B2B offerings.

New VREF Podcast Launch

I’ve also launched a new podcast series where we cut through the noise and talk directly about the realities of today’s market. The first episodes tackle tariffs, interest rates, the summer slowdown, and where values are headed next. Unlike trade-show panels, these discussions are raw, practical, and geared toward owners, buyers, lenders, and industry professionals who need unfiltered insights. We’ll also bring on guests—operators, financiers, and maintenance leaders—to talk about their challenges and strategies in real time.

If you haven’t tuned in yet, the podcast is available on Spotify, Apple Podcasts, and our website. It’s an extension of the VREF philosophy: actionable information, not fluff.

Market Perspectives: Signs of Caution, Signs of Growth

Transaction data this summer has been mixed. Jet activity slowed considerably, and rotorcraft liquidity remains thin—even as many asking prices drift higher. At the same time, some good news as buyers recalibrate to the new rate and cost environment. The piston markets have weathered the slowdown, so far, the aircraft that have seen recent depreciation have been tied to premiums coming out of the market (Diamond DA62, 50, NG) or due to significant improvements like the SR22G7+.

The Truth as We See It

Signs of Caution

  • Ask/Sell gaps widened: Some sellers are still anchored to 2022–23 peaks; buyers are refusing to pay. The comps support this across the board, except for the piston training market, which shows no signs of slowing down.
  • Days on market lengthening: Especially for older tech, high-DOC airframes, and aircraft needing refurbishment, engine overhauls, or that are damaged.
  • Financing friction: Lender boxes (LTV/terms) haven’t loosened as fast as headlines; carry costs still matter.
  • Rotorcraft realities: Light transaction volume plus rising asks = selective liquidity at best.
  • Tech obsolescence discount: Aging avionics/engines and support uncertainty are getting priced in. Lenders are requiring more down payment; buyers should consider newer aircraft, even if they are in a lower cabin class.

Signs of Growth

  • Inventory is becoming workable: More choice and better comparables are helping serious buyers move.
  • Late-model, well-spec’d aircraft still clear: Clean pedigree, strong OEM support, and training/insurance friendliness are key selling points.
  • Selective price discovery: Realistic pricing is producing trades and tightening spreads in several sub-segments.
  • Policy tailwinds: Easing-rate expectations and improved expensing rules are nudging corporate buyers off the sidelines.
  • First-time and upgrade demand: Flight-school, charter, and owner-flown niches continue to find financing.

What to Watch Next

  • Actual rate moves vs. expectations and how quickly they transmit to lease rate factors.
  • OEM slot availability, parts pipelines, and AOG trends (support drives residuals).
  • Insurance stance on pilot experience and mission profiles.
  • Evidence of renewed fleet programs (trainers/utility) and corporate refresh cycles.

Bottom Line

This isn’t a broad “up” or “down” market—it’s a sorting market. Late-model, supported, and mission-fit aircraft sell; dated, high-cost, or under-supported models must be priced to entice. Smart sellers adjust; savvy buyers stay patient, fundable, and ready to move when the numbers pencil.

Closing Thoughts

The aviation market remains a study in contrasts: buyers are cautious, sellers are pragmatic, yet confidence is quietly building. Helicopter and utility markets are showing pricing resilience, while the business jet sector is adjusting to an inventory surge and softer demand. The good news is that interest rates are finally going to drop, and with that, buyers will start shopping. It’s that simple.

At VREF, our role is to help you cut through the noise, interpret the data, and make informed decisions. Whether you’re an operator evaluating your fleet, a lender underwriting new exposure, or a buyer trying to time the market, we are here to provide the clarity you need. As always, thank you for trusting VREF as your aviation partner.

Jason Zilberbrand, ASA