Asia Pacific Business Jet Fleet Report

Beijing Seoul Penglai

Chengdu Shanghai

Shenzhen Hong Kong

Bangkok Manila

ABOUT ASIAN SKY GROUP Asian Sky Group Limited (“ASG”) is headquartered in Hong Kong with offices throughout Asia. It has assembled the most experienced business aviation team in the Asia-Pacific region to provide a wide range of independent consulting services to both fixed-wing and rotary-wing aircraft owners. Asian Sky Group provides access to a significant customer base around the world with the help of its exclusive partners: Avpro Inc., the largest business jet brokerage firm in the US; and AVIC International Development Corporation, the largest state-owned aviation enterprise in Mainland China.

Asian Sky Group is backed by SEACOR Holdings Inc., a publically listed US company (NYSE: “CKH”) with over US$ 1 billion in revenue and nearly US$ 3 billion in assets, and by Avion Pacific Limited, a Mainland China-based general aviation service provider with over 20 years of experience and 6 offices and bases throughout the country.

Asian Sky Group provides its clients with the following aviation consulting services: 1) AIRCRAFT SALES, including acquisition or marketing, selection of aircraft, asset financing, ownership structuring, registration and operator selection, inspections and appraisals, and contractual support; 2) COMPLETION MANAGEMENT, including cabin definition, facility selection, completion oversight, delivery and regulatory compliance, and contractual support; 3) OPERATION OVERSIGHT, such as invoice analysis and owner representation; 4) LUXURY CHARTER SERVICES; 5) SPECIAL PROJECTS and 6) TRANSACTIONAL ADVISORY.

CONTRIBUTION Asian Sky Group would like to acknowledge the gracious contributions made by numerous organisations, including aircraft operators, OEMs, aviation authorities, Jetnet, Flight Global Ascend and superhero.ph in providing data and support, without which the information presented in this report could not have reached its level of accuracy.

Should you wish to reproduce or distribute any portion of this report, in part or in full, you may do so by mentioning the source as: “Asian Sky Group, a Hong Kong based business aviation consulting group”.

Thank you for your interest in this report. We hope you'll find the information useful. If you would like to receive further information about our aviation services, please contact us at [email protected] or visit us at www.asianskygroup.com.

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 INTRODUCTION Asian Sky Group (ASG) is pleased to present the first of its kind Asia Pacific Business Jet Fleet Report for Year-End 2014. The report follows ASG’s previously established Greater China Business Jet Fleet Report, first published in March 2012. For copies of ASG’s various industry reports, please visit us at www.asianskygroup.com.

This report provides the most complete coverage of the business jet fleet in the Asia Pacific region, “Asia Pacific” being defined as Asian countries in the Pacific Ocean region. Therefore, northern/central Asia and Oceania countries such as India, Australia or New Zealand are not included. Countries covered in this report include: Greater China (China, Hong Kong, Macau, Taiwan), Japan, South Korea, Thailand, Cambodia, Myanmar, Philippines, Malaysia, Brunei, Singapore, Indonesia and Papua New Guinea.

TABLE OF CONTENTS

EXECUTIVE SUMMARY AND KEY FINDINGS…………………………………….…………….3

FLEET BREAKDOWN – ASIA PACIFIC Fleet by OEM and by Country…...... ……………...…………...... 6

Top-20 Operator Fleets by OEM...... ………………………...... 22 Aircraft Models by Region…………….………………………...... 24 Fleet by Size Category……………...... ………………………...... 36 Fleet Registrations....……………………………………………...... 38 Fleet Age Distribution...... …………………….…………………...... 41

FLEET ADDITIONS – ASIA PACIFIC...... ………………………………………….…...... ……48

GREATER CHINA – MARKET TRENDS...... …...... ………………………...... ……54 Net Fleet Growth 2012-2014...... 55 Aircraft Additions & Deductions...... 61 Foreign Aircraft Operation Highlights...... 70 Forecast for 2015...... 71

SUPPORT INFRASTRUCTURE – ASIA PACIFIC Maintenance Service and Training Centres..…………...... 73 Fixed-Base Operators (FBO)..…………………………...... 81 Financing Institutions...... …………………….…………………...... 83 Legal Firms...... 83 Compeletion Centres...... …………………….…………………...... 84

CHARTER AIRCRAFT AVAILABILITY.....……….……………………………..…………....……88

PRE-OWNED AIRCRAFT GLOBAL AVAILABILITY……………………...……...... ……91

AIRCRAFT MODELS POSITIONING……………………………………………………….……...92

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 1 ASIA PACIFIC BUSINESS JET FLEET

2013 2014 647 744 +15% 297

256

41 44

21 Japan +7% 114 20 South Korea +5% 98

China +16%

15 17 Taiwan +13% 1 Myanmar Hong Kong +16% 11 11 27 30 Macau

+11% 45 Thailand 40

Cambodia 3 48 61 43 Philippines +13% 50

3 3 Malaysia +12% Brunei

Singapore +22%

46 40

Papua New Guinea 3 3 Indonesia +15%

Note (1): Fleet Distribution was done according to Business Jets in service and their active base of operations

Note (2): As only Greater China 2013 fleet distribution was independently verified, 2013 data for the Asia Pacific region has been determined by using deductions for the Greater China region only.

2 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 EXECUTIVE SUMMARY

Asian Sky Group’s Business Jet Fleet Report introduces a unique and alternate perspective on the business jet market in the Asia Pacific region. The report focuses on “net” additions of aircraft into in the Asia Pacific region as of year-end 2014. Net additions is defined as new aircraft plus pre-owned aircraft deliveries less the aircraft which exited the market throughout the year, or deductions.

The report provides an important overview of the performance of each Original Equipment Manufacturer (OEM), pre-owned sales and acquisition market activity, and is ultimately also a gauge of regional and per country business confidence levels.

So by these measures:

• 2014 appears to have been a successful year for Gulfstream who remains the market leader and delivered 30 new aircraft into the Asia Pacific region – the first G650s but the majority, as usual, being G450s and G550s; • If the Greater China market is any indication of the overall pre-owned market activity levels in the whole Asia Pacific region, aircraft sales activity levels dropped off dramatically in 2014 to almost half of those in 2013; and • Normally, as China goes, so does the Asia Pacific region. This is due to the fact that China represents almost 50% of the market. However, 2014 was a challenging year for China which consequently has allowed others countries in the region to shine and demonstrate their continuing strong performance. Those “other countries” in the region are primarily Thailand, Malaysia, Singapore & Indonesia, which grew at the same rate as China in 2014. So one can interpret that business confidence levels in China are down while up across South-East Asia.

As is always the case, there are inevitably other typical factors and market influences to consider. Hopefully, Asian Sky Group’s report will be able to reveal these key market drivers and thus ultimately shed an important light on the outlook for 2015.

Not considering Greater China (see the special section in the report on this key market):

• The largest business jet markets are Singapore and Malaysia where in both cases Bombardier is the dominating OEM and has a fairly balanced fleet in both countries with aircraft in operation from across its product line of Lear Jets, Challengers and Globals. • Indonesia is where Embraer has had the most success outside of China. There are 9 Legacy aircraft in Indonesia and the first Phenom 300s. • The Philippines is a Medium and Light aircraft size category market thus dominated by Cessna and Hawker, but is probably one of the oldest fleets in Asia Pacific. • Thailand seems to be either a Long Range Gulfstream market or, at the other end of the spectrum, a Light Cessna and Hawker market. • Japan is Cessna’s largest market outside of China and it has Gulfstream’s largest fleet of G650s in the Asia Pacific region. • Finally South Korea is another strong market for Cessna (66% of Cessna’s fleet in Asia Pacific is located in North Asia) but also has the largest concentration of BBJs in the Asia Pacific region.

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 3 Key Findings

● At the end of 2014, there were 15% more business jets based in the Asia Pacific region than in the previous year, growing from 647 to 744 aircraft.

● Out of the 18 countries and territories, Singapore, China, Hong Kong and Indonesia had a higher than average addition of jets with 22%, 16%, 16% and 15% respectively.

● Gulfstream and Bombardier continue to dominate the Asia Pacific business jet market with 30% and 26% of the fleet. Cessna, Dassault and Hawker follow with a 14%, 8% and 8% market share respectively, by aircraft number.

● In 2014, Boeing increased its net Asia Pacific fleet by 30.4%, Dassault 29.5%, Embraer 29.4% and Gulfstream 20%.

● The top-20 operators in the Asia Pacific operate 51% of the entire business jet fleet. Out of those, 16 are based in China or Hong Kong.

● Nearly 60% of the Asia Pacific business jet fleet consists of large or long range category aircraft largely positioned in China, Hong Kong and Singapore.

● The vast majority (72.2%) of business jets in the Asia Pacific were manufacturer in 2005 or later. 90% in Hong Kong and 80% in China are younger than 10 years old.

● The USA registration (N prefix) is preferred in almost every country in Asia Pacific – representing 24% of all business jets in the region.

● Out of 97 net additional aircraft in the region, 87 were new deliveries from OEMs, 42 were pre-owned aircraft and 32 were relocated out of the region. Gulfstream, Bombardier and Dassault combined contribued 70.6% of all the additions with 33.3%, 24.8% and 12.4% shares respectively.

● The most popular business jet models added to the Asia Pacific fleet in 2014 were the Gulfstream G550, G450, Bombardier Global 6000 and Dassault Falcon 7X.

● The majority of 2014 net additions were for aircraft based in China, Hong Kong and Singapore, representing 77.5% of total additions, or 44.2%, 24.8% and 8.5% respectively.

● The Greater China business jet fleet represents 59% of the aircraft (439 in total) in the Asia Pacific region.

● The net number of aircraft additions in Greater China in 2014 was 59 versus 64 in 2013 and over 100 in 2012.

● Pre-owned aircraft represented almost half the additions to the Greater China fleet in 2013. However, this number was only 27% in 2014.

4 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

FLEET BY OEM & COUNTRY – ASIA PACIFIC

297

114

61 48 46 45 44 30 China Japan Thailand Malaysia Indonesia Singapore Hong Kong Philippines

% Change Total % of Total from 2013 Airbus 11 6 1 1 1 2 1 1 24 3% - Boeing 7 5 3 3 2 1 1 6 2 30 4% - Bombardier 80 35 25 15 10 11 4 1 3 3 5 1 193 26% - Cessna 37 1 3 8 4 10 23 8 8 2 104 14% -1% Dassault 32 8 1 5 2 3 2 2 1 1 57 8% 1% Dornier 1 1 - - Eclipse 1 1 - - Embraer 20 4 4 1 14 1 44 6% 1% Gulfstream 96 54 18 9 4 7 10 11 2 8 3 3 225 30% - Hawker 14 1 5 5 10 10 3 7 1 3 1 60 8% -1% Nextant 1 1 - - Sabreliner 1 1 - - Westwind 3 3 - - Total 297 114 61 48 46 45 44 30 21 17 11 3 3 3 1 744 % of Total 40% 15% 8% 6% 6% 6% 6% 4% 3% 2% 1% - - - - % Change from 2013 +16% +16% +22% +12% +15% +13% +7% +11% +5% +13% - - - - -

6 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Airbus 24 (3%) Others 7 (1%)

Boeing 30 (4%)

Embraer 44 (6%)

Dassault 57 (8%) Gulfstream 225 (30%)

Hawker 60 (8%) 744

Cessna 104 (14%)

Bombardier 193 (26%)

21 17 11 3 3 3 1 Brunei Macau Taiwan Myanmar Cambodia South Korea Papua New Guinea New Papua % Change Total % of Total from 2013 Airbus 11 6 1 1 1 2 1 1 24 3% - Boeing 7 5 3 3 2 1 1 6 2 30 4% - Bombardier 80 35 25 15 10 11 4 1 3 3 5 1 193 26% - Cessna 37 1 3 8 4 10 23 8 8 2 104 14% -1% Dassault 32 8 1 5 2 3 2 2 1 1 57 8% 1% Dornier 1 1 - - Eclipse 1 1 - - Embraer 20 4 4 1 14 1 44 6% 1% Gulfstream 96 54 18 9 4 7 10 11 2 8 3 3 225 30% - Hawker 14 1 5 5 10 10 3 7 1 3 1 60 8% -1% Nextant 1 1 - - Sabreliner 1 1 - - Westwind 3 3 - - Total 297 114 61 48 46 45 44 30 21 17 11 3 3 3 1 744 % of Total 40% 15% 8% 6% 6% 6% 6% 4% 3% 2% 1% - - - - % Change from 2013 +16% +16% +22% +12% +15% +13% +7% +11% +5% +13% - - - - -

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 7 Fleet by Country – Top Markets China Hong Kong

Boeing 7 (2%) Airbus 6 (5%) Boeing 5 (4%) Dassault 8 Embraer 4 (4%) Airbus 11 (4%) (7%) Gulfstream 96 (32%) Cessna 1 (1%) Hawker 14 (5%) Hawker 1 (1%)

