Latest / VREF | The Truth About the Aviation Market / Oshkosh: Where Dreams, Deals, and Bad Numbers Collide | EP 48
Transcript
- Addison: Next week, more than 700,000 people and 10,000 aircraft descend on a small city in Wisconsin. For seven days, Whitman Regional becomes the busiest airport in the world. And here's what most people don't realize Oshkosh isn't just an air show. It's the largest aircraft transaction event on the planet that nobody calls a transaction event. Deals get done in the campgrounds, deals get done in the vendor hangers, deals get done standing in line to buy a Bratwurst, and most of them get done with a handshake. And a number somebody pulled out of thin air. So today we're going to talk about what EAA really means, how to buy or sell at Oshkosh without getting burned, what an experimental aircraft is actually worth, and our new VREF marketplace, which we built to bring transparency to exactly these kinds of deals. So let me welcome you back to the truth about the market. I am your host, Jason Zilberbrand. I'm president of VREF. I've appraised nearly every type of aircraft out there. My clients range from private owners to lenders, insurance companies, operators, Fortune 500 companies, law firms, government agencies, including the FAA. And I've owned my own aircraft, I've operated my own aircraft, I bought them and sold them for years, I even financed them, and I have spent decades watching how this market behaves, especially when conditions change. So when I talk about the aircraft market, guys, this is not theory, it's not social media commentary. And it's definitely not some scraped internet data wrapped in a chart, but it is real-world transactional experience. And I also want to say this podcast has no sponsors, which means there's no advertisers. And that also means there's no outside influence because nobody pays for my opinions here and nobody dictates my conclusions. And that's because aviation is a capital-intensive market and the market punishes misinformation every single time. And if you're new here, VREF has been aviation's most trusted source of aircraft values since 1994. We run valuations on more than 900 aircraft, almost a thousand of them to be exact. And we do almost a hundred thousand aircraft valuations every single month. So that means we track more than everybody. And that also means that every major lender uses our data. And so look, when I tell you what an airplane is worth, I'm not guessing. It's the same data the bank is looking at when they decide whether or not they're gonna underwrite your loan. And if you caught episode 45 on the confidence recession or episode 46 on the $110,000 engine upgrade trap, today builds on both of those episodes. Because Oshkosh is where confidence shows up in person and where owners make upgrade decisions on the spot at a vendor booth. And before we talk about a single dollar figure. I want to talk about what this event actually is. Because if you've never been to EAA, you might think Oshkosh is just an air show. But let me tell you, it's not only just an air show, it's the oldest air show. It's the biggest air show. But that's not just what it is. Let me tell you what separates Oshkosh from everything else in aviation. People don't drive to it for the most part. They fly to it in their own aircraft. Airplanes, a whole bunch of them, built a lot of them with their own hands. And they don't check into a hotel. They pitch a tent under the wing and camp next to the airplane for a week. Communal bathrooms, the whole nine yards. Doctors, farmers, engineers, retired airline pilots, kids who scrape together every dollar for Avgas, all living in a field together. Think about that. For one week a year, they all live in a field together, coffee at somebody else's campsite, walking in the rows at dusk looking at airplanes with total strangers who aren't strangers by the second sentence. Because you already share the same thing that matters. Nobody does that for a hobby. Guys, you don't sleep on the ground for a week and call it a hobby. You do that for something that's in your blood, something that runs deep into your soul. And the people who have it in their blood don't keep it to themselves. They bring their kids, their grandkids. They put a 10-year-old in the cockpit and let her hold the yoke. And 25 years later, that kid flies in her own airplane with her own kids. That's the machine that keeps general aviation alive. And Oshkosh is where you can watch it run in real time. So, what does EA mean to me? Well, I think it means the same thing to a lot of people because it inspired generations of Americans who look up at the sky and dream bigger. What begins as a week of airplanes in Oshkosh, Wisconsin, often becomes the spark that launches a lifetime of aviation passion. History. Innovation. And education come together in a way that cannot be replicated anywhere else. I've been to every show all over the world. I'm telling you, this one is it. This is it. There's nothing better. And for kids, EAA is so much more than an air show. It's a chance, like I said, to sit in a cockpit, to shake hands with an astronaut, or an engineer, or a mechanic, or a military pilot, or an airline captain, or sometimes even a navy SEAL, and to discover that aviation just