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I realize that each year it takes me longer to recover from the fourth quarter and to begin thinking about the year to come. Every December I think it cannot possibly get more complicated or busier, and yet it does. In 2025, transactions were generally more complicated as a result of (1) tariff uncertainty and complications (impacting aircraft for the first time in 50 years), (2) the uncertainty surrounding bonus depreciation, and (3) the implementation of the One Big Beautiful Bill Act of 2025.

After reflecting on my personal experience in 2025 and analyzing key data, there is a noticeable trend as we move into 2026. Specifically, fractional programs and co-ownership programs are a larger percentage of the total market than ever before. This segment’s growth is outpacing other segments in private aviation.

Those purchasing into fractional programs and co-ownership structures are not just new entrants to private aviation. Instead, an increasing percentage of the fractional and co-ownership program participants are owners who have owned whole aircraft and are selling their aircraft to transition into fractional or co-ownership. In some cases, owners are selling part of the aircraft they already own to create a co-ownership structure. Additionally, we are seeing long-standing flight departments increase their dependance on fractional ownership or, in some cases, entirely replace the in-house flight department with fractional ownership interests. I think there are several key factors influencing the decision to move towards fractional and co-ownership.

1. Availability & Flexibility  Fractional ownership programs include interchange programs so that if the specific aircraft owned or leased by the fractional customer is not available, they can fly on other aircraft in the fractional ownership program. In fact, most of the time a fractional owner does not fly on the specific aircraft they own. As a result of the interchange program, the aircraft available to fractional owners can be quite numerous.

This does not mean that fractional owners do not encounter delays due to unexpected mechanical issues, weather, or crew issues, etc., but the recovery time and cost is different in the fractional model. In the event of an issue with the specific aircraft assigned to a flight, the fractional program will work on a recovery solution. With a large fleet, this often means several options. Additionally, unlike whole aircraft ownership, there is no additional cost associated with the recovery as it is included in the fractional program.

2. Fixed Costs  Fractional ownership offers fixed pricing for a five-year term, with annual increases. For co-ownership programs the same can be true if the program is run by a charter operator, or at the very least, the effect of the variability of costs is less impactful when shared with one or several co-owners. Conversely, the maintenance costs vary from month to month with whole aircraft ownership. While various maintenance programs (engines, parts, avionics) are available, these programs do not always cover all maintenance and often times overpromise and underdeliver with regard to program coverage. Many of my clients have been affected by the supply chain issues with parts, particularly loaner engines, whether or not the aircraft is on a parts or engine program. It is important to note that not all maintenance programs are the same and some have an incredible repair and response rate.

3. Generational Wealth Transfer  The greatest generational wealth transfer is occurring right now. The transition is going to a younger generation and most often to more than one individual. As a result, having one aircraft available for multiple users may not be satisfactory. Instead, each recipient can purchase their own co-ownership or fractional interest and have more aircraft availability on a daily basis. The younger generation is more tied to school calendars and as a result has less flexibility when they can travel and that can make sharing an aircraft difficult.

4. Product Offerings  The program providers continue to grow with new co-ownership, and fractional programs being launched on a somewhat regular basis. For the more established fractional program providers, they have continued to evolve their program offerings, including larger primary service areas (where no ferry fee is charged) and luxury partnership opportunities.

5. Anonymity  In the United States, we have an owner-based registry system, which results in privacy issues for aircraft owners. There are solutions to help protect owner’s privacy but once an aircraft is associated with an individual, sometimes simply by having someone see an individual board a particular aircraft, the privacy protection may have been lost. With the fractional ownership program interchange structure, owners are not flying on the same aircraft each trip, and therefore allows fractional owners more anonymity. Some fractional providers have also started filing requests through CARES to remove all fractional ownership information from the FAA website.

6. Aircraft Management  Traditional turnkey, full-service management companies have disappointed a segment of whole aircraft owners. The disappointments stem from incorrect budgets, inability to control costs, less charter revenue than promised, and a lack of transparency. Unfortunately, there are management companies that produce proposals and budgets for aircraft that are significantly flawed.