Embraer 20 (7%)

297 114

Bombardier 80 (27%) Dassault 32 (11%) Cessna 37 (12%) Bombardier 35 (31%) Gulfstream 54 (47%)

Macau Taiwan

Airbus 2 (12%) Embraer 1 (6%) Hawker 1 (9%) Gulfstream 8 (48%)

Dassault 1 (9%)

Airbus 1 (9%)

11 17

Bombardier 3 (17%)

Gulfstream 3 (27%) Bombardier 5 (46%) Hawker 3 (17%)

8 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Singapore Malaysia

Nextant 1 (2%) Dassault 1 (2%) Airbus 1 (2%) Cessna 3 (5%) Sabreliner 1 (2%) Embraer 1 (2%) Boeing 3 (5%) Eclipse 1 (2%) Boeing 3 (6%)

Bombardier 25 (41%) Hawker 5 (10%) Embraer 4 (6%) Bombardier 15 (32%)

61 48

Gulfstream 9 (19%)

Cessna 8 (17%)

Hawker 5 (8%) Gulfstream 18 (29%) Dassault 5 (10%)

Indonesia Philippines

Boeing 2 (4%) Dassault 2 (4%) Gulfstream 7 (16%)

Embraer Hawker Dassault 3 (7%) Cessna 4 (9%) 14 (30%) 10 (22%) Westwind 3 (7%) Gulfstream Dornier 1 (2%) 4 (9%) 46 45

Bombardier 10 (22%) Hawker 10 (22%) Cessna 10 (22%) Bombardier 11 (24%)

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 9 Japan Thailand

Dassault 2 (5%) Boeing 1 (2%) Dassault 2 (7%) Bombardier 1 (3%)

Hawker 3 (7%) Airbus 1 (2%) Boeing 1 (3%) Bombardier 4 (9%) Gulfstream 11 (37%)

44 30

Gulfstream 10 (23%)

Cessna 8 (27%)

Cessna 23 (52%) Hawker 7 (23%)

South Korea

Airbus 1 (5%) Hawker 1 (5%)

Gulfstream 2 (9%)

Cessna 8 (38%) 21

Bombardier 3 (14%) Boeing 6 (29%)

10 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

Fleet by Major OEM – Asia Pacific Airbus

Brunei 1 (4%) Japan 1 (4%)

Macau 1 (4%)

Malaysia 1 (4%) South Korea 1 (4%)

Taiwan 2 (9%) 24 China 11 (46%)

Hong Kong 6 (25%)

2 1 1 1 1 1 China Japan Brunei Macau Taiwan Malaysia Hong Kong South Korea

Change Total from 2013 A319ER 4 4 A340--200 1 1 ACJ318 3 1 2 7 ACJ319 4 3 1 1 1 1 10 +1 ACJ320 1 1 +1 ACJ330 1 1 +1 Total 11 6 2 1 1 1 1 1 24 Change from 2013 +1 +1 +1 +3

12 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Boeing

Thailand 1 (3%) Japan 1 (3%)

Indonesia 2 (7%)

China 7 (23%)

Brunei 2 (7%)

30 Malaysia 3 (10%)

South Korea 6 (20%)

Singapore 3 (10%)

Hong Kong 5 (17%)

6 5 3 3 2 2 1 1 China Japan Brunei Thailand Malaysia Indonesia Singapore Hong Kong Souht Korea

Change Total from 2013 727-100 1 1 2 737-200 1 1 737-400 1 1 747-400 1 1 767-200ER 1 1 BBJ 6 6 4 2 1 1 20 +3 BBJ2 1 1 1 1 4 +4 Total 7 6 5 3 3 2 2 1 1 30 Change from 2013 +3 +2 +1 +1 +7

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 13 Bombardier

South Korea 3 (2%) Thailand 1 Taiwan 3 (2%) Myanmar 1

Japan 4 (2%) Macau 5 (3%) Indonesia 10 (5%)

Philippines 11 (6%) China 80 (41%) Malaysia 15 (8%) 193

Singapore 25 (13%)

Hong Kong 35 (18%) 80

35 25 15 11 10 5 4 3 3 1 1 China Japan Macau Taiwan Thailand Malaysia Myanmar Indonesia Singapore Hong Kong Philippines South Korea

Change Total from 2013 Challenger 300 8 2 1 1 12 Challenger 601 1 3 1 5 -1 Challenger 604 2 2 2 6 Challenger 605 11 9 7 2 1 1 2 1 34 Challenger 800 1 1 +1 Challenger 850 12 4 1 1 18 +1 Challenger 870 11 11 +6 CRJ200 VIP 7 1 1 9 Global 5000 6 10 4 2 1 1 24 +4 Global 6000 7 5 3 1 1 1 18 +10 Global Express 3 2 1 1 2 9 -1 Global Express XRS 5 2 2 1 1 2 1 14 +1 Learjet 24 2 1 3 Learjet 31A 2 2 1 5 Learjet 35/A/36A 5 3 3 1 12 +1 Learjet 40 1 1 Learjet 45/XR 1 1 2 Learjet 60/XR 3 1 3 2 9 Total 80 35 25 15 11 10 5 4 3 3 1 1 193 Change from 2013 +10 +3 +5 +1 +3 -1 +1 +22

14 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Cessna Singapore 3 (3%) Papua New Guinea 2 (2%)

Hong Kong 1 (1%)

Indonesia 4 (4%)

Thailand 8 (8%)

Malaysia 8 (8%) China 37 (35%) 104 South Korea 8 (8%)

Philippines 10 (9%) Japan 23 (22%) 37

10 8 8 8 4 3 2 1 China Japan Thailand Malaysia Indonesia Singapore Hong Kong Philippines Souht Korea Papua New Guinea New Papua

Change Total from 2013 Citation Bravo 2 3 5 Citation CJ1/+ 13 3 1 3 20 Citation CJ2/+ 7 7 Citation CJ3 1 1 2 -1 Citation CJ4 2 2 +1 Citation Encore 2 1 3 Citation Excel 3 3 Citation I/SP/II 2 1 1 1 5 Citation Mustang 3 3 1 2 9 +2 Citation S/II 2 2 Citation Sovereign/+ 4 3 2 4 1 1 15 +2 Citation Ultra 1 4 1 6 Citation V 3 3 Citation VI/VII 1 1 1 3 -1 Citation X/+ 1 2 1 4 +1 Citation XLS/+ 8 3 3 1 15 +4 Total 37 23 10 8 8 8 4 3 2 1 104 Change from 2013 +4 +4 +1 -1 +8

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 15 Dassault

Singapore 1 (2%) Papua New Guinea 1 (2%) Macau 1 (2%) Thailand 2 (3%) Japan 2 (3%) Indonesia 2 (3%) Philippines 3 (5%)

China 32 (56%)

Malaysia 5 (10%) 57

Hong Kong 8 (14%)

8 5 3 2 2 2 1 1 1 China Japan Macau Thailand Malaysia Indonesia Singapore Hong Kong Philippines Papua New Guinea New Papua

Total Change from 2013 Falcon 10 1 1 Falcon 2000LX 1 2 1 2 1 7 Falcon 2000LXS 1 1 +1 Falcon 2000S 1 1 +1 Falcon 20D 1 1 Falcon 20F-5 1 1 Falcon 50 1 1 +1 Falcon 7X 26 4 1 31 +8 Falcon 900 1 1 2 4 Falcon 900DX 1 1 Falcon 900EX 1 1 2 Falcon 900LX 3 3 6 +2 Total 32 8 5 3 2 2 2 1 1 1 57 Change from 2013 +8 +3 +2 +1 +13*

* includes one aircraft lost in Taiwan

16 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Embraer

Malaysia 1 (2%) Taiwan 1 (2%)

Hong Kong 4 (9%)

Singapore 4 (9%) China 20 (46%)

Indonesia 14 (32%)

4 4

1 1 China Taiwan Malaysia Indonesia Singapore Hong Kong

Total Change from 2013 Legacy 600 1 7 2 1 1 1 13 +1 Legacy 650 13 2 1 1 17 +5 Legacy Shuttle 1 1 Lineage 1000 4 1 1 6 +2 Lineage 1000E 1 1 2 +2 Phenom 100 1 1 Phenom 300 1 3 4 Total 20 14 4 4 1 1 44 Change from 2013 +9 +1 +1 +10*

* includes one aircraft lost in Macau

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 17 Gulfstream

Cambodia 3 (1%) Macau 3 (1%)

Indonesia 4 (2%) South Korea 2 (1%) Philippines 7 (3%) Taiwan 8 (4%)

Malaysia 9 (4%)

Japan 10 (4%) China 96 (43%)

Thailand 11 (5%) 225 Singapore 18 (8%)

Hong Kong 54 (24%) 54

18 11 10 9 8 7 4 3 3 2 China Japan Macau Taiwan Thailand Malaysia Indonesia Singapore Cambodia Hong Kong Philippines

South Korea Change Total from 2013 G100 2 2 G150 1 1 2 G200 11 6 2 4 1 2 1 1 1 29 +1 G280 4 4 +4 G300 1 1 G450 35 15 5 3 1 2 1 1 1 64 +9 G500 1 1 G550 39 28 5 3 3 1 1 1 2 2 85 +10 G650 3 2 5 10 +6 G-II 1 1 2 G-III 1 1 2 G-IV 3 1 1 1 6 G-IV-SP 1 1 1 2 2 1 8 +1 G-V 3 1 1 2 2 9 Total 96 54 18 11 10 9 8 7 4 3 3 2 225 Change from 2013 +8 +8 +2 +3 +3 +1 +1 +3 +2 +31

18 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Hawker Macau 1 (2%) South Korea 1 (2%)

Hong Kong 1 (2%)

Taiwan 3 (5%)

Japan 3 (5%) China 14 (23%) Singapore 5 (8%)

Malaysia 5 (8%) 60

Indonesia 10 (17%)

Thailand 7 (11%)

Philippines 10 (17%) 14 10 10

7 5 5 3 3 1 1 1 China Japan Macau Taiwan Thailand Malaysia Indonesia Singapore Hong Kong Philippines South Korea

Change Total from 2013 HS 125-1A 1 1 Hawker 400/A/XP 1 2 2 2 1 2 3 13 +3 Hawker 700A/B 5 1 6 Hawker 750 1 1 Hawker 800A/B/XP 7 1 3 2 2 1 1 17 +2 Hawker 850XP 2 2 4 Hawker 900XP 3 5 1 9 -1 Hawker 1000A 2 2 Hawker 4000 1 1 1 3 -3 Premier I/IA 2 1 1 4 Total 14 10 10 7 5 5 3 3 1 1 1 60 Change from 2013 -1 +1 +1 +1 -1 +1

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 19 PERSONALITY PROFILE

Interview and Text by Anthony Lam William E. Heinecke Chairman & CEO, Minor Group of Companies “You’ve got to have the passion.”

In 1967, an American youngster with a secondary school education, a blank CV, and lean financial resources walked into a lawyer’s office in Bangkok. He handed over the equivalent of US$1,000 and signed the necessary papers to incorporate two companies, Inter-Asian Enterprise and Inter-Asian Publicity. While the names sounded impressive, their assets were meager. After spending the bulk of the US$1,200 he had borrowed from a moneylender on the company registrations, what little remained was spent on plastic buckets and floor mops for his new cleaning business along with a few minutes of air time on a local radio station. There was nothing too glamorous about cleaning offices and writing simple advertisements for local businesses, but it was a start. Bill Heinecke had taken his first faltering step into the world of commerce and entrepreneurship.

20 ASIAASIA PACIFIC PACIFIC BUSINESS BUSINESS JET JET FLEET FLEET REPORT REPORT YEAR YEAR END END 2014 2014 As Bill Heinecke himself and Jonathan Marsh have said in The Entrepreneur, “Thirty-five years later, that teenager has turned 53 and sits on top of a expansive business empire. He has become the most successful foreign businessman in Thailand and perhaps one of the smartest expatriate entrepreneurs in the whole of Southeast Asia. Heinecke has persuaded the spice-loving Thais to eat pizza; he has built luxury hotels and shopping malls where others feared to tread; he has spotted trends and opportunities where competitors saw only red ink and dead ends. Scattered over the country is a chain of more than a hundred pizza restaurants, two ice cream franchises, steak, restaurants, and a host of manufacturing and licensing operations that include the world’s largest golf glove factory, Esprit fashion, Sheaffer pens, cosmetics, and a company that provides catering to offshore oil rigs. He is chief executive and major shareholder of three publicly listed companies - The Minor Food Group, Royal Garden Resorts, and the Minor Corporation - that employ more than 12,000 people. Forbes has named it one of the best 300 small companies in the world - and for a time it was the only Thai company to be nominated.” William E. Heinecke with Jonathan Marsh (1-2).

