Latest / VREF | The Truth About the Aviation Market / The Market Split In Half: The Numbers Don't Lie | EP 55
Transcript
- Addison: Welcome back to the truth about the market. I'm Jason Zilberbrand. I'm president of VREF. Every week we pull back the curtain on what's really happening in the aviation marketplace, what aircraft actually are worth, what they actually cost to own, and the things the glossy listing sheets won't tell you. There's no spin, no sales pitch, just the truth about the market. And today's a big one. Today is the mid year report card. It's the state of the market, it's 2026 year to date, and I'm going by every weight class, every number, straight out of the VREF transaction database. And today's episode carries something extra. We just closed the September 1st value revision. So for the first time this year, I can give you both halves of the story: the volume half and the price half. Some of what I'm about to read you will not match what you've been hearing at the airport or in the trade press. Or with those association no newsletters that we all love. And that's fine. That's the whole point of this show. So bring a pencil because I'm gonna give you six numbers to start your day. Three volumes, three prices. Let's get into it. All right, light jets. Volume is down 18%. Mid-size jets down 25.5%. Large jets down 13%. Those are transaction volumes year to date 2026 versus the same point in 2025 across the entire in-operation business jet fleet. Now, the three you haven't heard. In September, the first value revision, legacy mid-sized jets came down about 5.1%. Light jets came down about 2%. And large cabin flagships, current production, Gulf Streams, Globals, and Falcons. They went up six percent. So you read those two sets of numbers together because they only make sense together. For most of this year, I've been telling you prices were holding while volume did the adjusting. That was true. It is no longer true. The price side of this market has started to move and it did not move in one direction. It completely split. Out of six hundred and fifty-eight business jet model years that we revised on September 1st. 421 went down, 230 went up, 50 models went down, 22 went up. The market didn't fall and it didn't rally, but it did tear in half. And the three volume classes together and the market has done 1969 deals so far this year against 2423 at this point last year, down almost 19% overall. And here's the sentence that should stop you mid-coffee. 1,969 transactions year to date is essentially the same pace as 2020. The COVID year, the year the whole world stopped flying, and nobody could get an airplane shown, inspected, much less sold. The business jet market is quietly around tripped at 2020 volume, while a good chunk of this industry is still telling you it's a seller's market, which is kind of crazy. So today we're going to go. Cabin class by cabin class on volume, then cabin class by cabin class on price, and we're going to figure out what's actually happening because volume is truth and a value revision built on closings is the receipt. And I've got the paperwork to prove it. So, one housekeeping note before we start. I want to make sure everybody knows everything in this episode comes from the VREF transaction database. Full market, every recorded transaction type. The fleet denominators of aircraft actually in operation compared at the same calendar point every year. The price figures are from our September 1st fair market value revisions across the model year ladders in the VREF database. I say all of that up front because by the end of this episode, you're going to hear numbers that contradict some very confident headlines. And I want you to know exactly whose count you're trusting and how it was built. And nobody surveyed anybody, guys. These are closings. So let's lay the table. Let's go weight class by weight class. All figures are same calendar point comparisons, apples to apples. This year's year-to-date transaction against the identical window in each prior year, covering all transaction types across the entire in operation fleet. Yes, it was a ton of work. Yes, this is what I have to do every quarter. So I am sharing with you behind the scenes as to what's actually going on for the very first time. So let's talk about light jets. 11,839 of them are in operation. It's the biggest fleet in business aviation. Year-to-date closings, 947. Last year at this point, 1,157. That's down 18.5%. Now stretch the lens, 2024 was 1,033, 2023 was 1074, 2022 was 1,384, and then the 2021 peak was 1405. So from peak to today, light jet volume is off 32.6%. And the number that really tells the story 2020 was the pandemic year. They still sold 907 aircraft. We are 40 transactions above the worst operating environment in modern aviation history. So, what about the mid-sized jets? Well, 6,188 in operation, year-to-date 462 closings, against 620 last year. That's down 25.5%. It's the steepest decline of the three classes. And we're going to spend a whole segment on why. The peak was 676 in 2022. We're off 31.7% from that. And here's the one that hurts the most. 2020 sold 500 aircraft. Mid-size is now transacting below COVID. Let that sink in. There were more mid-size jet deals closing in the middle of a global shutdown than there are today. Well, what about the heavy jets? 7,270 of them are in operation. 