Individuals who are new to private aviation, and who have not retained unbiased consultants or attorneys, sometimes assume the information received from so-called experts is correct. This leads to disappointment and the sale of the whole aircraft in exchange for a reliable alternative with fixed pricing. Additionally, whole aircraft owners who are transitioning to fractional ownership or charter have expressed that certain management companies have lost the ability to provide luxury, customized services for aircraft owners.

There are some great management companies, but when their proposals show actual numbers and another management company’s proposal show numbers that are too good to be true, the owners sometimes select the too good to be true management company and are left disappointed and dissatisfied with whole aircraft ownership as a result.

While this is not a complete list of the reasons we are seeing a shift in the market, it does capture the majority. When I started in the industry there was a rule that said anyone who flew more than 200 hours a year should consider whole aircraft ownership. While there is still a financial analysis that can predict when owning a whole aircraft would make financial sense, the analysis cannot necessarily compute all of the soft factor items, like privacy, scheduling, and luxury services, that most of my clients are considering.

Historically, the fourth quarter has been the busiest period for aircraft transactions. However, 2025 is proving to be an exception. The surge in activity has begun unusually early, with August already showing signs of the traditional fourth-quarter rush. The shift is not coincidental – it is the result of several converging factors that have created a sense of urgency among buyers. Chief among these are the reinstatement of 100% bonus depreciation under the One Big Beautiful Bill Act (OBBBA), labor shortages affecting inspection availability, and ongoing uncertainty surrounding aircraft tariffs.

The OBBBA permanently reinstates 100% bonus depreciation for qualified property placed into service after January 19, 2025 under Section 168(k). This applies to new and pre-owned aircraft, provided they are predominantly used in the United States for qualified business purposes. It is important when establishing the aircraft ownership and operating structure to avoid related party leases or personal use, which can limit qualified business use. This means businesses can deduct the entire purchase price of an eligible aircraft in the year it is placed into service.

Many potential aircraft buyers were waiting to see if bonus depreciation was going to return to 100% this year, as it was in the process of being phased down to 40% under the Tax Cuts and Job Act of 2017. Now that bonus depreciation is back at 100% many buyers who were waiting are now very active in the market.

The newly motivated buyers are learning that aircraft transactions have become more complicated for several reasons. First, there continue to be increasing labor shortages at the service centers that provide pre-purchase inspections. Obtaining a slot in August is not usually challenging but we are currently seeing pre-purchase inspections being booked out by a month or more. There are more transactions and fewer people to do the work which is increasing the wait time for an inspection slot.

Second, compounding the issue is the fluid nature of international tariffs, which require careful analysis for each transaction. If the aircraft was manufactured in the United States and was always based and flown in the United States, then tariffs should not be a concern. However, aircraft manufactured, based, or modified outside of the United States may be subject to tariffs, adding complexity and potential cost to the buying process.

Given these factors, industry professionals – including lenders, attorneys and brokers – are advising buyers to begin the acquisition process immediately if they intend to place an aircraft into service in 2025 and benefit from bonus depreciation. The earlier than usual spike in transactions is a signal to  gather a team to start the transaction now.  Read more in my previous article:

https://soaraviationlaw.com/aircraft-acquisition-it-takes-the-right-team/

I have written many times about the importance of assembling the right team when acquiring an aircraft. This team typically includes the buyer, an aircraft broker, escrow agent, lender, aviation attorney, tax advisor, insurance broker, and a management company or flight department. One essential, but sometimes overlooked, member of this team is the technical representative. Too often, the technical representative is not brought in until the pre-purchase inspection. In reality, their role should begin much earlier – at the very start of the acquisition process. A technical expert can provide critical insights throughout the transaction, from market analysis to delivery.

Partnering with a technical representative at the outset allows for a more informed aircraft selection. Working alongside the broker, the technical expert can help evaluate aircraft options – not only based on mission and budget, but also through an early review of aircraft records. This initial technical review helps identify potential performance issues, maintenance concerns, or damage history – factors that should be understood before signing a purchase agreement. If the agreement is signed early, it should allow the buyer to terminate the transaction without penalty after this preliminary document and visual review, should the findings warrant it.