These days the mop and bucket business have disappeared. As a passionate aviator, Heinecke flies himself around Thailand in his Piper Malibu. Being no stranger to aviation or private aircraft, Heinecke has owned and piloted a Grumman Lynx, Mooney, Bonanza, and a Piper Mirage, among others. “Flying really came from an extension of my businesses,” said Heinecke. “At the time, to travel to and from the location of my business required 8 hours of driving time - it was either that, or a 35-minute flight, so I had a big incentive to learn how to fly,” Heinecke continued. Over the years, Heinecke pursued flying and upgraded his fleet of aircraft as his mission requirements and experience grew. Minor Aviation was then founded, becoming the Mjets we know today.

As an entrepreneur with an adventurous spirit, when Heinecke wasn’t busy closing the next multi-million dollar deal, he could be found diving, racing vintage cars, skiing, and free falling out of an aircraft. “I did a little bit of everything. I flew from London to Bangkok in my Bonanza, and then in my Piper Malibu I flew from Florida to Bangkok. Today, our fleet of jets consist of the Bravo for EMS operations, CJ-3 for short haul flights, Citation X, and a Gulfstream V, all owned by MJets,” recounted Heinecke. Beyond that, Heinecke’s other businesses own and operate six aircraft in the Maldives, many of them Dehavilland Twin Otters, as well as numerous Cessna Caravans in Africa for their hotels. “Aviation is an important part of all of our businesses, it is in fact a critical aspect. There is no doubt that the fastest growing businesses use business aircraft, and that is no coincidence,” said Heinecke.

Many have correlated Heinecke’s success for business to his passion for adventure, and more specifically risk taking. “I may have an adventurous spirit, but I don’t think I’m necessarily a risk taker,” explained Heinecke. Heinecke feels that training well, preparing well, and never going into something that may endanger oneself are the ingredients to success. “The key is preparation - the more prepared you are, the more luck will be on your side,” Heinecke continued. “Always invest in the best aircraft you can afford, and don’t skip on maintenance,” said Heinecke, who had learned of this lesson after an unfortunate incident where the cause was attributed to maintenance. “Above all, plan your journey carefully, remain cool and calm at all times. Keeping a cool head and reacting well to crisis situations comes from training. The more prepared you are and the harder you work, the luckier you’ll get,” reflected Heinecke, who continued, “In the end you’ve got to have the passion - because when you do, nothing can stop you.”

ASIAASIA PACIFIC PACIFIC BUSINESS BUSINESS JET JET FLEET FLEET REPORT REPORT YEAR YEAR END END 2014 2014 21 TOP 20 OPERATOR FLEETS BY OEM – ASIA PACIFIC 51% of total Asia Pacific fleet

The Top-20 operators in Asia Pacific fly 51% of the total business jet fleet in the region. Deer Jet, TAG Aviation, Business Aviation Asia, Metrojet and Jet Aviation remain the top five jet operators in the region while many Chinese and Hong Kong operators follow, making Greater China count 16 out of the top 20 Asia Pacific operators. In 2014, it was observed that Non-China based operators were able to grow their aircraft fleet while China-based operators had very little if any growth in the number of aircraft they managed.

49 45

16 14 13 12 12 BAA Lily Jet Deer Jet Deer Jet Metrojet Jet Aviation Aviation Jet TAG Aviation TAG China United China Eastern HongKong Jet HongKong

Minsheng Int’l Jet Total Airbus 4 1 2 1 1 3 3 2 17 Boeing 3 1 1 1 1 1 1 1 1 11 Bombardier 1 30 13 6 6 2 10 2 11 4 3 1 2 2 7 100 Cessna 1 1 10 9 6 27 Dassault 6 7 11 2 2 1 3 1 33 Embraer 3 1 3 5 8 1 6 27 Gulfstream 47 8 17 24 21 7 4 4 1 1 5 3 1 1 5 4 153 Hawker 9 1 4 14 Total 70 49 45 35 30 16 14 13 12 12 11 10 9 9 9 8 8 8 7 7 382

22 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 11

10 9 9 9 8 8 8 7 7 Asia Jet VistaJet Sino Jet Premiair Korean Air Korean Nanshan Jet Beijing Airlines CAAC Academy CAAC CAAC Inspection CAAC

Challenger Aero Air Challenger Aero Total Airbus 4 1 2 1 1 3 3 2 17 Boeing 3 1 1 1 1 1 1 1 1 11 Bombardier 1 30 13 6 6 2 10 2 11 4 3 1 2 2 7 100 Cessna 1 1 10 9 6 27 Dassault 6 7 11 2 2 1 3 1 33 Embraer 3 1 3 5 8 1 6 27 Gulfstream 47 8 17 24 21 7 4 4 1 1 5 3 1 1 5 4 153 Hawker 9 1 4 14 Total 70 49 45 35 30 16 14 13 12 12 11 10 9 9 9 8 8 8 7 7 382

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 23 AIRCRAFT MODELS BY REGION – TOP OPERATORS* China 51% of the Total China Fleet

17 16 14

Deer Jet BAA TAG Aviation China Eastern Minsheng Int’l Jet

Total A319ER 1 1 ACJ318 1 1 2 ACJ319 2 1 3 BBJ 3 3 Challenger 300 1 1 Challenger 605 1 4 5 Challenger 850 3 2 5 Citation CJ1/+ 1 1 Falcon 2000S 1 1 Falcon 7X 4 8 5 2 19 Falcon 900LX 1 1 2 Gulfstream G200 7 1 8 Gulfstream G280 2 2 Gulfstream G450 12 5 2 3 1 23 Gulfstream G550 20 5 3 1 29 Gulfstream IV 3 3 Gulfstream IV-SP 1 1 Gulfstream V 3 3 Global 5000 3 3 Global 6000 5 1 6 Global Express 1 1 Global Express XRS 1 1 Hawker 4000 1 1 Hawker 800A/B/XP 4 1 5 Hawker 850XP 2 2 Hawker 900XP 2 2 Learjet 60/XR 1 1 2 Legacy 650 1 5 6 12 Lineage 1000 1 1 2 Lingeage 1000E 1 1 Total 68 35 17 16 14 150

* The top 5 operators are shown unless many operators share the same number of aircraft at the 4th and 5th place.

24 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Hong Kong 75% of the Total Hong Kong Fleet

19 16

11 9

Total A319ER 1 1 ACJ318 1 1 2 ACJ319 2 1 3 Metrojet Jet Aviation TAG Aviation Hongkong Jet BAA BBJ 3 3 Challenger 300 1 1 Challenger 605 1 4 5 Challenger 850 3 2 5 Total Citation CJ1/+ 1 1 ACJ318 1 1 Falcon 2000S 1 1 ACJ319 1 2 3 Falcon 7X 4 8 5 2 19 BBJ 1 1 2 Falcon 900LX 1 1 2 Challenger 604 2 2 Gulfstream G200 7 1 8 Challenger 605 1 2 1 1 5 Gulfstream G280 2 2 Challenger 850 1 1 2 Gulfstream G450 12 5 2 3 1 23 Citation Sovereign/+ 1 1 Gulfstream G550 20 5 3 1 29 Falcon 7X 1 1 1 3 Gulfstream IV 3 3 Falcon 900EX 1 1 Gulfstream IV-SP 1 1 Falcon 900LX 1 1 1 3 Gulfstream V 3 3 Gulfstream G200 2 1 3 Global 5000 3 3 Gulfstream G450 4 5 1 1 11 Global 6000 5 1 6 Gulfstream G550 13 7 2 4 26 Global Express 1 1 Gulfstream G650 1 1 1 3 Global Express XRS 1 1 Gulfstream V 1 1 Hawker 4000 1 1 Global 5000 2 1 4 7 Hawker 800A/B/XP 4 1 5 Global 6000 3 3 Hawker 850XP 2 2 Global Express 1 1 2 Hawker 900XP 2 2 Global Express XRS 1 1 2 Learjet 60/XR 1 1 2 Legacy 600 1 1 Legacy 650 1 5 6 12 Legacy 650 1 1 Lineage 1000 1 1 2 Lineage 1000 1 1 Lingeage 1000E 1 1 Lineage 1000E 1 1 Total 68 35 17 16 14 150 Total 30 19 16 11 9 85

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 25 Macau 64% of the Total Macau Fleet

3 2 2

Fortuna Jet Jet Asia TAG Aviation

Total Challenger 605 1 1 2 Challenger 850 1 1 CRJ200 VIP 1 1 Global Express 1 1 Gulfstream G550 2 2 Total 3 2 2 7

Taiwan 59% of the Total Taiwan Fleet

3 3 2 2

Executive Aviation Win Air Jet Aerospace Industrial EVA Airways Taiwan Development

Total ACJ318 2 2 Gulfstream G100 2 2 Gulfstream G450 1 1 Gulfstream G550 2 2 Global Express XRS 1 1 Hawker 400/A/XP 1 1 Legacy 600 1 1 Total 3 3 2 2 10

26 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Singapore 46% of the Total Singapore Fleet

6 5 4 4 3 3 3

Pacific Flight TAG Jet Execujet Asia Pacific Precious TWC Services Aviation Aviation Jets Jet Aviation

Total BBJ 1 1 Challenger 300 1 1 2 Challenger 605 1 2 1 4 Gulfstream G150 1 1 Gulfstream G450 1 2 3 Gulfstream G550 1 1 2 Global 5000 2 2 Global 6000 1 1 2 Hawker 800A/B/XP 2 2 Learjet 35/A/36A 2 2 Learjet 45/XR 1 1 Learjet 60/XR 1 2 3 Legacy 600 1 1 Legacy 650 1 1 Nextant 400XT 1 1 Total 6 5 4 4 3 3 3 28

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 27 Malaysia 38% of the Total Malaysia Fleet

4 4 3 3 2 2

Gov’t of Smooth TAG Weststar Aviation Aerotree Berjaya Malaysia Route Aviation Services Defense & Services Air

Total Boeing 727-100 1 1 Boeing 737-200 1 1 ACJ319 1 1 Challenger 300 1 1 Citation Bravo 2 2 Citation Sovereign/+ 2 2 Gulfstream G450 1 1 Gulfstream II 1 1 Gulfstream IV 1 1 Global 5000 1 1 Global Express XRS 2 2 Learjet 35/A/36A 2 2 Learjet 60/XR 2 2 Total 4 4 3 3 2 2 18

28 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Philippines 49% of the Total Philippines Fleet

4 3 3 3

Challenger Metrojet Subic Int’l Air Lionair Royal Star Aero Air Charter Aviation

Total Dornier 328JET 1 1 Challenger 300 1 1 Citation I/SP/II 1 1 Citation XLS/+ 1 1 2 CRJ200 VIP 1 1 Falcon 900 1 1 Gulfstream G200 1 1 Gulfstream G450 1 1 Gulfstream G550 1 1 Gulfstream IV-SP 1 1 2 Global 5000 1 1 Hawker 700A/B 1 1 2 Hawker 800A/B/XP 3 3 Learjet 35/A/36A 1 1 Learjet 40 1 1 Learjet 45/XR 1 1 Westwind 1 1 1 Total 9 4 3 3 3 22

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 29 Indonesia 59% of the Total Indonesia Fleet

3 2 2 2 2 2 2 2 2

Premiair Gov’t of Jhonlin Transpac Lionair Airfast Transwisata TAG Enggang FlyJet Indonesia Air Transport Indonesia Prima Aviation Aviation Air Service

Total BBJ 1 1 BBJ2 1 1 Challenger 601 2 2 Challenger 604 2 2 Challenger 605 1 1 Citation VI/VII 1 1 Gulfstream G550 1 1 Gulfstream IV-SP 1 1 Hawker 900XP 2 2 4 Learjet 31A 2 2 Legacy 600 2 1 1 1 5 Legacy 650 2 2 Legacy Shuttle 1 1 Lineage 1000 1 1 Phenom 300 1 1 Premier I/IA 1 1 Total 8 3 2 2 2 2 2 2 2 2 27

30 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Japan 41% of the Total Japan Fleet

4 4 4 3 3

Asia Jet Gov’t of Japan - Ministry of Land Nakanihon Jet Coast Guard & Traportation Air Service Aviation

Total ACJ318 1 1 BBJ 1 1 Citation V 3 3 Falcon 900 2 2 Gulfstream G650 2 2 4 Gulfstream IV 1 1 Gulfstream IV-SP 1 1 Gulfstream V 2 2 Global 6000 1 1 Global Express 2 2 Total 4 4 4 3 3 18

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 31 Thailand 57% of the Total Thailand Fleet

4 3 2 2

Mjets Siam Land AC Advance Thai Flying Flying Aviation Aviation Service

Total Citation Bravo 1 1 2 Citation CJ3 1 1 Citation VI/VII 1 1 Citation X 1 1 Falcon 2000LX 1 1 Gulfstream G200 2 2 4 Gulfstream V 1 1 Global Express XRS 1 1 Hawker 400/A/XP 2 2 Hawker 800A/B/XP 1 1 Hawker 850XP 1 1 2 Total 6 4 3 2 2 17

South Korea 81% of the Total South Korea Fleet

3 2 2 2

Korean Air Samsung Flight SK Telecom Hyundai Techwin Inspection Motor Center Total ACJ319 1 1 BBJ 1 2 2 5 Challenger 601 1 1 Citation CJ1/+ 2 2 Citation Ultra 4 4 Gulfstream G550 1 1 Global Express XRS 1 1 2 Hawker 750 1 1 Total 8 3 2 2 2 17

32 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

Text and photo by Anthony Lam Iris Riesen Managing Director, Jet Aviation Hong Kong

In addition to aircraft management and charter, internationally renowned operator Jet Aviation, a wholly- owned subsidiary of General Dynamics, serves the business aviation industry with core services including maintenance and engineering, completions and refurbishment, FBO and staffing. Headquartered in Switzerland since 1967, Jet Aviation Business Jets Limited today is based out of the Hong Kong International Airport and led by its Managing Director Iris Riesen.