560 year to date have sold versus 646 this time last year. That equates to down 13.3%. Now it is the shallowest decline of the three. Peak was seven hundred and sixty-eight in twenty twenty two, so the heavy aircraft is off twenty-seven percent from the top. But The heavy aircraft is also the only cabin class still meaningfully above its 2020 baseline of 492, about 14 percent ish above. The top of the market is the last thing standing, and the fact it's going to matter a great deal in about 10 minutes when we get to prices. So remember this in a few minutes. Now, one more pattern in the table before we move on, because I think it's important and it's also really sneaky. And I think it matters. So 2025 was an up year. And if you look at the sequence, every single cabin class rose from 24 to 25. Light went from 1033 to 1157. Mid-size aircraft, 540 transactions to 620. Large, 598 to 646. So if you were writing a market report last fall, you had a genuine recovery story. But 2026 took every bit of it back with interest. That's what a dead cap bounce looks like in transaction data. The 2025 uptick pulled forward demand, gave everybody a headline, and left 2026 holding the bag. Anybody who extrapolated last year's trend into this year's budget is now explaining the variance. And let me give you one more way to hold these numbers, because percentages hide the physical reality, which is turnover. Nine hundred and forty seven light jet closings against a fleet of nearly twelve thousand. So annualize that, and you're looking at roughly fifteen percent of the fleet changing hands in a year. And I'll be honest, that sounds pretty healthy until you remember that at its peak it was north of twenty. Midsize annualizes to about fifteen percent of its sixty two hundred aircraft, heavy to about fifteen percent of its seventy-three hundred. A business jet market in equilibrium is. historically turns over somewhere in the low to mid-teens, which means we're not in a collapse. We're at the bottom edge of a normal year after living two years above it. And I think that's the honest frame. 21 and 22 weren't the standard. They were the anomaly. The problem is that an entire generation of owners, brokers, lenders, they all priced and borrowed and planned as if the anomaly were the baseline. Today's table is what the baseline actually looks like. And for anyone who bought at the top with a five-year hold, the reversion isn't a forecast anymore. As of September 1st, it's a mark. So before we get to the price revisions, and that's this segment you're going to want to write down, I'm going to do the thing every podcaster does, except I'm going be honest about why. I want you to follow the show. I would love for you to like this episode. I would really appreciate it if you would subscribe on YouTube or. Whatever podcast app you're holding right now. And it would mean a lot if you left me a rating. Or better yet, make a review or comment. I am literally pleading with you, and here's the honest reason why. It's because this show runs on full market data and we don't get sponsorship, primarily because we don't ask for it. So we get no OEM money. We get no brokerage money. I don't get a dollar from the associations. The only thing That keeps this show going is you. The algorithm is the marketing department I've got. And you are the algorithm. So 10 seconds of your thumbs keeps independent market data in your feed and in front of the next buyer about to overpay because a survey told them it's a seller's market. Do it now while I sip my coffee. I really appreciate it. I want to thank you. And now I'm going back to work. So All year. I have told you the same sequence. Volume leads, days on market confirms, price lags. I said the price would come last, and that by the time the indices caught up, you'd be a year and a half late. Well, the lag just closed, and I'm going to show you my own numbers, whether they flatter me or not. On September 1st, we revised the fair market values across the model year ladders in our entire database. And for the business jet classes, that's 658 model years across 72 aircraft models. 