Once a specific pre-owned aircraft is selected, the technical representative plays a critical role in defining the scope of the pre-purchase inspection. Their deep knowledge of the aircraft type and familiarity with its maintenance history enable them to develop a focused, meaningful inspection plan. Key considerations include: (i) recent maintenance and inspection history, (ii) the facility where prior work was performed, (iii) known issues specific to the aircraft model, (iv) standard pre-buy checklist items, and (v) upcoming maintenance requirements. The agreed inspection scope should be attached to the purchase agreement as an exhibit to avoid disputes later.

The purchase agreement should outline the delivery conditions; requirements the aircraft must meet before the buyer is obligated to close. These conditions must be reviewed (and ideally negotiated) by the technical representative. Their prior document review and inspection planning will inform what conditions are reasonable and necessary. For instance, if upcoming inspections are due within 30 days of closing, the technical representative may advise including a delivery condition requiring the seller to complete them prior to closing.

Once the pre-purchase inspection begins, the technical representative should have a significant presence at the inspection facility, actively overseeing the process. Their role is to monitor and verify that inspection items are completed properly, communicate with the seller regarding real-time resolution of discrepancies and keep the buyer’s team updated on the status and major milestones. Other team members will be working on items such as hiring a management company, financing the aircraft, locating hangar space and hiring crew. The technical representative’s consistent presence helps ensure transparency and avoids costly surprises later in the process.

At the end of the inspection, the facility will issue a final report. Based on the findings, the buyer must decide whether to proceed and identify any discrepancies that the seller must resolve under the purchase agreement. This is where well-crafted delivery conditions, reviewed early by the technical representative, play a critical role in determining which discrepancies the seller is obligated to fix.

Another key area where technical guidance is invaluable is in determining which maintenance programs should be included or added to the aircraft at the time of purchase. Depending on the planned use by the new buyer and where the aircraft is in its life cycle, the programs that had been selected and active on the aircraft may not be the best options for the buyer. The technical representative can help determine which programs to keep, modify, or add, especially since program offerings and terms evolve over time.

Some people in the industry believe that technical representation is unnecessary when purchasing a new aircraft. I disagree. Even new aircraft acquisitions benefit from expert oversight; starting with model selection, continuing through the manufacturing process (with milestone inspections), being part of the aircraft acceptance process and helping with program and subscription options that are offered as part of the purchase process.

Your technical representative may be an employee of your flight department, a representative of your management company, or an aircraft consultant/broker company. But if your team lacks someone with specific experience in the aircraft model being acquired, you should bring in the right expert. In my experience, the cost of engaging a qualified technical representative is never something the buyer regrets.

For decades, I have been concerned about the fact that we have an owner-based aircraft registry system in the United States as it is too easy to learn who owns an aircraft and subsequently track it. I was always concerned it would take a tragic event before any changes were made. However, I was encouraged when the Federal Aviation Administration (FAA) Reauthorization Act of 2024 mandated changes to allow for data privacy. The implementation of the mandated changes started on March 28, 2025.

On March 28, 2025, the FAA provided notice that it had implemented Section 803 (Data Privacy) of the FAA Reauthorization Act of 2024 through changes made in the Civil Aviation Registry Electronic Services (CARES). Private aircraft owners can now electronically request that the FAA withhold their private aircraft registration information from public view on public FAA sources and websites for noncommercial flights. This private information includes name, address, email address and telephone number that are usually included on the aircraft registration application.

To complete this request, aircraft owners will need to establish an account on the CARES website. The website is https://cares.faa.gov/home. On the home screen there is an orange banner that describes the new privacy feature and step-by-step instructions are available.

As with things that are new, there will be a transition period where we learn how to use this process and understand its implications. For example:

• When the request is made, who is considered a private aircraft owner?
• Can the management company/operator submit the request on the aircraft owner’s behalf?
• What needs to be included in the request?
• Are there still ways for title companies to access the data in order to prepare title searches?

The FAA will publish a request for comments on the Federal Registry to seek input on these changes. Before we can understand the impact of the changes, we need to fully understand what data is redacted and if the redacted data can be accessed by certain stakeholders, including lenders and title companies. Interestingly, the FAA also states on their website they are evaluating whether to default to withholding the personally identifiable information of private aircraft owners and operators from the public aircraft registry and provide a means for owners and operators to download their data when needed.