“We have been providing business aviation services to aircraft owners and operators for nearly half a century,” said Riesen. “In this time, we not only developed comprehensive business aviation service capabilities, we established a global network of facilities and earned a reputation for excellence. Jet Aviation takes pride in exceeding customer expectations, and our good standing in the aviation industry is based on the quality, transparency, commitment and dedication of each member of our global team of professionals. This is the highest value we offer and is what differentiates us from our competitors,” said Riesen.

Jet Aviation Business Jets Limited first entered the Asian market in 1995 with the opening of their maintenance, refurbishment, and FBO facility in Singapore. In Hong Kong, their aircraft management and charter operation was launched in September 2001 as a division of Jet Aviation Business Jets, and they have been promoting and maintaining relationships with owners, partners, and authorities ever since. Available services include the full range of aircraft management, operations, and flight support services, as well as charter services all provided on a 24/7 basis by a team of multilingual specialists.

34 ASIAASIA PACIFIC PACIFIC BUSINESS BUSINESS JET JET FLEET FLEET REPORT REPORT YEAR YEAR END END 2014 2014

On September 9, 2008 the company received its maintenance repair station approval from the Hong Kong Civil Aviation Department (CAD). The company offers line maintenance, inspections, and defect rectifications, as well as AOG support, and has access to a 9,200 square meter (99,027 square feet) hangar. In addition to Hong Kong CAD maintenance repair station approval, the company holds an FAA repair station certificate, and mainland China JMM approval for PRC-registered aircraft. In addition, it services aircraft registered in 11 other countries through Jet Aviation’s maintenance approvals in Singapore, which include EASA, Aruba DCA, Australian CASA, Bermuda DCA, Cayman CAA, Indonesia DGAC, Macao MAR-145, Malaysia DCA, Philippines ATO, Singapore CAAS, and Thailand DOA.

“With more than 20 airport facilities throughout Europe, the Middle East, Asia, and North and South America, our scope and scale of service offerings offers major benefits that are difficult to match. We have experience and know-how that is well-respected in the market and shaped around the highest industry standards. While I don’t want to underestimate the learning curve we faced when we first started operating in Asia, we did bring a lot of valuable experience with us. For example, we manage a fleet of more than 250 aircraft worldwide and all members of the Hong Kong dispatch team have been trained in cooperation with the company’s headquarters in Zurich,” said Riesen.

“Our global network of maintenance, FBO and aircraft management and charter facilities represent a major benefit to international travelers in terms of service, but our aircraft management and flight support customers also benefit in terms of the bottom line through our global buying power we negotiate substantial reductions in fuel and insurance costs, etc., which we pass on to our customers to ensure comprehensive services - at great value,” continued Riesen.

When it comes to safety, as a leading business aviation services provider, Jet Aviation Business Jets Limited’s highest priority is to uphold, promote, and improve Safety standards in every aspect of operations. “This means working with each other, our customers and the industry to ensure Safety is as prominent in our goals as quality, integrity, continuous improvement and profit generation. We make Safety an integral part of our corporate culture that is continually reflected in all of our daily activities. For us, Safety is everyone’s responsibility. From our leadership, operations, maintenance and engineering teams to everyone in or administration, security and housekeeping teams, we have adopted a Safety first approach to make certain that Safety guides our actions as a matter of habit. Our goal is Zero Safety Incidents,” Riesen explained.

In 2014, Jet Aviation Houston and Jet Aviation Basel both earned ISO 14001 and OHSAS 18001 certifications in recognition of their commitment to protecting health and safety, as well as the environment. It is just a question of time before more of their facilities follow suit.

When asked about the challenges of operating in Asia and China, as well as examples of lessons learned, Riesen explained that “China was and still is to some extent a new market for corporate aviation. The current lack of infrastructure to support the needs of the business jets community presents some challenges, as well as the restrictions in permits and approvals.” Whilst a lot has changed in recent years to better accommodate business aviation in Asia and China, there is not the same freedom of operation like in some of the older markets of our businesses. Jet Aviation Business Jets Limited have learned that patience is a virtue and that only with polite persistence will yield results where solutions are achieved. “What we can say for certain is that it is very interesting and exciting area to be in and that we are fully committed to Asia and its customers here for the long term. To succeed here in the long term, we believe in thinking globally, but acting locally,” Riesen reflected.

ASIAASIA PACIFIC PACIFIC BUSINESS BUSINESS JET JET FLEET FLEET REPORT REPORT YEAR YEAR END END 2014 2014 35 FLEET BY SIZE CATEGORY – ASIA PACIFIC

Nearly 60% of the Asia Pacific business jet fleet consists of Large or Long-Range category aircraft largely positioned in China, Hong Kong and Singapore. Aircraft size preference in Thailand, Malaysia, and Indonesia also include the medium size category aircraft, while the Philippines tends more towards medium and light aircraft categories.

Very Light 59 (8%) Corp. Airliner 63 (8%)

Medium 119 (16%)

Large 224 (30%) 744

Long Range 201 (27%) Light 78 (11%) 297

114

61 48 46 45 44 30 21 17 11 3 3 3 1 China Japan Burnei Macau Taiwan Thailand Malaysia Myanmar Singapore Cambodia Hong Kong Philippines Indoenesia South Korea

Papua New Guinea New Papua Market Total Share Change Corp. Airliner 23 13 3 4 3 1 2 1 7 2 1 3 63 Long Range 89 55 15 6 3 3 10 8 4 4 3 1 201 Large 106 37 18 14 20 8 5 2 1 4 6 1 1 1 224 Medium 40 9 13 15 7 14 4 10 1 4 1 1 119 +2% Light 20 9 7 9 14 7 4 5 2 1 78 -2% Very Light 19 3 2 4 5 16 5 3 1 1 59 Total 297 114 61 48 46 45 44 30 21 17 11 3 3 3 1 744 % Change +16% +16% +22% +12% +15% +13% +7% +11% +5% +13% - - - - - from 2013

36 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Size Category Description

Corporate Airliner Long Range Large

Boeing 727-100 Gulfstream G500 Challenger 601 Boeing 737-200 Gulfstream G550 Challenger 604 Boeing 737-400 Gulfstream G650 Challenger 605 Boeing 747-400 Gulfstream V Challenger 800 Boeing 767-200ER Global 5000 Challenger 850 Airbus 319ER Global 6000 Challenger 870 Airbus 340-200 Global Express CRJ200 VIP ACJ318 Global Express XRS Gulfstream G280 ACJ319 Falcon 7X Gulfstream G300 ACJ320 Gulfstream G450 ACJ330 Gulfstream II BBJ Gulfstream III BBJ2 Gulfstream IV Lineage 1000/E Gulfstream IV-SP Dornier 328JET Legacy 600 Legacy 650 Legacy Shuttle Falcon 900 Falcon 2000LX/S/LXS Falcon 900DX/EX/LX

Medium Light Very Light

Challenger 300 Citation Bravo Citation CJ2/+ Citation X/+ Citation CJ3 Citation CJ1/+ Citation Sovereign/+ Citation CJ4 Citation I/SP/II Gulfstream G100 Citation Encore Citation Mustang Gulfstream G150 Citation Excel Eclipse500 Gulfstream G200 Citation S/II Phenom 100 Falcon 50 Citation Ultra Learjet 24 Falcon 20D Citation V Hawker 400/A/XP Falcon 20F Citation VI/VII Premier I/IA Learjet 60/XR Citation XLS/+ HS 125-1A Learjet 31A Hawker 700A/B Learjet 35/A/36A Hawker 750 Learjet 40 Hawker 800A/B/XP Learjet 45/XR Hawker 850XP Phenom 300 Hawker 900XP Falcon 10 Hawker 1000A Westwind 1/2 Hawker 4000 Sabreliner 65 Hawker 400/A/XP Nextant 400XT

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 37 FLEET REGISTRATIONS – ASIA PACIFIC USA (N) Japan (JA-) (HL) South Korea (B-XXXXX) Taiwan (B-K/B-LXX) Hong Kong Macau (B-MXX) China (B-XXXX) Philippines (PR-C) Thailand (HS-) (XY-,XZ-) Myanmar Guinea (P2) New Papua Indonesia (PF-)

36 (82%) 8 (18%) Japan

20 (95%) 1 (5%) South Korea

43 (37%) 22 (19%) 5 (4%)

Hong Kong

6 (55%) 1 (9%) Macau

6 (35%) 10 (59%) Taiwan 247 (83%) 30 (10%) 1 (1%) 2 (1%) China

1 (100%) Myanmar 34 (74%) 10 (22%) Philippines

2 (67%) Cambodia Aircraft Base 24 (80%) 5 (17%) Thailand

Brunei 28 (58%) 2 (4%) 1 (2%) Malaysia

3 (100%) Papua New Guinea 30 (65%) 12 (26%) Indonesia

31 (51%) 1 (2%) 1 (2%) Singapore

% of Fleet 24% 5% 3% 1% 4% 34% 5% 3% 4%

38 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Malaysia (9M) Malaysia Brunei (V8) Singapore (9V) Bermuda (VP-B, VQ-B) Islands (VP-C) Cayman Isle of Man (M-) (OE-) Austria Finland (OH-) San Marino (T7) Malta (9H) (LX-) Luxembourg Zealand (ZK) New (VH-) Australia

Japan

South Korea 11 (10%) 26 (23%) 2 (2%) 2 (2%) 1 (1%) 1 (1%) 1 (1%) Hong Kong

1 (9%) 2 (18%) 1 (9%) Macau

1 (6%) Taiwan

6 (2%) 9 (3%) 1 1 China

Myanmar Base Aircraft

1 (2%) 1 (2%) Philippines

1 (33%) Cambodia

1 (3%) Thailand

3 (100%) Brunei

12 (25%) 1 (2%) 2 (4%) 1 (2%) 1 (2%) Malaysia

Papua New Guinea

1 (2%) 1 (2%) 2 (4%) Indonesia

2 (3%) 7 (11%) 3 (5%) 4 (7%) 1 (2%) 2 (3%) 9 (15%) Singapore

2% 3% 5% 3% 1% 1% % of Fleet

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 39 Popular Aviation Registrations – Asia Pacific Characteristics Comparison

Country Cost of Time for Effective Ease Sale Value New AC Type Crew International of Registering Registration Import of Attractiveness Delay Licensing Operational Registration an Aircraft (Weeks) Taxes Financing Internationally (Months) & Training Flexibility

AUSTRIA Medium Short None Good Good Short Medium Medium

BERMUDA Average Reasonable None Good Good Short Easy Reasonable

CAYMAN ISLANDS Average Reasonable None Good Good Short Easy Reasonable

CHINA Average Very Long Very High Mostly Local Medium Very Long Difficult Medium

HONG Expensive Very Long None Good Good Long Medium Medium KONG

INDONESIA Average Long High Restricted Low Reasonable Medium Low

ISLE OF Average Reasonable None Good Good Short Reasonable Reasonable MAN

JAPAN Expensive Long Medium Good Good Long Difficult Medium

KOREA Medium Medium None Reasonable Good Reasonable Medium Medium

MALTA Average Reasonable None Good Good Short Reasonable Medium

MALAYSIA Average Reasonable High Mostly Local Good Medium Medium Medium

PHILIPPINES Average Reasonable High Restricted Low Medium Difficult Reasonable

TAIWAN Average Reasonable None Good Reasonable Long Medium Medium

THAILAND Average Medium Medium Mostly Local Reasonable Reasonable Reasonable Reasonable

USA Average Short None Good Good Short Easy Good

Applicable tax rates & regulations may change without notice and vary depending on the structure of the transaction, the timing and place of entering into agreements. It is therefore advised to retain professional advice before entering into any transaction.