421 of them came down. 230 went up. Seven were flat. 50 of the 72 models moved down on net. 22 moved up. If you stopped there, you'd say the market fell. Well, don't stop there because the split is not random and it's not about weight class, the way we usually talk about the weight classes. It's about one thing. You want to know what it is? I bet you do. And I'm going to share it with you. It's whether your airplane is in current production or if it's the one before current production. So let me give you the four buckets. Bucket one, light jets, down two points. Not a lot. And 19 of the 22 models are lower. Lear 40s, XRs, the Honda jet, citation jet, Learjets. The 520, the all the citation jets, the 525, the CJ3, the Eclipse, Citation Bravos, Beachjet 400s, Mustangs, M2s, all down. Three exceptions went the other way. And they're instructive. They're the Phenom 100, the Phenom 100 EV, and the PC24. Newest product in the class, best supported product in the class, and they went up. Everything with a legacy support story went down. Here's the second bucket. And this is the one to circle because it's the legacy mid-size aircraft. It's down five points. And I want to be precise about what makes that number remarkable. It isn't that the average fell. It's that there was no dispersion at all. 16 models, 122 model years, every single model year in the bucket came down. Not one held. Not one. Not a hawker. Not a G100, not an Excel, not a Lear 60, not a Falcon 50, not a Citation Sovereign. When a hundred and twenty-two consecutive model years all move the same direction, that's not noise, and it's not a modeling artifact. This is a bucket the buyer pool walked away from. Bucket three. Current production supermids, they're up four point one percent and the mirror image of bucket two. Sixty-one of sixty-three model years up, not a single one down. And it's the usual suspects, Challenger 300s, 350s. I've done shows about the 3500. The G280, the Prater 500, 600, all up. Bucket 4, large cabin aircraft. And here it splits again, cleanly along the same line. The current flagships are up 6.9% as a group every single model you're higher. Global six thousands up eleven percent. Falcon six X's up ten percent. G seven hundreds up eight Challenger six hundred five's up eight. You you look at the Falcon nine hundred LXs, they're up six, G six fifties and six fifty ERs are up six. Even the G550 is up a few points. And then the previous generation of the exact same airplanes, they're all down 3.4% as a group. All 135 model years lower. Falcon 2000 LX is down eight. The LXS next to it on the ramp is up eight. Gulf Streams, the G5, all the BBJs, Legacy 600, 650s, older Global Express Classics, 5000s, XRSs, They're all down. So here's the correct sentence about prices in 2026 year to date. And it's not the sentence I was using in January. Prices are not holding, and prices are not falling. The value of being the current airplane went up, and the cost of being one generation back went up with it. The market repriced obsolescence. That's what happened, guys. Now let me show you the second pattern in this revision because it's more useful to you than any single percentage. And look at what's inside a model's ladder, the change actually landed. So if you take a G450, let's look at model years 2005 through 2012. All went up 9%. And then it tapers. 2013 up 8%. And 2014 up 7%, and so on and so forth. And you see the same thing with Falcon 2000s, and you see the same thing, I mean with LXS and with G280s. That's a depreciation curve flattening. On the winning airplanes, the used mid-vintage airframes are closing the gap to the new ones, which is exactly what you'd expect when OEM delivery slots are gone and there's a backlog and people are waiting years to buy an aircraft. And a buyer then decides that a 2013 will have to do his mission. Now watch the losers do the opposite. The CJ4, way down. The Honda Jet, way down. Put those two together and you get the single most actionable line in this episode. In large cabin, the age penalty is shrinking. In light and legacy midsize, the age penalty is growing. If you own a 15-year-old global, the market's just paid you for waiting. If you own a 15-year-old citation jet or a hawker, the market just charged you rent, guys. And let me make it dollars. Because I think percentages are easy to nod along to and hard to feel. A 2015 Global 6000. $22.5 million is now twenty four point eight. That's two and a quarter million dollars in one revision for doing nothing. A twenty twenty four global six thousand fifty-nine point eight to sixty-eight point two. That's an eight point four million dollar increase. Now the other side, because I like to play the other side. A 2008 Learjet 40XR, well, it's down from 2.4 million to 2.1 million. And that's a lot. That's a couple hundred thousand dollars gone on an airplane worth two million bucks. And the Honda Jet, like I said, it went from 2.4 down to 2.1. So again, you know, another couple hundred thousand dollars down on an aircraft that's not worth nearly as much. Same thing with the CJ4s. And and I think same thing with the Hawker 900 