isn't something you watch, it's a career and it's attainable. Through the Young Eagles program, millions of children have taken their very first flight, opening a door to possibilities that may have never been imagined. Guys, I was one of those kids. For many pilots flying today, the first ride at an EAA event was the spark. It ignited a career path, a lifetime of passion. EA gets this, by the way, it's why kids under eighteen get in for free. And EA preserves America's aviation history like nobody else. It's the only place you get to see World War II fighters, Vietnam era aircraft, cutting-edge military jets, home builts, the latest EVs, and experimental designs. You can literally watch a P-51 Mustang taxi alongside a modern F-35. Eighty years of aviation, wingtip to wingtip, it reminds us that everything we fly is built on the achievements of the people who came before us, while constantly looking toward the future. And maybe, most importantly, EAA teaches values that extend far beyond flying. Building or restoring an aircraft requires patience, it requires craftsmanship, discipline, substantial problem solving, and teamwork, and those lessons shape better engineers, better mechanics, better people. At a time when America needs more pilots and innovators, more than ever, EAA is what continues to ignite that passion and reminds me every child who walks through those gates is That the sky is not the limit. Now, I'll say the honest thing too, because that's what this show is. It's getting more expensive and more difficult to get there, right? And I get it. But that's a real problem because the whole magic of this event, that's why it's always belonged to the regular people. The day Oshkosh becomes a show only that comfortable people can afford to go to is a day that it starts losing the thing that makes Oshkosh Oshkosh. But let's just set that aside for today. Here's why I care personally. EAA is where I saw general aviation up close for the first time. My father took me when I was in high school, and two moments have stayed with me ever since. So let me tell you a couple of the stories. If you were standing on the flight line at Oshkosh in the summer of 97, you witnessed one of those moments aviation people still talk about. 97 was the 50th anniversary of Chuck Yeager breaking the sound barrier, October 14th, 1947. Jaeger was the chairman of EAA's Young Eagles program at the time, and one of Airventure's biggest attractions. But here's the thing he didn't show up to sign autographs, he showed up to fly. And I was there on the flight line when he flew his P 51 D Mustang, glamorous Glenn III honoring the Mustangs, he flew with the 363rd Fighter Squadron in World War II. It wasn't his original airplane because that was lost in combat. But guys, nobody was checking serial numbers. And pass after energetic pass down the runway, this man was in his seventies, and he flew that Mustang with the same smooth, disciplined style that made him famous. Fast, low passes, I swear he was right over my head, tight military style turns. There was no show boating, just precise flying. Jaeger never looked like he was performing. He looked like a combat pilot back in his element. And one of the guys next to me said, Chuck Yeager in that pifty P fifty one was probably the coolest thing. I've ever seen in my life. The airplane was impressive. A Merlin at full song will rearrange her internal organs. But it wasn't the airplane, guys, it was the guy. And ninety-seven kept on giving that year because something else I got to check off on my bucket list was I got to see the Blackbird because it was there too. What else do you where else do you get to see Chuck Yeager in a Mustang doing dog fights? And an SR-71 in the same week. I mean, it just doesn't happen, right? So the second story, and actually this was much more recent, but it was such a special day, it'll stay with me forever. Air Venture 2018. It was a Wednesday afternoon. We had a surprise visit from the Air Force Thunderbirds. The announcer has the whole crowd focused on them, and then completely unexpected, four Navy Blue Angels, F-18 Hornets, roar right over the field in tight formation. Guys, the Blue Angels weren't on the schedule at all that year. They were transitioning through the region and they called. A lot of people don't know this. The Blue Angels and Thunderbirds will do strategic flyovers at other events during those regional transitions. Somebody picked up a phone and the whole thing got coordinated as a surprise. When I tell you how amazing this was to see both elite U.S. military demonstration teams over the same field at the same time, it's extremely rare. I don't believe it's happened since. And I don't know that it'll ever happen again, unless somebody plans it and pays a whole hell of a lot of money for it, because that Wednesday happened for free over a field in Wisconsin in the middle of nowhere. And that's the point of both stories. Chuck Yeager didn't fly passes over just any air show, and the Blue Angels didn't buzz over any field. Oshkosh is the place that legends themselves want to be. That's what 70 Years of Passion builds. And this year it comes full circle for me. This year I hand the torch. I'm bringing my own son to EAA for his very first time. My father