40 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 FLEET AGE DISTRIBUTION – ASIA PACIFIC 744 Total

The vast majority (72.8%) of business jets in Asia Pacific were manufacturer in 2005 or later. Only Cessna, Boeing and Hawker have more than 30% of their fleet older than 10 years old in the region (35%, 35% and 63% respectively). The business jet fleet is very young in Greater China with 90% in Hong Kong and 80% in China being 10 years old or less. This then decreases with Korea (76%), Singapore (69%), Indonesia (61%), Thailand (57%), Japan (50%) and the Philippines (48%) illustrating the ages and business jet experiences of various markets. 80

0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 41 Age Distribution by OEM

Airbus 24 in total 20 15 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

Boeing 30 in total 20 15 10 5 0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

Bombardier 193 in total

25 20 15 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

Cessna

104 in total 20 15 10 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

42 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Dassault 57 in total 20 15 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

Embraer 44 in total 20 15 10 5 0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

Gulfstream 225 in total 30 25 20 15 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

Hawker 60 in total 20 15 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 43 Age Distribution by Region

China 297 in total

Hong Kong 114 in total 20

0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

44 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Japan – 44 in Total 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

South Korea – 21 in Total 10 5 0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

Philippines – 45 in Total 10 5 0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

Thailand – 30 in Total 10 5 0 1974 1971 1976 1977 1978 1979 1997 1970 1972 1973 1975 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1965 1966 1967 1968 1969 1984 2000 2002 2003 2004 2005 2006 2008 2009

Indonesia – 46 in Total 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

Singapore – 61 in Total 10 5 0 1974 1971 1976 1977 1970 1972 1973 1975 1978 1979 1997 2010 2014 2007 2011 1991 1987 1981 2013 2001 2012 1994 1965 1966 1967 1968 1969 1980 1982 1983 1985 1986 1988 1989 1990 1992 1993 1995 1996 1998 1999 1984 2000 2002 2003 2004 2005 2006 2008 2009

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 45

Denzil White COO, Hongkong Jet

As the international business aviation arm of the conglomerate HNA Group which holds 17 AOC’s and over 400 jet aircraft, Hongkong Jet provides aircraft management, charter, maintenance, and advisory to a wide range of business jet owners and clients in the region. Co-led by the recently-joined industry veteran and COO Denzil White, the company today is a key player in the market that is constantly on the rise.

“Hongkong Jet has many strengths. With our Chinese parents from the mainland and ourselves born in Hong Kong, the edge gives us a more international flavor when looking at the APAC region, allowing us more flexibility in terms of business law and the operating environment,” said White. With their services in aircraft management, charter, maintenance, and consulting, Hongkong Jet is also embarking readily on aircraft sales as well. “We have 18 aviation companies under the parent company and with businesses that span multiple businesses such as shipping and hotels, in additional to aviation. With this setup, we are able to leverage our operations with the economies of scale, helping with insurance rates and fuel pricing, among others. This is what gives us the competitive advantage,” White remarked.

46 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

While most players in the industry come into Hong Kong to try to penetrate into the Chinese market, Hongkong Jet has a unique position in that they were from China since the beginning. For this reason, Hongkong Jet can focus externally to diversify its client pool and businesses. “Expansions are good, but it all starts at the core values,” explained White, who continued, “The HNA group has sewn on very solid core values since its inception, and they have been transmitted to Hongkong Jet as part of the DNA of the group, and therefore becomes a part of the company’s lifestyle. Take safety, for example. It is a way of life. A lot of companies say they commit to safety, but they don’t walk the talk. How do you get people to look at the safety model day in and day out? Safety needs to start at the top of the organization, so that management leads the directors and the directors lead the rest of the team. ”

Today, Hongkong Jet has its ISBAO-2, and is well on its way toward ISBAO-3. Their team of five in corporate safety, quality, and security work around the clock to ensure the highest standards are met. “No matter how small the incident - it gets reported, and everyone gets to see and hear about it. ” When asked about a non-punitive culture, White felt that it “takes time for employees to trust and believe that when something happens, they don’t get punished, instead the goal is to find solutions. ” More importantly, White stressed that it does not help when a company has a safety expert providing safety - only to have the company’s senior management not cooperating for financial reasons, effectively undermining crucial safety initiatives. “Hongkong Jet is very fortunately that its management is completely on board. We will enhance and continue to grow with a safety culture,” said White, who continued “As the industry has learned, loss of safety is not just a loss of life - it is a loss of reputation, it is a loss of finances. It’s the foundation to any business in aviation. “

Beyond safety, lies trust. According to White, the business aviation industry is an emotional one, at a certain level. “You have an individual or company that wants to buy an airplane, and in the end you have a choice of five airplanes that meet your mission requirements and do their jobs equally well. Typically, at the end of the day, it is an emotional decision which one you choose. If you have the ability to develop the relationship with the right people, and if they trust you, then you get the business,” said White, who believed that there are “four elements to trust - reliability, openness, congruence, acceptance. If any one of those elements are not there, trust vanishes. “

According to White, the China market is growing very rapidly in terms of the number of business jets, with a compound growth of roughly 35% percent annually. Though with that growth, unfortunately, the infrastructure is not growing in parallel. All the regulations that may be unnecessary, combined with far too many hindrances for owning a business jet such as the inflexibility of short notice flights or getting the approvals in China, may defeat or undermine the purpose of traveling via a business jet.

“Day by day, the infrastructure development is far too slow to keep up with the growth of the industry. Take the pilots for example - the industry here has had to hire foreign pilots for most flight crew positions. Local pilots are available but many of them are tied up with contracts with the airlines,” noted White, who felt that the other major issue the industry faces is fuel pricing - where currently, Hong Kong has by far the most expensive fuel in the region. “If you’re a business jet, you’re paying about 50% higher than what the airlines pay for the same fuel, and there is no reason for that,” said White, who pointed out that if the market has 100 business jets parked at the HKBAC, that is bigger than what most airlines have. Sadly, White noted that this may never change unless there is some competition brought on to the business aviation terminal in Hong Kong.

As the international business aviation arm of HNA, Hongkong Jet has recently expanded its operations by acquiring a share of Hawker Pacific, growing its business to FBO operations and services, and effectively becoming a “cousin” of the Asian Sky Group, whose parent company SEACOR Holdings own approximately 33% of Hawker Pacific’s common equity. With a bright spot on the horizon, Hongkong Jet is poised to soar progressively higher in this rapidly growing region.

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 47 FLEET ADDITIONS – ASIA PACIFIC Net Additions - 2014 Boeing 7 (7%) Airbus 3 (3%) Eclipse 1 (1%) Hawker 1 (1%) Cessna 8 (8%) Sabreliner 1 (1%)

Embraer 10 (10%)

Gulfstream 31 (32%) +97 Dassault 13 (14%)

Bombardier 22 (23%)

New Deliveries Pre-owned Deliveries

Boeing 4 (5%) Airbus 3 (3%) Sabreliner 1 (2%) Eclipse 1 (2%) Embraer 2 (5%) Embrer 8 (9%) Gulfstream 30 (35%) Cessna 2 (5%) Gulfstream 13 (31%) Cessna 9 (10%) Boeing 3 (7%)

Dassault 10 +87 Hawker 5 +42 (12%) (12%)

Bombardier 23 (26%) Dassault 6 (14%) Bombardier 9 (22%)

Deductions Dassault 3 (9%)

Gulfstream 12 (38%) Cessna 3 (9%)

Hawker 4 (13%) -32

Bombardier 10 (31%)

48 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Net Additions Per Model – New vs Pre-owned 97 in total The most popular business jet models to be added to the Asia Pacific fleet in 2014 were the Gulfstream G550, G450, Bombardier Global 6000 and Dassault Falcon 7X.

Global 6000 -1 10 1 Gulfstream G550 -5 12 3 Gulfstream G450 -4 10 3 Falcon 7X -1 7 2 Legacy 600/650 5 1 Gulfstream G650 4 2 Challenger 870 6 Lineage 1000/E 3 1 Global 5000 -1 4 1 Gulfstream G280 4 Citation XLS/+ 3 1 BBJ2 3 1 Hawker 400/A/XP 3 BBJ 1 2 Hawker 800A/B/XP 2 Falcon 900LX 1 1 Citation Sovereign/+ -1 2 1 Deductions Citation Mustang 2 New Deliveries Challenger 800/850 2 Pre-owned Sabreliner 65 1 Learjet 35/A/36A 1 Global Express XRS 1 Gulfstream IVSP 1 Gulfstream G200 -3 4 Falcon 50 1 Falcon 2000S 1 Falcon 2000LXS 1 Eclipse 500 1 Citation X+ 1 Citation CJ4 1 ACJ330 1 ACJ320 1 ACJ319 1 Learjet 60XR -1 1 Falcon 2000LX -2 2 Challenger 605 -2 2 Challenger 300 -1 1 Hawker 900XP -1 Global Express -2 1 Citation VI/VII -1 Citation CJ3 -1 Challenger 601 -2 1 Hawker 4000 -3 Note: Deductions were only counted for the Greater China Market.

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 49 2014 New Deliveries by Country and Aircraft Model 87 in Total

The large majority of 2014 business jet net additions in Asia Pacific were for aircraft based in China, Hong Kong and Singapore, representing 77.5% of total additions, or 44.2%, 24.8% and 8.5% respectively. Macau China Hong Kong Singapore Indonesia Philippines Thailand Japan Malaysia South Korea Taiwan Total ACJ319 1 1 ACJ320 1 1 ACJ330 1 1 BBJ 1 1 BBJ2 1 1 1 3 Challenger 300 1 1 Challenger 605 2 2 Challenger 870 6 6 Citation CJ4 1 1 Citation Mustang 2 2 Citation Sovereign/+ 2 2 Citation X+ 1 1 Citation XLS/+ 3 3 Falcon 2000LXS 1 1 Falcon 2000S 1 1 Falcon 7X 6 1 7 Falcon 900LX 1 1 Gulfstream G280 4 4 Gulfstream G450 4 3 2 1 10 Gulfstream G550 8 2 1 1 12 Gulfstream G650 2 1 1 4 Global 5000 1 2 1 4 Global 6000 3 4 2 1 10 Legacy 650 5 5 Lineage 1000 1 1 Lineage 1000E 1 1 2 Total 48 18 8 3 3 2 1 1 1 1 1 87

50 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 2014 Pre-Owned Deliveries by Country and Aircraft Model 42 in Total Malaysia Indonesia Hong Kong China Singapore Japan Philippines Taiwan Macau Myanmar Thailand Total Total BBJ 2 2 ACJ319 1 1 ACJ320 1 1 BBJ2 1 1 ACJ330 1 1 Challenger 601 1 1 BBJ 1 1 Challenger 800 1 1 BBJ2 1 1 1 3 Challenger 850 1 1 Challenger 300 1 1 Citation Sovereign/+ 1 1 Challenger 605 2 2 Challenger 870 6 6 Citation XLS/+ 1 1 Citation CJ4 1 1 Eclipse 500 1 1 Citation Mustang 2 2 Falcon 2000LX 1 1 2 Citation Sovereign/+ 2 2 Falcon 50 1 1 Citation X+ 1 1 Falcon 7X 2 2 Citation XLS/+ 3 3 Falcon 900LX 1 1 Falcon 2000LXS 1 1 Falcon 2000S 1 1 Gulfstream G200 2 1 1 4 Falcon 7X 6 1 7 Gulfstream G450 2 1 3 Falcon 900LX 1 1 Gulfstream G550 2 1 3 Gulfstream G280 4 4 Gulfstream G650 2 2 Gulfstream G450 4 3 2 1 10 Gulfstream IV-SP 1 1 Gulfstream G550 8 2 1 1 12 Gulfstream G650 2 1 1 4 Global 5000 1 1 Global 5000 1 2 1 4 Global 6000 1 1 Global 6000 3 4 2 1 10 Global Express 1 1 Legacy 650 5 5 Global Express XRS 1 1 Lineage 1000 1 1 Hawker 400/A/XP 1 1 1 3 Lineage 1000E 1 1 2 Hawker 800A/B/XP 2 2 Total 48 18 8 3 3 2 1 1 1 1 1 87 Learjet 35/A/36A 1 1 Learjet 60/XR 1 1 Legacy 600 1 1 Lineage 1000 1 1 Sabreliner 65 1 1 Total 14 9 4 3 3 2 2 2 1 1 1 42

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 51 2014 Deductions by Country and Aircraft Model 32 in Total

Hong Kong China Macau Taiwan Total Challenger 300 1 1 Challenger 601 2 2 Challenger 605 1 1 2 Citation CJ3 1 1 Citation Sovereign/+ 1 1 Citation VI/VII 1 1 Falcon 2000LX 2 2 Falcon 7X 1 1 Gulfstream G200 1 2 3 Gulfstream G450 3 1 4 Gulfstream G550 3 1 1 5 Global 5000 1 1 Global 6000 1 1 Global Express 2 2 Hawker 4000 1 2 3 Hawker 900XP 1 1 Learjet 60/XR 1 1 Total 16 10 3 3 32

52 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

GREATER CHINA

GREATER CHINA – MARKET TRENDS

In the context of the Asia Pacific region, not too surprisingly due to the dominance of the China market, the Greater China business jet fleet at the end of 2014 represents the lion’s share of the installed fleet in the Asia- Pacific region with 59% of the aircraft (439 in total). Individually, China represents 40% of the Asia Pacific fleet, followed by Hong Kong with 15%, Taiwan 2% and Macau 1%.