XPs. Same market, same week, same appraiser, right? And a lot of the money just walked out the door. So now let's put volume and price in the same frame because the standoff I've described all year just changed character. Here's the inventory side of the table. So light jets, there's 18,857 of them for sale right now. 7.24% of the entire fleet. That's not a lot, just over seven mid-size. Four hundred and thirty-eight for sale. Again, it's just over seven, seven point zero eight percent. The large airframes, there's three hundred of them for sale. Actually three hundred and seventy. That's five point nine percent. All of those numbers are in a normal market bracket of buyer activity. But if you run those through the classic bands we've used on this show for years, under five percent of the fleet for sale is a seller's market, right? Around 10%, that's the upper end of normal. 15%, and it's up above what we call a normal market, and it's now into a buyer's market. And the heavy aircraft at 5.1 is sitting right at the tipping, you know, the the balancing point between a seller and a normalized market. So it's tight, but it's no longer under it, right? So it's no longer a seller's market. Light and mid, it's seven and a quarter. Or 7.1. It's what I call no man's land. There's too much supply to call it a seller's market with a straight face. Nobody can. And there's not enough buyers to hand the keys to. Call it what it is. Light and mid-size have drifted into slight buyer's edge territory, and the heavy is the only one that's balanced. And for most of this year, that combination, volume at COVID year levels, inventory creeping up, prices holding, it added up to a standoff. That's why you saw no activity for the entire year. Sellers anchoring to 22, buyers anchoring to 26, neither side wrong about their math, neither side moving. And so the thing that adjusted wasn't price, it was volume. Deals simply didn't happen. You guys all know this. The bid ass spread never shows up in a published number, but it showed up exactly here: 18% fewer closings. That's a big deal. What changed on September 1st? Is that the standoff stopped being symmetrical? In legacy mid-size and older light jets, somebody finally moved. And it was the sellers. 122 consecutive legacy mid-size model years making marking down 5% is capitulation showing up in the data. It's not a crash, but it is a concession. The 2022 anchor broke in part of the market that had the weakest buyer pool exactly where the volume told us it would break first. Roughly eight months after the volume told us. At the top of the market, the standoff broke the other way, buyers moved. When you can't get a delivery slot, guys, until 28, and the pool of quality large cabin airframes is 5% of the fleet, the buyer is the one who blinks, and he blinks by paying up for a 2015 airframe he wouldn't have looked at 18 months ago. That's the 6.9%. So the honest headline is this. This standoff is resolving and it's resolving in the opposite directions at the opposite ends of the market, which means for the first time in three years, how's the market? Well, it has no answer at all until you tell me what you own. And one thing, the standoff still explains in both directions. Days on market. When I tell you airplanes are taking weeks longer to sell than at the peak, this is the mechanism. The airplane isn't worse. The listing isn't worse. The gap between the seller's number and the buyer's number is widening. And every week of that negotiation shows up in the days on market column. So let me make it concrete because I watch it happen weekly in the appraisal work I do. A super mid list at $11 million because a sister ship sold for 10.8 last year. Never mind that the sister ship had fresh engines on a program. And this one is 18 months from a big inspection. Buyer offers 9 2, supported by exactly the kind of data we just walked through. And then what happens? The seller counters at 10 6 and stops returning calls. 90 days later, that airplane is still for sale. Now, well, it's got market wear and tear. The buyer bought a different airplane and a different class. And the seller tells everyone at the FBO the market is still strong, because nobody made him. An offer to back up his aspirational asking price. And if you multiply that conversation by 454 missing transactions this year, you have the first half of 2026. That's it. That's it in a nutshell. Here's the update: in that seller's bucket, the book just moved to the buyer side of the argument. He's not negotiating with a buyer anymore. He's negotiating with a published value now. Longtime listeners will recognize all of this as the confidence recession I've been describing all year. Guys, I've been talking about this all year. Literally. Deals freezing before prices break, and then prices breaking unevenly. And if you heard our Alphabet Organizations