walked me through those gates when I was in high school, and now I get to walk my son through them as well, and I keep wondering, will it do for him what it did for me? Will he catch the spark the way I did? The way so many others have? I don't know, that's the honest answer. You can't force it, but I know there's no better place on earth to find out. Hold on to that for the rest of this episode. Underneath every valuation, every listening, every day on market stat that we'd like to talk about is somebody else like that. There's a kid on the flight line, right? Somebody's dream with a serial number on it. That's why getting the value right matters. It's not a spreadsheet exercise. It's somebody's blood and soul with a price tag on it, and they deserve the truth. All right, let's talk about the market because Air Venture runs July 20th through the 26th. Last year set a record, 704,000 visitors to be exact from 94 countries. And for an appraiser, Oshkosh is the single best real-time sentiment indicator General Aviation has. Forget the surveys, although we're gonna be sending one out soon. Go walk the flight line. Count the for sale signs taped inside the canopies. In the hot market, airplanes have deposits before owners finish tying them down. And the softening market, and we've talked about the confidence recession, you see more signs, longer conversations, and sellers who suddenly want to hear what you'd offer. So when you watch the vendor booths too, avionic shops, paint shops, interior shops, when the panel upgrade booths are writing orders three deep, owners are investing in an airplane they intend to keep. When they're quiet, owners are deferring those expenses. And deferred upgrades show up in my appraisal reports 12 months later. As squawks or value hits. And remember, episode 46, not every upgrade returns its cost. So don't sign that $110,000 avionics contract at the booth because the show discount expires on Sunday. The airplane doesn't know it's at Oshkosh. The market doesn't care about your show discount. And trust me, they'll still honor it. They'd love to sell it to you. And watch the announcements. Every OEM saves them for Air Venture. And here's the appraiser's angle nobody wants to talk about. So I'll give you a little insight. Every new model announcement instantly prices the use fleet behind it. When a manufacturer announces the next iteration, the previous generation moves down a rung on the ladder that same afternoon. If you own the outgoing model, the announcement costs you money while you are standing there applauding. Now the practical part. If you're buying at Ashkosh, Understand the psychology working against you. You've been walking the flight line for three days in 110 degree heat and 100% humidity, surrounded by 700,000 people who love airplanes. I think that's what we call emotionally marinated, right? That gorgeous with the fresh paint is calling your name. The owner is right there, and he seems like a great guy. Guys, they're all great guys at Ashkosh. But here's the rule Ashkosh is where you find the plane. It's not where you should close the airplane. Shake hands, put down a refundable deposit, subject to a pre-buy, of course. But the deal gets done at home, with a proper logbook review, and a proper title search, and a pre-buy inspection at a shop you choose, not one that he does, and evaluation from data, not campfire comps. Somebody's brother in law in 2022 paid X for an aircraft and that number's been inflating with every retelling like a fish story. Pull the actual data. That's a two minute exercise. And I'll show you in the last segment how the marketplace makes it even faster. If you're selling, price it right before you leave home. The show gives you seven days of the most concentrated qualified buyer traffic in the world. If your airplane is priced at fantasy retail, you're just going to burn that traffic. Every serious buyer walking that flight line is checking your number against the data on their phone and they're going to move on. If you Priced it at the money you can generally sell an airplane in a week. Overpriced, you just paid for the camping. And the paperwork. Bring your logbooks. Or don't bring your logbooks. Bring them digitized, right? And that's what I mean. Get them copied. Bring a digital copy. An airplane at Oshkosh with complete organized logbooks and a spec sheet is a different product than the same airplane where the logs are at home in a box and complete disarray. And I've said it a hundred times on this show. The logbooks are the airplane. So go get them digitized. This is a great time to do it. Scan them all in, go to FedEx, sit there, watch them do it, PDF it, and bring a PDF copy. One more thing for the market watchers. Regular listeners know my thesis. Transaction volume precedes price, and Oshkosh week is a volume event. The deals initiated that week are a leading indicator for the fall market. So when you get home, ask yourself. Were people buying? Were people kicking tires? Were they just looking? The answer is worth more than any forecast you're gonna read. So let's talk about something at the heart of Oshkosh, because it's not warbirds and it's certainly not jets. And honestly, it's kind of crazy how many business jets show up at this thing now. maybe