Compared to year-end 2013 however, the Greater China fleet grew only 15.5% in 2014 pulled down by lower fleet growth in China specifically and consequently, the Greater China fleet portion of the total Asia Pacific fleet remained unchanged 2013 to 2014.

From an OEM’s perspective and whether their fortunes will rise or fall in the Asia Pacific region in the near future, different manufacturers have very different dependencies on the Greater China market. Keeping in mind that the Greater China market is very much a large cabin / long range market, it is not too surprising that Hawker and Cessna have just over a third (32% and 37%) of their Asia Pacific fleet based in Greater China versus 83%, 72%, 72% and 64% for Airbus, Dassault, Gulfstream and Bombardier respectively. Of note are Embraer and Boeing (57% and 39%), with Embraer having a large fleet in Indonesia to counter balance Greater China, and Boeing doing very well at placing aircraft throughout the Asia Pacific region.

Year-End 2014 Review

In ASG’s 2013 year-end business jet fleet report, it was expected that the Greater China market would grow at 20% and reach 445 aircraft by the end of 2014. ASG also highlighted a number of market drivers that could end up influencing these numbers.

These market drivers were:

● Austerity measures put in place by the Central Government in Beijing ● The introduction of a more clearly defined tax structure for business jets registered in China ● Operational and infrastructure issues like parking constraints in Hong Kong

To these we can also now add:

● Spending fears linked to the on-going corruption crackdown by the Central Government ● The slowing pace of GDP growth in China

In line with ASG’s predictions, market drivers did exactly as expected and 2014 saw growth in the Greater China market of only 15.5% - a drop of 5% from the growth rate achieved from 2012 to 2013. The net number of aircraft (new deliveries plus pre-owned additions minus deletions from the market) added to Greater China in 2014 was 59 in total versus 64 in 2013 and over 100 in 2012. The Greater China market is very much in decline.

When breaking the 2013 net numbers down even further versus 2014, new aircraft deliveries held up through 2014 (+21%) and even deletions decreased (-17%). The big change was therefore in the pre-owned deliveries. In 2013, pre-owned aircraft represented almost half the additions to the Greater China fleet. In 2014 this number was just 28%. In 2013 there was almost an insatiable, immediate demand for aircraft in Greater China. The only way to meet this requirement was through more pre-owned aircraft sales, with a vast majority of these sales being relatively new, i.e. recently delivered & low time pre-owned aircraft. With the austerity measures and corruption crackdown gaining steam through the course of 2014 however, buyer demand and sentiment declined, directly impacting pre-owned aircraft sales.

54 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

Winners and Losers in 2014

If we look at China, Hong Kong, Taiwan and Macau individually, the net business jet fleet growth for 2014 in China and Hong Kong were almost the same: 16.0% versus 16.3%. This represents a considerable change in the growth rate of these 2 key markets. In 2013, China’s fleet grew at 26.7% and Hong Kong at a mere 5.4%. This change in fortunes is directly attributable to the market drivers outlined above.

Examining Greater China’s net growth further, in the dominating large size category and up, there were only two OEMs that added more aircraft in 2014 than in 2013. These were Boeing and Embraer, recognizing though that these OEMs also have amongst the smallest market shares in Greater China. All the other OEMs – Gulfstream, Bombardier, Falcon and Airbus added less aircraft in 2014 than in 2013.

On the important topic of new aircraft deliveries, Gulfstream, Bombardier, Cessna and Boeing all increased their deliveries of new aircraft into Greater China in 2014 (however, see “Forecast for 2015”). All the other manufacturers either saw flat growth or delivered fewer new aircraft than in 2013. The top 4 aircraft models delivered in 2014 were the G550, the G450, Falcon 7X and Global 6000.

For pre-owned aircraft deliveries, only Falcon and Hawker saw increases and only Gulfstream saw their deletions increase.

Of note is also the small 2014 net growth in the Light and Very Light size categories. This is directly attributable to the opening up of the lower airspace across China which is in turn encouraged growth in the flight training sector. The only category which has seen a declining growth year on year 2012 through 2014 is the Medium size category.

NET FLEET GROWTH 2012-2014 Per Aircraft Base

297

256 2012 2013 2014

202

114 93 98

17 14 11 11 7 15

China Hong Kong Macau Taiwan

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 55 GREATER CHINA

Net Fleet Growth 2012-2014 by OEM

161 2012 2013 2014 142

123 117 111

41 38 34 35 31 25 28 19 20 19 18 20 16 14 12 8 4 7

Gulfstream Bombardier Dassault Cessna Embraer Hawker Airbus Boeing

Net Fleet Growth 2012-2014 by Size Category

153 151

134 2012 2013 2014 122

103 91

63 58 54

39 28 20 23 21 22 20 16 17

Corp. Airliner Long Range Large Medium Light Very Light

56 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

Net Fleet Growth by Models 2012-2014 – Top 40 Models

64 2012 2013 2014

52 52

33 30 25 23 22 22 21 20 19 17 17 16 13 14 1313 12 12 10 11 9 9 5 5 1

Gulfstream Gulfstream Falcon 7X Challenger Gulfstream Challenger Global Legacy Citation Global G550 G450 605 G200 850 5000 650 CJ1/+ 6000

13 11 11 10 10 10 9 9 8 8 8 8 8 8 8 8 7 7 8 7 7 6 6 5 5 5 5 4 3 2

Challenger Citation XLS/+ BBJ Hawker CRJ200 VIP ACJ319 Challenger Global Express Lineage ACJ318 870 /Excel 800/850 300 XRS 1000/1000E

9 7 6 6 5 5 5 5 5 5 4 4 4 4 4 4 4 4 4 4 4 4 3 4 3 3 2 1

Falcon Global Citation Learjet A319ER Challenger Gulfstream Gulfstream Gulfstream V Hawker 900LX Express Sovereign/+ 35/36 604 G280 IV/IV-SP 400/XP/XTi

6 4 4 4 4 5 3 3 3 3 3 2 2 2 2 2 2 3 2 1 1 1 1 2 2 2

Learjet Citation Gulfstream Hawker Legacy BBJ2 Citation Citation Falcon Falcon 60/60XR Mustang G650 900/XP 600 II/Bravo S/II 2000LX 900DX/EX

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 57 GREATER CHINA

Net Fleet Change by Model 2012-2014

2012 2013 2014

3 3 1 6 13 4 3 6 1 2 4 5 1 7 2 1 1 1 5 4 2 3 1 4 2 2 3 2 2 1 2 2 3 1 1 17 1 2 1 1 1 1 -1 -1 -2 -1 -1 -1 -1 -1 -2 -2 1 -3 -4 -1 -3 -2 -1 -2 -1 -2 BBJ BBJ2 ACJ319 ACJ318 ACJ320 ACJ330 CRJ200VIP Citation CJ1 Citation CJ3 Global 5000 Global 6000 Citation Excel Learjet 60/XR Learjet Airbus 319VIP Global Express Challenger 870 Challenger 601 Challenger 300 Challenger 604 Challenger 605 Challenger 850 Citation Mustang Global Express XRS Citation Sovereign/+

58 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

9 19

12 5 22

3 4 12 3 2 2 2 7 5 3 2 1 2 4 4 2 2 2 2 1 2 2 1 1 1 2 1 1 1 1 1 1 -1 -1 -1 -1 -1 -1 -1 1 -2 -2 -4 -1 -3 -4 -5 -3 -1 -6 -6 -2 -4 -5 Citation X Falcon 7X Falcon Legacy 600 Hawker 750 Hawker Falcon 2000 Falcon Leagacy 650 Gulfstream V Phenom 300 Hawker 4000 Hawker Citation VI/VII Falcon 900LX Falcon Lineage 1000 Citation XLS/+ Hawker 900XP Hawker Lineage 1000E Gulfstream IV-SP Gulfstream G100 Gulfstream G200 Gulfstream G280 Gulfstream G450 Gulfstream G550 Gulfstream G650 Hawker 400 /A/XP Hawker Hawker 800 A/B/XP Hawker

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 59

GREATER CHINA

AIRCRAFT ADDITIONS AND DEDUCTIONS

2014 59 Net Additions 68 New Deliveries 26 Pre-owned Additions 94

-35 Deductions

Net Additions 59

2013 64 Net Additions

56 New Deliveries 50 Pre-owned Additions 106

-42 Deductions

Net Additions 64

2012 102 Net Additions

Additions 111

-9 Deductions

Net Additions 102

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 61 GREATER CHINA

Net Additions in 2014 59 in total Falcon 7X -1 7 2

Gulfstream G550 -6 11 3

Global 6000 -1 7 1

Challenger 870 6

Gulfstream G450 -5 8 3

Legacy 650 5

Gulfstream G280 4

BBJ 1 2

Global 5000 -1 3 1

Citation XLS/+ 3

Hawker 800A/B/XP 2

BBJ2 2

Citation Mustang 2

Falcon 900LX 1 1

Lineage 1000 1 1

Lineage 1000E 2 Deductions Gulfstream 650 2 New Deliveries ACJ330 1 Pre-owned ACJ320 1

Challenger 850 1

Global Express XRS 1

Falcon 2000S 1

Hawker 400/A/XP -1 1

Learjet 60/XR -1 1

Citation Sovereign/+ -1 1

Citation VI/VII -1

Hawker 900XP -1

Challenger 300 -1

Citation CJ3 -1

Global Express -2 1

Falcon 2000LX -2 1

Gulfstream G200 -4 3

Challenger 605 -2

Challenger 601 -2 -3 Hawker 4000 -3

62 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

New Deliveries by OEM 2013-2014

25 2013 2014

19 16 14

10 9 8 8 5 2 3 2 2 1

Gulfstream Bombardier Dassault Embraer Cessna Boeing Airbus

MODEL 2013 2014 ACJ318 1 - ACJ319 1 - ACJ320 - 1 ACJ330 - 1 BBJ 1 1 BBJ2 - 2 Challenger 300 1 - Challenger 605 4 - Challenger 850 1 - Challenger 870 - 6 Global 5000 1 3 Global 6000 3 7 Citation CJ1 1 - Citation Sovereign/+ 1 - Citation Mustang - 2 Citation XLS/+ - 3 Falcon 7X 11 7 Falcon 900LX 2 1 Falcon 2000 1 1 Legacy 600 1 - Legacy 650 4 5 Lineage 1000/E 2 3 Phenom 300 1 - Gulfstream G280 - 4 Gulfstream G450 13 8 Gulfstream G550 5 11 Gulfstream G650 1 2 Total 56 68

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 63 GREATER CHINA

Pre-owned by OEM 2013-2014

20 2013 2014 17

9 6 5 4 3 3 2 2 1 1 1 1 1

Gulfstream Bombardier Dassault Hawker Boeing Embraer Cessna Airbus

MODEL 2013 2014 ACJ318 1 - ACJ319 2 - BBJ 2 2 Challenger 604 3 - Challenger 605 3 - Challenger 850 5 1 CRJ200VIP 1 - Global 5000 3 1 Global 6000 2 1 Global Express 1 1 Global Express XRS 2 1 Learjet 60/XR - 1 Citation Sovereign/+ 2 1 Citation VI 1 - Citation X 1 - Citation XLS 1 - Falcon 2000LX - 1 Falcon 7X 1 2 Falcon 900LX - 1 Legacy 600 1 - Lineage 1000 - 1 Gulfstream G100 1 - Gulfstream G200 3 3 Gulfstream G450 6 3 Gulfstream G550 7 3 Hakwer 400/A/XP - 1 Hawker 800A/B/XP - 2 Hawker 4000 1 - Total 50 26

64 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

Deductions by OEM 2013-2014

2013 2014

15 11 11 10 9 6 4 3 3 3 1 1

Gulfstream Bombardier Hawker Dassault Cessna Airbus Embraer

MODEL 2013 2014 ACJ318 1 - Challenger 300 - 1 Challenger 601 - 2 Challenger 605 4 2 CRJ200VIP 1 - Global Express 3 2 Global Express XRS 2 - Global 5000 - 1 Global 6000 1 1 Learjet 60/XR - 1 Citation CJ3 - 1 Citation XLS/+ 5 - Citation Sovereign/+ 1 1 Citation VI/VII - 1 Falcon 2000 3 - Falcon 2000LX - 2 Falcon 7X - 1 Lineage 1000 1 - Gulfstream G200 4 4 Gulfstream G450 6 5 Gulfstream G550 - 6 Gulfstream IV 1 - Hawker 750 4 - Hawker 800A/B/XP 2 - Hawker 900XP 2 1 Hawker 4000 1 3 Total 42 35