episode, which I really hope you did, you now understand why the member surveys can't see it. A survey of sentiment measures what people say, and a self-reported transaction count from a subset of dealers measures market share. It doesn't measure the market. This table is every closing in the fleet. Volume is in the thermometer, and the September 1st revision is the diagnosis. Now let's talk about the number that should be keeping fleet planners and lenders up at night, which is mid-size volume down 25.5% transacting below the COVID year. And now in the legacy half of that class down 5.1% in value with not one model year spared. Why mid-size? Well, because of the what mid-size aircraft represent and who the mid-size buyer is. The light jet is the entry point. The owner pilot stepping up from a turboprop. Or the first-time corporate buyer. Maybe it's the charter workhouse horse. The heavy jet is the wealth per purchase, the global operator, the family office, the head of state, buyers whose decision is driven by net worth and mission, not by quarterly earnings. But the mid-size cabin class and the super mid-buyer, that's the discretionary corporate purchase. That's the company that could get the mission done with a light jet or even charter, or maybe use the airlines. and stretches into a mid-size cabin class aircraft because times are good and the board is confident. Which means mid-size is the first segment to feel it when the boards get cautious. The mid-size buyer doesn't disappear. He defers. He trades down. He charters the peak weeks instead of owning the tail. He waits for the rate cut, waits for the election cycle, waits for clarity that never quite gets there, never arrives. Every one of those decisions subtracts at closing from this column, and collectively they subtracted a hundred and fifty eight closings this year. Now they're subtracted five percent of the book value too. This is not a new phenomenon. It's the older pattern in this industry. In every cycle I've watched across three and a half decades, the middle of the market gets squeezed first, hardest, and earliest. Midsize is the canary in the business aviation's coal mine. And right now the canary is on its back with its feet in the air. Meanwhile, look at the two ends holding up. On one side, you have heavy, where the volume is down the least because wealth concentration is real. The global buyer pool is real. The OEM backlogs on new large cabin aircraft are still pushing buyers into that pre-owned market. And now we see that pressure in the price column, not just the volume column. And light holds up better than mid. Partly because it's the destination for trade-down buyers. And a lot of those mid-size aircraft lost demand, but it reappeared in the cabin class below it. So the middle gets eaten from both directions. And here's the irony: I promised you last episode, now with numbers attached, the dealer surveys are out there quoting super mid-size prices at all-time highs with multiple offers. Buyers even waiving pre-buys to win deals. I told you both things could be technically true at once. They are. I can now show you the exact seam. Current production super mid up four percent, 61 of 63 model years, and none of them traded down. None of them traded lower. The flip size, legacy mid-size is down 5%, and 122 of the 122 model years. Went lower. Dropped in value. None of them went up. Same weight class. Same segment on a survey. A nine point spread between them. That is what a hollowed out market looks like with the lid off. On one side you have a Challenger 350, and on the other you have an eight hundred fifty XP. Both are mid-size and every press release you'll read this quarter, one of them went up five percent and one of them went down seven. And any average that contains both of them Describes an airplane that does not exist. Averages built on the airplanes that did sell tell you nothing about the airplanes that couldn't. That's my gripe with all these surveys. And averages built across a weight class, well, they tell you nothing about the airplane in your hangar. There's also a real structural leak in this class nobody wants to talk about. So let's put it out there. Let's talk about what none of the media companies want to talk about, what none of the associations should be worried about. And that is as follows. And it's a big one. It's fractional on charter growth. Every corporate flight department that swaps a whole super mid for fractional shares, or even a jet card, subtracts an owner from this market forever. See, they still get lift, but the transaction column never sees it again. Some of mid-size's missing volume isn't deferred, it's gone. And when demand leaves permanently, price follows permanently. That's part of what you're looking at in bucket two. See if you're holding a legacy mid-size inventory, or lending against mid-size residuals, or