they're a little out of place, I don't know. But you know what Oshkosh is about? It's the home built. That's what it's about. Thousands of amateur built aircraft flown in by the people who built them. It's the soul of the event, guys. It is, I promise you without question, the hardest corner of general elevation to value are home builds. If somebody calls me about 182, I have decade upon decade upon decade of clean data. Serial number ranges, model years, known configurations. I know every 182 out there. I know how it started its life, more or less. And let me tell you something. No two home builds are the same. The same kit, same year, one built by a retired aerospace engineer over nine patient years in a climate-controlled shop. The other built in a hurry by a guy who really wanted to fly and figured close enough was good enough. Same model, wildly different airplanes, further apart in quality than a Cherry 182 and a corroded one. So here's the framework. The five levers, if you will. One, and it's always the first. This is top priority. Always number one. Builder quality. It's the number one driver, full stop workmanship. Period. Adherence to plans, documented deviations. A builder log with photos is worth real money at resale. If you're building one right now, let me tell you something. Photograph every step and take copious notes and put that into a file. Make a report out of that. You're building the provenance file for a future appraisal, I promise you. Not only will I thank you, but every potential buyer will as well. All right, rule number two: the kit maker. Establish manufacturers with really big fleets and active type communities, and available parts hold value dramatically better than those orphan designs. The market wants what the market knows, and that's really important. Three, engine and prop provenance. Is it a genuinely certified engine with traceable history or a clone or an auto conversion? Look, I'm not saying there's anything wrong with the alternatives on a flying fund basis, right? But the resale market prices things differently. And so does the insurer. And it's the same logic for the prop guys. Number four, who did the flying and how much? Phase one, flown off properly and documented, any incident history, a home built with 400 trouble free hours. And clean annual condition inspections, in my opinion, is proven. A home built with 40 hours in 12 years is telling you a completely different story, and you really need to find out what that story is. And number five, the second owner discount. And this one surprises people. When you can buy the builder, the builder holds the repairment certificate for the aircraft and you can do their own condition inspections. You, the second owner, generally can't. You're paying an AMP for that inspection every year. That's a real reoccurring cost difference that belongs in the value conversation, at least in your budget, and campfire pricing never includes that. Add harder financing, guys, so few lenders play in this space because of what I just said. If you don't know who built it, and this is the problem, when someone says Cessna, I know who built it. When someone says Piper, I know who built it. When someone says Mr. John Doe, I don't know who built it, it's a problem. So here's the structural problem. The experimental market has historically had the worst price transparency in all of aviation. Thin comps, no two are alike, listings are scattered across classified sites and Facebook and type club forums, and it's a cork board at the FBO. Asking prices that bear absolutely no relationship to selling prices because people are approaching these things like trying to recapture their labor costs on a 15-year build. Sellers anchoring on the one fantasy listening that's been sitting unsold for two and a half years. That airplane isn't the market, folks. That airplane is the guy that the market is laughing at. And sellers price pricing nine years of their life instead of an airplane. I I I understand it. I sympathize with it. However, the market does not. The result? Buyers overpay for shiny and underpay for quality because they can't tell the difference from a listing, and lenders and insurers who can't get comfortable with the data either say no or price for maximum uncertainty. So bad data doesn't just cause bad deals, it causes no deals. Think about that. Fix the data and the market moves, which is exactly why we built what I'm about to talk to you about. For 32 years, VRef has answered one question. What is this aircraft worth? The marketplace closes the loop on the next one. Okay. Now what? Inside VRef Online, let's talk about it because I'm so excited. This is absolutely the coolest thing you guys are ever gonna see. The marketplace ties live listening data directly to valuation data. Our researchers track every single aircraft listed for sale across the classified sites and And tie those listings right into our platform, which means you can pull up any aircraft for sale right inside of V ref. You're seeing the market and you're seeing it live. How many are for sale right now? By make, model, year. There's so many filters. You can choose literally anything. And we update everything in real time as it happens. And best part, you can connect directly with the guy who owns it. Or the broker who's representing it. The percentage of a fleet that's for sale is one of the most honest indicators in the business. 