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 65 GREATER CHINA

Fleet by Operator & Models – 2012-2014

Deer Jet 2012 2013 2014 21 57 67 70 20 18

13 12

7 7 6 6 6 6 4 4 3 3 33 3 33 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1

BBJ

ACJ319 ACJ320 A319ER Falcon 7X Falcon Global 6000 Global Gulfstream V Gulfstream Hawker 4000 Hawker Falcon 900LX Falcon Gulfstream IV Gulfstream Falcon 2000S Falcon Challenger 605 Hawker 900/XP Hawker Gulfstream IV-SP Gulfstream Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream Hawker 800/850 Hawker Global Express XRS Express Global

BAA 2012 2013 2014 34 40 45

9 8 8 8 7 7 5 5 4 4 4 2 2 3 3 3 2 3 2 3 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

ACJ319 ACJ318

Falcon 7X Falcon Global 6000 Global Hawker 4000 Hawker Falcon 900LX Falcon Falcon 900EX Falcon Learjet 60/XR Learjet Citation CJ1/+ Citation Lineage 1000E Lineage Challenger 605 Challenger 850 Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream

TAG Aviation 2012 2013 2014 25 34 49 9 8 7 6 5 3 4 4 4 4 4 4 3 3 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

ACJ319 Falcon 7X Falcon Legacy 600 Legacy 650 Legacy Global 5000 Global 6000 Global Falcon 900LX Falcon Lineage 1000 Lineage Learjet 60/XR Learjet Global Express Global Falcon 2000LX Falcon Challenger 300 Challenger 604 Challenger 605 Challenger 850 Challenger Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream G650 Gulfstream Global Express XRS Express Global

66 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

Metrojet 2012 2013 2014 28 30 35

14 13 12

5 4 4 3 3 3 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

BBJ Legacy 600 Legacy 650 Legacy Global 5000 Global Gulfstream V Gulfstream Lineage 1000 Lineage Citation XLS/+ Citation Global Express Global

Challenger 604 Challenger 605 Challenger 850 Challenger Gulfstream IV-SP Gulfstream Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream Global Express XRS Express Global Citation Sovereign /+ Sovereign Citation

Jet Aviation 2012 2013 2014 21 22 30

8 8 8 7 4 4 3 4 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1

ACJ318 Falcon 7X Falcon Citation CJ3 Global 5000 Global 6000 Global Falcon 900LX Falcon Global Express Global Challenger 605 Challenger Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream G650 Gulfstream

China Eastern 2012 2013 2014 11 14 16

5 3 3 3 3 3 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ACJ318 Legacy 650 Falcon 2000LX Falcon Challenger 300 Gulfstream G200 Gulfstream G450 Gulfstream G550 Gulfstream Global Express XRS Express Global Hawker 800A/B/XP Hawker Citation Sovereign /+ Sovereign Citation

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 67 GREATER CHINA

Minsheng Int’l Jet 2012 2013 2014 6 6 6 14

3 2 2 2 1 1 1 1 1 1 1 1 1 1 1

Falcon 7X Falcon

Legacy 650 Legacy Falcon 2000 Falcon

Lineage 1000 Lineage Falcon 900DX Falcon Lineage 1000E Lineage Hawker 900/XP Hawker Gulfstream G280 Gulfstream G450 Gulfstream G550 Gulfstream Citation Sovereign/+ Citation Citation XLS/+/Excel Citation

China United 2012 2013 2014 17 18 13 7 7 5 5 5 5 3 3 2 2 2 1 1

ACJ319 CRJ200VIP Citation VI/VII Citation Challenger 870 Citation Bravo/II Citation

Lily Jet 2012 2013 2014 8 11 12 5 4 3 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 CRJ200VIP Global 5000 Global 6000 Global Global Express Global Challenger 604 Challenger 605 Challenger 850 Gulfstream G200 Gulfstream Global Express XRS Express Global

Hongkong Jet 2012 2013 2014 4 7 12

2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

BBJ ACJ319 ACJ318 Falcon 7X Falcon Legacy 650 Global 5000 Global Hawker 4000 Hawker Global Express Global Challenger 605 Gulfstream G450 Gulfstream G550 Gulfstream G650 Gulfstream Global Express XRS Express Global

68 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 69 GREATER CHINA

FOREIGN AIRCRAFT OPERATION HIGHLIGHTS* IN CHINA

Aerodrome – Specific Restrictions Landing Slot Restictions

Beijing Capital Int’l Airport No takeoff between 07:00 - 09:59 Beijing Capital Airport (ZBAA) No double (ZBAA) Only one slot avialable 06:00 - 23:59 Shanghai Hongqiao Airport (ZSSS) movement Shanghai Pudong Airport (ZSPD) between N o t a k e o f f & l a n d i n g b e t w e e n 0 0 : 0 0 - 0 5 : 5 9 Shanghai Hongqiao Airport Guangzhou Baiyun Airport (ZGGG) 08:01 - (ZSSS) Not allowed to operate to/from the east / Shenzhen Bao’an Airport (ZGSZ) 21:59 northeast direction between 07:00 - 22:59

Jiamusi Hulumbuir Sponsor Letters Mudanjiang • Inviting company background info • Purpose of flight and visit Yanji • Passenger detailed info Beijing • Contact methods of the sponsor • Aircraft regulations Weihai • Flight number • Aircraft model • Full schedule Chengdu Shanghai

Taipei

Guangzhou

Haikou Hong Kong

Airport Restrictions China Landing Permit Regulations

Jiamusi Dongjiao Airport (ZYJM) Not open except for Within China: Mudanjiang Hailang Airport (ZYMD) Russian registered Landing permit application to be subimitted 2 to 3 days in advance. Hulunbuir Hailar Airport (ZBLA) aircraft Landing permit application cannot be changed more than twice. Yanji Chaoyangchuan Airport (ZYYJ) Not open except for One permit may only contain 6 sectors. Mudanjiang Hailang Airport (ZYMD) South Korea registered For domestic flight operations: Weihai Dashuibo Airport (ZSWH) aircraft A Chinese navigator must be arranged beforehand Both government and sponsor letter are needed At least 7 working days are required to apply. Once submitted, it may *information provided by AsBAA not be revised.

70 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 GREATER CHINA

FORECAST FOR 2015

The forecast for 2015 for the Greater China market is dire indeed. For one, all of the market drivers noted earlier Landing Slot Restictions in this report will remain throughout the year and continue to negatively influence buying sentiment in the Greater China market. ASG also expects pre-owned activity to remain low and deductions to increase as more and more owners either sell their existing aircraft or move them out of the region. But whereas 2014 was propped up by new aircraft deliveries from the OEMs, this will not be the case in 2015. As noted earlier, new aircraft deliveries slightly increased in 2014. However, this was the end result from orders placed in 2012 and 2013. 2015 will see a decline in new deliveries as OEM sales in Greater China declined in 2014.

Additionally a major influence on new aircraft deliveries by OEMs in 2015 will be the existing backlog with the Chinese leasing companies. By ASG’s estimation, between the 5 main Chinese business jet leasing companies, there exists roughly 30 new aircraft either delivered and unsold or due to be delivered in 2015 hanging over the market. These new aircraft will in particular present significant market challenges to Gulfstream and Bombardier throughout the year as both these OEMs and leasing companies compete for the same base of dwindling potential buyers. Of note and a harbinger for deliveries beyond 2015, even though these leasing companies have historically been large buyers of new aircraft, they are unlikely to place any new orders in 2015.

The potential silver lining is that while the combined effects of slowing GDP and the government’s austerity / anti- corruption measure have weighed heavily on the Greater China market in 2014, the relatively favourable exchange rate, combined with willing sellers, willing operators and willing financiers in 2015 should provide a small measure of positive outlook for the market.

All things considered through, ASG is still predicting the Greater China market to slow overall in 2015 and growth to be in the area of just 10%.

No of Growth Aircraft Rate % +49.8% 500 480 50% 439 +42.3% +41.5%

400 380 40%

316 300 +28.3% 30% +25.4%

211 +20.3% 200 20% 148 +15.5% 118 +9.33% 100 92 10% 65

0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 71

SUPPORT INFRASTRUCTURE Airbus

Maintenance Service Centres in Asia Pacific

Line Heavy Facility Location Aircraft Model Maintenance Maintenance Spare Parts Refurbishment Beijing Support Centre Beijing, China ● ST Aerospace Singapore ACJ318/319/320 ● ● Sepang Engineering KL, Malaysia ACJ318/319/320 ● ● ● ● HNA Aviation Technik Haikou, China ACJ318/319/320 ● ● China Eastern Technik Shanghai, China ACJ318/319/320 ● ● AMECO Beijing, China ACJ318/319 ● STARCO Shanghai, China ACJ318/319/320 ● ● STAECO Jinan, China ACJ318/319/320 ● ● TAECO Xiamen, China ACJ318/319/320 ● ● HAECO Hong Kong ACJ319/320 ● ●

Training Centres Worldwide

Hamburg, Germany

Toulouse, France Beijing, China

Miami, Florida, USA

Bangalore, India

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 73 Boeing

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Beijing Service Centre Beijing, China BBJ/BBJ1/BBJ2 ● Boeing Shanghai Service Shanghai, China BBJ/BBJ1/BBJ2 ● ● ● AMECO Beijing, China BBJ/BBJ1/BBJ2 ● ● STARCO Shanghai, China BBJ ● STAECO Jinan, China BBJ ● TAECO Xiamen, China BBJ/BBJ1/BBJ2 ● ● SMECO Chengdu, China BBJ ● HAECO Hong Kong BBJ/BBJ1/BBJ2 ● ● Jet Aviation Singapore BBJ/BBJ1/BBJ2 ● ST Aerospace Singapore BBJ/BBJ1/BBJ2 ● ●

Training Centres Worldwide

London Gatwick, UK Seattle, Washington, USA Istanbul, Turkey Atlanta, Georgia, USA Casablanca, Morocco Incheon, South Korea Miami, Florida, USA Mexico City, Mexico

Singapore

Brisbane, Australia Sydney, Australia Buenos Aires, Argentina Melbourne, Australia

74 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Bombardier

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Bombardier Service Centre Singapore Learjet, Challenger and Global ● ● ● ● Shanghai Hawker Pacific Shanghai, China Global ● ExecuJet Haite Tianjin, China L60, CL604/605, Global ● STAECO Jinan, China CRJ200, CL604/605, Global ● ● Metrojet Hong Kong CL300, CL604/605, CL800, Global ● Jet Aviation Singapore L40/45, L60, CL300, CL604/605, Global ● ● ExecuJet Malaysia KL, Malaysia L60, CL300, CL604/605, CL800, Global ● Airworks Mumbai, India L60, CL300, CL604/605, Global ● JAMCO Sendai, Japan Global ● ● Jet Aviation Hong Kong CL604/605, Global ● ST Aerospace Singapore L40/45, L60 ●

Training Centres Worldwide

Amsterdam, Netherlands

Burgess Hill, West Sussex, UK Montreal, Canada

Dallas, Texas, USA Morristown, New Jersey, USA

Houston, Texas, USA Dubai, UAE Toluca, Mexico

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 75 Cessna

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Cessna Service Centre Singapore Cit Mustang, XLS, Sovereign ● ● ● ● Beijing Dingshi GA Beijing, China Cit XL, Sovereign, X ● ● Shanghai Hawker Pacific Shanghai, China Cit XLS, Sovereign, X ● ● Okayama Air Service Okayama, Japan Cit 500s, Mustang, CJs, Sovereign ● ● SR Aviation Kuala Lumpur Cit CJ, Mustang, X ● ● Airworks Mumbai, India Cit II, Sovereign ● ● Jet Aviation Singapore Cit X ● Mjets Bangkok, Thailand Cit X, Mustang, CJs (except CJ4) ●

Training Centres Worldwide

Fairbanks, Alaska, USA Antwerp, Belgium British Columbia, Canada Hradec Kralove, Czech Republic Aurora, Oregon, USA Gig Harbor, Washington, USA Zurich, Switzerland Creswell, Oregon, USA Snohomish, Washington, USA Bend, Oregon, USA Seosan, South Korea Kapolei, Hawaii USA Riyadh, Saudi Arabia Maui, Hawaii, USA

Sydney , Australia

76 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Dassault

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Shanghai Hawker Pacific Shanghai, China F7X, F2000s, F900s ● Hawker Pacific Asia Singapore All Falcon products ● ● ● ● Dassault Business Services Beijing, China All Falcon products ● Jet Aviation Hong Kong F7X, F2000s, F900s ● ● Airworks Mumbai, India F900s ● TAJ Air Mumbai, India F2000EX, F2000EX EASy ● Siddhartha Logistics Co Pvt Ltd Mumbai, India All Falcon products ●