planning a fleet refresh around super mid-values, the early warning system just went from amber to flashing red. The volume went first, the days on market went second, the price went third. On September 1st, there is no fourth signal. This is the one you were waiting for. Which brings me to the obvious question you should be asking. And now it's a sharper question. Than it was an hour ago. What does this mean for my airplane or my model year or my serial number? Because if there's one thing this revision proves, it's that the class level number can be dead wrong for your aircraft. A nine point spread in size midsize, a 16 point spread between a Falcon 2000 LX and an LXS, five percentage points of a difference between a 2005 G450 in a 2017? That's not a podcast answer, guys. That's a data answer. And it's literally what we built VREF online for. Membership gets you current values, historical trends back to delivery. We give you operating costs, fleet data on virtually everything operating, everything flying. The same platform the banks and insurers use. We update the revisions I just read you quarterly. And if you're buying, selling, or refinancing something with real money attached, get an accredited appraisal from someone whose number gets tested in courtrooms and in loan files, not just in a conversation. Go to VREF.com. If you own a legacy mid-size aircraft or a light jet built before 2018, you're gonna want to pull your number this week, not next quarter. Okay, let's turn the table into decisions. Because data without a decision is trivia, three audiences, and a word on how to use this data no matter what seat you're in, anchor every conversation to your bucket, not to your weight class, and never to the anecdote. The FBO story about the airplane that sold in four days with three offers is real and statistically meaningless. 11,800 light jets don't care what happened to one of them. But as of this revision of numbers, Light jets are down 2% is almost as useless to you as the anecdote. Because inside that number, the PC twenty-four is up eight, and the Learjet 4060, 40 XR and 60s are down. So find your aircraft, find your model, find your model year. That's the field you're playing on. Sellers first. And you now get two different speeches depending on what's in your hangar. If you own a mid size legacy plane. Built before twenty eighteen or a light jet. Remember, you're not in 2022. The market's not going to meet you halfway. And as of September 1st, the book agrees with the buyer, not with you. That's a different conversation than the one you were having in June. You're no longer arguing about opinion. You're arguing about a published number your buyer's lender is going to pull anyway. If your airplane has been sitting for 150 days, the market's already voted on your price. The revision just certified the election. Price to transact in the first 60 days, that's your goal every time. If it goes beyond that, you're pretty much dead in the water. While your listing is fresh. And serious buyers want to look at it. Get your records digitized. Get them organized. Ready before you list your plane. Because in a thin market, the prepared aircraft takes the scarce buyer. And if the number the market supports doesn't work for you, and it may not, you know what you should do? Don't list it. Feeding the standoff helps nobody. And a stale aircraft when it's yours costs you money on the eventual exit when it does happen. If you own a current production large cabin or super mid, congratulations. And now be careful because up 6.9% is exactly the number that makes an owner overreach. This revision is a mark, it's not a mandate. Your airplane is worth more than it was in June. Congrats. That does not mean it's worth your asking price. Plus. What's plus? Plus a cushion. The buyer pool at the top is small. It's sophisticated. And looking at the same book you are, and you're competing with the big fleet operators. Price to the new number, not through it. Buyer second. All right. Do not misread this episode as bloodless. I did that episode months ago about a different phenomenon. And I do not misread it as a green light at the top either. Two specific trades come out of this data. The first, legacy mid-size and older light jets, leverage is rotating towards you, and we now support your side of the table. Negotiate on the revision, on the days on market, on inventory percentages. Sellers can argue with your opinion. They can't can't argue with the numbers we've published. Two, at the top of the market, the patience trade is over. Every month you waited for a large cabin flagship this year costs you money. And if OEM slots stay gone, that continues. The trade up there is preparation, not patience. Financing arranged, pre-slots, pre-buy slots identified, booked, mission spec written, so in the right aircraft services, you can pounce and move in