2% listed, seller's market. Get in line. 8, 9, 10, 12%. I don't care what the asking prices say. The model is under pressure. You used to need an analyst to see that. Now it's on the same screen. Now you can you can look at all you want. Now put it at Oshkosh and you see why I built the show around these two topics. You're standing on the flight line, for sale sign in the window, owner in a lawn chair, old world, you make small talk, he names a number, and your entire negotiation database consists of vibes. And that one your buddy mentioned that closed. In the new world, new school, 30 seconds on your phone, value range for this model, year and equipment, right in v ref and Everyone currently listed in the country for sale, how long they've been sitting there. The one that's had three price drops since March, hello leverage. Now you can have a real conversation standing right there in the grass. And sellers, trust me when I tell you this cuts your way too, and honestly, I think it helps sellers more than anybody. Because if your airplane is priced right, the data can prove it. It justifies it. You're no longer defending your number against a low ball. anchor to some distressed listing three states away. You pull up the same screen and show the buyer exactly why your number is the number. See, transparency doesn't kill deals. Transparency kills bad ones. Fairer deals close faster when both sides trust the data. For the experimental crowd, this is the segment that needed it most. Scattered listings and thin comps were the whole problem, and aggregation is the answer. When every listing is tied in to one view, tied to fleet data, Home-built pricing stops being folklore and starts being a market. And that's why you're going to start seeing a whole bunch more that we were never able to track inside of VRef. And it's broader than just buyers and sellers. Owners not even in the market can watch their model supply picture and time their exit instead of guessing. The difference between selling into a 2% listed and an 8% listed is real money. And volume moves before price. So you'll see it coming. Brokers get live market intelligence and comp support in the same platform their lenders are already using. Lenders and insurance companies get the collateral picture from the source they already trust. And uncertainty is what kills approvals. And this removes uncertainty. And appraisers, these are my people. They get the difference. They get the difference between an opinion and a defensible opinion, right? That's the difference. One's a guess, the other one's defensible. So We're hoping we're gonna get it out this week. That's the plan. The plan is to go live just before Oshkosh. We're taping the week before Oshkosh. This will go live on Tuesday or Wednesday, the 21st or 22nd. And so my goal is to have this out just before the the show starts. Every healthy market in the world runs on a transparent, liquid, trustworthy information cycle. Equities, real estate, used cars. For crying out loud, General Aviation has run on gut feel and gossip for 70 years, and every party to a d transaction has paid the tax on that. And bad buys, blown sales, dead deals, and loans that never get written. The marketplace is this show's mission as a product. The truth about the market, not the truth as of last quarter's guidebook, the truth as of this morning. So three takeaways. One, if you're going to air venture, July 20th through the 26th at Whitman Regional. Go with a plan. Find airplanes there. Don't close them there. Watch the for sale signs. Watch the booths. Watch what people are buying and not just admiring. You'll come home with a better read on the market than any broker report can give you. And bring the kids because they're free if they're under 18. Two, in the experimental market, builder quality, documentation, Kit maker strength, engine provenance, and the repairment certificate are the value drivers. Photograph everything if you're building one. Document everything if you're building one. The provenance file for the airplane you're building is your future resellability. Three, stop negotiating with vibes. The data exists now, guys. Values, live listenings, days on market, fleet supply, one screen, V ref online. Because I promise you. The guy on the other side of the deal, he's using it. And I will tell you, I'm gonna be there. I'm gonna be at Oshkosh. So I'm planning on being there the 22nd. I as I said, I'm taking my son. So look me up, shoot me a text message. I will buy you a brat. Worst case, I'll meet you and have a cup of coffee. If this episode helped you, please do me a favor. Share it with your camping group at Oshkosh and check out episodes 45 and 46. And as always, for accurate, defensible aircraft valuations, trusted by lenders, insurance companies, attorneys, operators, and aviation professionals worldwide. Get started with vref online. Subscribe today. Head to vref.com. Take a look at our marketplace before you walk that flight line. I'm Jason Zilberbrand. This is the truth about the market. If you're going to be at Oshkosh, I'll see you there. Until next time, fly safe. And stay smart.