There are still a great number of unknowns with the changes, but the system is currently active and requests by private aircraft owners to withhold private aircraft registration information from public view can be made now.

Last month we explored purchasing a foreign registered aircraft and the necessary steps to move the aircraft onto the United State registry. This month we will examine the steps when an aircraft owner is selling their aircraft to a buyer who will be moving the aircraft from the United States registry to a foreign registry. While each country is different, certain key factors should be considered when an aircraft is being deregistered from the United States registry and registered elsewhere upon closing.

1. Export Certificate of Airworthiness The buyer will likely require, under the aircraft purchase and sale agreement (the “APSA”), that the seller deliver the aircraft with an export certificate of airworthiness. The cost of this should be borne by the buyer. The inspection facility will be responsible for producing the export certificate of airworthiness. As such, when selecting the inspection facility, it is imperative to understand the inspection facility’s experience with the types of inspections necessary to produce an export certificate of airworthiness. In addition, when the export certificate of airworthiness is issued, there may be exceptions listed on the certificate. As a seller, you do not want to be obligated to pay to resolve any exceptions. Therefore, if the buyer is allowed to resolve any exceptions prior to closing, necessary protections need to be built into the APSA.
2. Aircraft Improvements Prior to Closing Under the APSA it must be clear that the aircraft is being sold as a United States registered aircraft. Any modifications to the aircraft that may be necessary in order for the aircraft to be registered in a foreign jurisdiction are (i) completed after the sale occurs and (ii) at the expense of the buyer. However, circumstances and/or negotiations of the APSA may not allow for the foregoing limitations. If certain modifications are permitted prior to closing, protections for the seller (in the event the closing does not occur) need to be included in the APSA. Furthermore, prior to seller committing to such obligations, it is important to understand the amount of time any modifications will take and parts availability, as the timing of closing could be delayed as a result of the modifications. As an example, I have been involved in several transactions where the parts necessary to convert the aircraft were not readily available and such delay impacted the closing date.
3. Customs Export Aside from the deregistration process with the United States registry (FAA), there is a customs export process that must be accomplished with a United States customs broker. Seller has a duty to make sure the aircraft is property exported from the United States. The APSA should designate who hires and pays the United States customs broker, what role the parties will assume in the export process and, if possible, identify the specific customs broker.
4. Closing Location The closing location of the sale will be important to both parties and will be negotiated and documented in the APSA. Generally, as a seller you do not want to have the aircraft moved outside of the United States to a foreign jurisdiction prior to closing due to the risks of not closing and unfamiliarity with the closing process and tax consequences in a foreign jurisdiction.
5. Funding Another consideration to clearly document in the APSA is the timing of the deregistration and release of funds. A seller would not want to go through the process of deregistration of the Aircraft before receipt of funds. Conversely, the buyer would not want to release funds before the aircraft is deregistered. Having a reliable and knowledgeable escrow agent and clear closing process set forth in the APSA, including irrevocable escrow instructions, can often help bridge the gap between the parties’ desires.
6. Title A seller of a United States registered aircraft, that will be deregistered and transferred to a foreign jurisdiction as a part of providing clear title, may be asked to provide complete chain of title documentation (back to birth bills of sale) and a legal opinion on title. Prior to committing in the APSA to provide complete chain of title back to the original manufacturer, the seller shall ensure this is something that can be obtained. If the aircraft has always been registered in the United States, a complete chain of title will be available through the FAA registry records. However, if the aircraft has previously been on a foreign registry, the documentation may not be in the possession of the current seller.
7. Invoice For the registration process and import process in a foreign jurisdiction, an invoice for the sale of the aircraft may be required. This is not a standard document in a domestic sale of a pre-owned aircraft. As a result, seller should confirm if buyer is going to require an invoice. If an invoice is required, the form of the invoice should become an exhibit to the APSA and finalized as part of the other closing documents just prior to the sale.

As discussed in Part 1, cross-border transactions are more complicated but with the right team behind the transaction they can result in the best outcome for both the buyer and the seller.