days. And one warning for the trade down buyer. Because a lot of you are about to become one. An 8% markdown on a legacy hawker or an old citation is not automatically a bargain. Ask why it moved. A class where every single mod year fell and the volume is running below the COVID year is a class with a demand problem, not a pricing accident. Buy it for your mission and the me and the maintenance status at the new number, not because the old number made it look like a discount. Third, and this is the the bucket with lenders, insurance companies, your fleet planners. This is your episode, so I'll be direct. Watch legacy midsize residuals with both eyes. Because the sequence I've been telling you about all year has now completed. Volume led, days on market confirmed, price came third, and with our latest revision, we're down, there's no dispersion, and no dispersion is part that should get. Your attention, because it means that this isn't a handful of distressed aircraft dragging an average down. It's the whole bucket, the whole enchilada. If you wrote 2022 vintage paper against hawkers, Excel's sovereigns, Learjets, G one fifties, Falcon 50s, Citation Sixes, Sevens, your residual assumptions need a conversation this quarter. Call me, we'll have one. Better to have it now voluntarily. Then in 18 months, when an auditor in the room is asking you why you didn't act on a published revision that we made. And the big jets. The heavy. Heavy's fine today at 5% inventory with flagship values up. But note carefully which heavy. Prior generation and airliner derived large cabin VIPs came down 3%, maybe more this year. While the flagships went up, if your book is full of old globals or Old G5s or Old Legacy 600s or even old BBJs, you are not in the segment that just went up when appreciated. You're in the bucket for his basement, 27% off peak volume means the top of the market's thinner than its price stability suggests, and balanced is one quarter away from soft. One more piece of seller math, because I want this to sting enough to remember, chasing the market down always costs more than pricing it. Today. Say the market supported the number today is eight and a half million dollars and you list it at 9.6 because that's what 2020 owes you or 2022 owes you or 2023 owes you. Six months from now, you cut to nine one, but the market drifted again and now it's at eight two while you waited. So you're still 400 grand proud. Another five months, now you decide to get realistic and you go to eight four and you finally transact. At 8 million flat to a buyer who beat the hell out of you. Eleven months of insurance, eleven months of paying a hanger. You paid subscriptions. You paid crew. Inspection accruals along the way. So let's call it another quarter million dollars out the door. Total damage versus pricing it correctly on day one. The better part of a million dollars plus a year of your life. To avoid a number that was true the whole time. And now With our new numbers on top of it being published in Legacy Midsize, the number you were chasing move another 5% farther away while you are arguing with it. I've watched this exact movie so many times I can recite it line for line, priced to the market you're in, not the one you remember from when you bought it. Okay, so where does the second half go? Where do we go from here? Here's what would flip this market. What would break it? And this time I have to grade my own homework first, because one of the things I said would happen already did. In January, what did I say? Well, I said prices would lag volume and eventually confirm it. And guess what? That happened. In segments where volume was worse. So the bear case I laid out at the start of the year is not a forecast anymore. It's been partially realized. In legacy mid-size and older light jets. What's left to forecast is whether it spreads. The bull case, let's talk about it. Rate relief, interest rates come down, actually arrives in financing dependent buyers, which is the most of the light and midsize market, come off the sidelines and decide they want to buy. The year end bonus depreciation push does what it always does and pulls a huge wave of closings into Q4. A hundred percent expensing is still the strongest single demand driver in the US market, and OEM delivery timeline stays stretched. Which keeps pushing impatient buyers into late model pre-owned aircraft at premiums. Stack all three and the second half clause back a chunk of the volume deficit. The September markdowns turn out to be the bottom for legacy aircraft, and 2026 goes in the books as a soft year instead of a really, really bad one. Okay, let's play devil's advocate, because that's what I do. Let's talk about the bear case. The markdown spreads. What worries me is that the September revisions hit the buckets with the weakest buyer pools first. And the mechanism that weakened those pools, deferral, trade down, fractional substitutions, none of that's reversed, and I don't think any of that's going to change. And if inventory percentages grind up through eight and nine toward ten in light and mid size aircraft, the next revision of prices reaches airplanes this one spared, which is going to be the late model light jets that held flat. The newest CJ4s and three pluses, and eventually the previous generation large cabin that's already down three and a half. Once three years of deferred sellers all reach for the same exit, the correction happens fast. And unlike this revision, the next one wouldn't be a clean split, it would be broad. So, two wildcards that don't fit neatly in either case. First, the macro grab bag. What's that? Good question. Tariffs. Geopolitics, an American election cycle, any of which can freeze discretionary buyers for a quarter at time, without showing up in any aviation specific data until it's already happened. Second, and this one is insider own industry, and that's MRO capacity, pre-buy slots at reputable shops are booked out months and months and months. There's no labor, and parts now are super, super slow, and the constrains transaction velocity all by itself. It's also producing the single most dangerous trend in this data set, when the dealer community accidentally admitted in print. Pre-buys are getting lighter to support transactions. Airplanes are changing hands with less inspections than at any time in recent memory. In a market where the average airframe for sale is older than it's ever been. And notice how that collides with what we just learned about the age penalty. The airplanes getting the thinnest pre-buys. Are disproportionately the older aircraft in the buckets that just got marked down the hardest. When those chickens come home, and they will, in the form of post-closing surprises and litigation, I'll be doing those depositions and you'll hear about it here first. So my honest read the bull case gets a partial win. Q4 will be better than Q2, I guarantee it almost always is, but full year volume still comes in well, well, well below 25. Legacy midsize stays the weak spot, and the split we just measured widens before it narrows. Specifically, I expect the next revision to take more off legacy midsize aircraft pricing and pre-2018 light aircraft to start reaching the previous generation large cabin more aggressively, and to keep paying the current production flagships as long as those delivery slots stay gone. I'll put that on the record, and we'll grade it in January's episode. That's the difference between this show and some silly press release you read. I show you my scoreboard either way, including the part where I was telling you prices were holding right up until my own book said they weren't. And let's talk about methodology. Let me give you a quick note. Because I hold everyone else to this standard, so I'll hold myself to it as well. The volume figures are same calendar point comparisons, all transaction types against in operation fleet counts. It's the full market. It's not some stupid member survey. Not that there's something stupid about members, but you get what I'm saying. Opinions do not tell you what's actually happening in the market. And this isn't a sentiment index, because I haven't talked about one asking price. The price figures are the September 1st fair market value revisions across the model year ladders in the VREF database, grouped by product generation rather than weight class alone. Which is why they show you something a weight class average can't. When someone quotes you a rosier number this quarter, I want you to ask them three questions now instead of two. Who's in the denominator? Who counted? And which generation of the airplane are we talking about? That's it. Those three questions, and you'll get the truth. So that's the mid-year state of the market. Volume is at COVID year levels and price revision that split this market in half rather than moving it in one direction. If this episode saved you from overpaying, overpricing, or overtrusting an average, you know what I'm gonna ask. Follow, like, subscribe, leave me a review. Please send this to one person who's buying an aircraft or selling, or even lending against a business jet or a piston aircraft or a turboprop. Especially anybody sitting on a legacy mid-size aircraft who still thinks it's 2022. And keep the meal bag coming. The best episodes of this show start with your questions, keep them coming. I answer them. Every episode has been about a question that has come in. With that, I'm Jason Zilberbrand. This has been the truth about the aviation market. The market doesn't care what you paid, it only cares what it's worth. And as of September 1st, it changed. And it changed its mind about a lot of aircraft. Until then, we'll see you next week. Fly safe and stay smart.