Training Centres Worldwide

Chichester, West Sussex, UK

Teterboro, New Jersey, USA Merignac, France Colombus, Ohio, USA Whippany, New Jersey, USA Wilmington, Delaware, USA Dallas, Texas, USA Dubai, United Arab Emirates Little Rock, Arkansas, USA

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 77 Embraer

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Embraer China Services Beijing, China All Embraer Models ● STAECO Jinan, China Legacy 600/650, Lineage 1000 ● ● ExecuJet Haite Tianjin, China Legacy 600/650, Lineage 1000 ● China Eastern Shanghai, China Legacy 600/650 ● ● Metrojet Hong Kong Legacy 600/650, Lineage 1000 ● Phenom 100/300, Legacy Hawker Pacific Asia Singapore ● ● 600/650, L1000 WJA Aviation Jakarta, Indonesia Legacy 600/650 ● Airworks Mumbai, India Phenom 100/300, Legacy 600/650 ● Indamer New Delhi, India Legacy 600/650, Lineage 1000 ● ●

Training Centres Worldwide

Paris, France St. Louis, Missouri, USA Dallas, Texas, USA Atlanta, Georgia, USA Long Beach, California, USA Houston, Texas, USA

Sao Paulo, Brazil

78 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Gulfstream

Maintenance Service Centres in Asia Pacific

Line Heavy Spare Facility Location Aircraft Model Maintenance Maintenance Parts Refurbishment Gulfstream Service Centre Beijing, China G200, G450, G550 ● ● ● ● GV, GIV/GIV-SP, G100, G150, G200, Metrojet Hong Kong ● ● G300, G350, G450, G550, G650 GIV/GIV-SP, G300/G400, G100, G150, Jet Aviation Hong Kong ● G200, G450, G500/550, G650 GV, GIV/GIV-SP, G100, G150, G200, Jet Aviation Pte Singapore ● ● G280, G300/G400, G450, G500/G550 G100, G200, G300/G400, G450, Airworks Mumbai, India ● ● G500/G550, GIV/GIV-SP, GV G300/G400, G500/G550, GIV/GIV-SP, JAMCO Sendai, Japan ● ● GV STAECO Jinan, China G450 ● ●

Training Centres Worldwide

Chichester, West Sussex, UK Colombus, Ohio, USA Dallas, Texas, USA Wilmington, Delaware, USA

Hong Kong Long Beach, California, USA Savannah, Georgia, USA

Haikou, China

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 79

FIXED-BASE OPERATORS (FBO) – ASIA PACIFIC

KBAS

Flightrans Jet

AVJET Asia AA Corporation C-jet FBO Beijing

IASS Seoul Tokyo Shanghai Hawker Pacific Business Aviation Centre Premier Gate Business Aviation

Shanghai Eva Sky Jet Centre

Taiwan Taoyuan Business Aviation Centre Macau Business Aviation Centre Executive Aviation FBO Hong Kong Taiwan Win Air Business Jet FBO Macau Deer Jet FBO Haikou Hong Kong Business Aviation Centre Sanya

MJets Bangkok Deer Jet FBO

Royal Skyways Jet Aviation

ASE Handling Universal Aviation

Wings Over Asia Kuala Lumpur Hawker Pacific Asia Singapore

Jarkarta Bali ExecuJet Indonesia

AeroHandlers

SkyPark Malaysia IndoAsia Ground Services

Nusantara Aviation Services

Smooth Route

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 81 s

82 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 s

Financing Institutions

Name Office Location Finance Lease Operating Lease GE Capital International ● CIT International ● ● BNP Paribas International ● UBS International ● Citi Bank International ● Bank of America International ● ● Credit Suisse International ● Goldman Sachs International ● Global Jet Capital International ● ● SMBC Aviation Capital International ● ● WellsFargo Bank Northwest, N.A. International ● LaserLine Lease Finance Corporation International ● Minsheng Bank China ● ● ICBC China ● Bank of China (BOC Aviation) China ● Industrial Bank China ● ● China Development Bank China ● China Merchants Bank China ● ● Agriculture Bank of China China ● ● Changjiang Leasing China ● ● AVIC Leasing China ● Shanghai Guojin Leasing China ● Anbang Insurance China ● China Huarong Financial Leasing China ● CITIC Futong China ● China Trust Taiwan ● Chailease Finance Taiwan ● ● ITC-Leasing, Inc. Japan ● ● Sumitomo Mitsui Finance and Lease Co., Ltd. Japan ●

Legal Firms

Involving an experience lawyer or law firm in the early stages of an aircraft sales and purchase is key to minimize both costs and potential problems relating to the aircraft for the long run. Aircraft transactions are complicated and involve a sizable number of documents, including sales and purchase agreement, financing agreement, aircraft management agreement, and all specification, registration, and importation documents, just to name a few. Due to the unique nature of aircraft transactions, industry experts and specialists in both the legal and commercial aspects of transactions will be needed to scrutinize each transaction as to ensure that seller or buyer’s legal interests are best protected and the best commercial terms are obtained. ASG will liaise with top law firms should legal services be required, and thereby ensure a smooth transaction both legally and commercially.

Law Firm Region Law Firm Region King & Wood Mallesons China Lee & Ko Korea Run Ming Law Offices China Yulchon LLC Korea Clifford Chance Hong Kong Yoon & Yang LLC Korea Clyde & Co Hong Kong Appleby Offshore Holman Fenwick William Hong Kong Bedell Cristin Offshore Mayer Brown JSM Hong Kong Carey Olsen Offshore Stephenson Harwood Hong Kong Conyers Dill & Pearman Offshore William K K Ho & Co. Hong Kong Harney Westwood & Riegels Offshore Lee and Li Taiwan Maples and Calder Offshore Tsar & Tsai Law Firm Taiwan Mourant Ozannes Offshore Shook Lin & Bok Indonesia Walkers Offshore Anderson Mori & Tomotsune Japan SyCip Salazar Hernandez & Gatmaitan Philippines Nagashima Ohno & Tsunematsu Japan Hogan Lovells Singapore Nishimura & Asahi Japan Milbank Singapore Squire Sanders Japan Watson Farley & Williams Singapore Bae, Kim & Lee Korea Siam Premier Thailand Kim & Chang Korea

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 83 INTERIOR COMPLETION CENTRES WORDWIDE

Fokker Air Services Papendrecht , South Holland, Netherlands

Lufthansa Technik Hamburg, Germany Kvand Aircraft Interiors Moscow, Russia

SR Technics Zurich, Switzerland

Delta Interior Design Sirone, Italy Amac Aerospace Haeco Private Jet Solutions Jet Aviation Management Xiamen, China Basel, Switzerland

Airbus Corporate Jet Centre Toulouse, France

JCB Aero Auch, France ST Aerospace Paya Lebar, Singapore Sabena Technics Bordeaux, France Flying Colours Corp Singapore

84 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Standard Aero, Associated Air Centre Gulfstream Completion Centre Springfield, IL, USA Appleton, WI, USA Jet Aviation Management St. Louis, MO, USA Comlux Completion USA Indianapolis, IN, USA Flying Colours Corp Bombardier Aerospace Peterborough, Ontario, Canada Wichita, KS, USA Cascade Aerospace Bombardier Aerospace Abbotsford, Canada Montreal, QC, Canada

Greenpoint Technologies Innotech Aviation Kirkland, WA, USA Montreal, QC, Canada

Cessna Completion Centre Wichita, KS, USA PATS Aircraft Systems Georgetown, DE, USA Flying Colours Corp St. Louis, MO, USA Gulfstream Completion Centre Long Beach, CA, USA Embraer Completion Centre Melbourne, FL, USA GDC Technics San Antonio, TX, USA Gulfstream Completion Centre Savannah, GA, USA

Gulfstream Completion Centre Duncan Aviation L-3 Platform Integration Brunswick, GA, US Hillaero Modification Waco, TX, USA Lincoln, NE, USA

Bizjet Dassault Falcon Jet Tulsa, OK, USA Little Rock, AR, USA

Gulfstream Service Centres Standard Embraer Completion Centre Aero, Associated Air Sao Paulo, Brazil Centre Dallas, TX, USA

Altitude Aerospace Interiors Auckland, New Zealand

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 85 OEM Completion Centres

NAME AIRCRAFT CAPABILITIES Airbus Corporate Jet Centre Airbus ACJ Family Bombardier Aerospace Bombardier, Learjet Dassault Falcon Jet Falcon Embraer Completion Centre Legacy 600/650, Lineage 1000 and Phenom 100/300 Gulfstream Service Centres Gulfstream Cessna Completion Centre Cessna

Independent Completion Centres

NAME AIRCRAFT CAPABILITIES Aeria Luxury Interiors Boeing and Airbus Altitude Aerospace Interiors Boeing BBJ and 787 Amac Aerospace Boeing 747/777/787, Airbus A330/340/380 Bizjet Boeing BBJ, 737CL, 737NG, Airbus ACJ Family and Gulfstream Cascade Aerospace Boeing Comlux Completion USA Boeing BBJ and Airbus ACJ Family Duncan Aviation Falcon, Gulfstream, Global, Challenger, Hawker, Learjet, Citation, Embraer, King Air, Astra / Westwind Elliott Aviation Hawker, Beechjet, Bombardier Flying Colours Corp Challenger, Global 5000/6000, Learjet, Hawker, Falcon, Cessna Citation Fokker Air Services Airbus ACJ family GDC Technics Boeing BBJ, 767, 787 and Airbus ACJ, A330, A340 Greenpoint Technologies Boeing BBJ Haeco Private Jet Solutions Boeing BBJ and Airbus ACJ Hillaero Modification Centre Learjet, King Air, Citation, Pilatus, Hawker, Beechjet, Diamond, Falcon, TBM, Meridian and Westwind Innotech Aviation Bombardier JCB Aero Boeing BBJ (B737 series) and Airbus ACJ (A320 series) Jet Aviation Management Boeing BBJ, Airbus ACJ, Bombardier, Gulfstream, Falcon, Hawker Kvand Aircraft Interiors Tu-134, TU-154B, M, YAK-40,YAK-42 L-3 Platform Integration Boeing 707/737/747/757, Airbus A310/340, MD11, Gulfstream, Lockheed Lufthansa Technik Airbus ACJ Family, Boeing 737CL, 737NG, 747, 767, 777, 787 PATS Aircraft Systems Boeing BBJ, 727, Lineage 1000 and CRJ200 Sabena Technics Airbus, ATR, Boeing, Bombardier, Embraer and Fokker SR Technics Airbus A320, A330, A340, A380, Boeing 737NG and MD11 ST Aerospace Boeing BBJ and Airbus ACJ Standard Aero, Associated Air Centre Boeing BBJ and Airbus ACJ, Falcon Jet, Challenger, Hawker, Gulfstream

86 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

CHARTER AIRCRAFT AVAILABILITY – ASIA PACIFIC

South Korea 2 Japan 7 China 41

Hong Kong Macau 2 11

Thailand 19 Philippines 1

Malaysia 3

Singapore 19

Indonesia 17

88 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Charter Aircraft Availability by Model

Hong South China Kong Macau Indonesia Japan Malaysia Philippines Singapore Korea Thailand Total ACJ318 1 1 ACJ319 1 1 2 BBJ 1 2 1 1 5 Boeing 727-100 1 1 Challenger 300 2 2 Challenger 601 1 1 Challenger 604 2 2 Challenger 605 2 1 1 1 5 Challenger 850 4 1 5 Global 5000 1 1 1 3 Global 6000 1 1 1 3 Global Express 1 1 Global Express XRS 2 1 1 4 Learjet 24 1 1 Learjet 35/A/36A 2 2 Learjet 45/XR 1 1 Learjet 60/XR 1 1 Citation Bravo 2 2 Citation CJ3 1 1 Citation Mustang 2 2 Citation V 3 3 Citation X 1 1 Citation XLS/+ 1 1 Citation Sovereign/+ 1 1 Citation VI/VII 1 1 2 CRJ200 VIP 1 1 Gulfstream G150 1 1 Gulfstream G200 2 2 4 8 Gulfstream G300 1 1 Gulfstream G450 5 1 1 7 Gulfstream G550 9 1 1 2 13 Gulfstream G650 2 2 Gulfstream V 1 1 Gulfstream IV-SP 1 1 2 Gulfsream V 1 1 1 3 Legacy 600 3 3 Legacy 650 2 2 4 Lineage 1000 1 1 Phenom 300 1 1 Falcon 2000LX 1 1 Falcon 7X 1 1 Hawker 400/A/XP 2 2 Hawker 800A/B/XP 1 2 2 5 Hawker 850XP 1 2 3 Hawker 900XP 4 4 Premier I/IA 1 1 Sabreliner 65 1 1 Nextant 400XT 1 1 Total 41 11 2 17 7 3 1 17 2 19 120

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 89 11 %

10%

700

650

600

550

500

450

400

350

300

250

200 PRE-OWNED AIRCRAFT FOR SALE – GLOBAL AVAILABILITY

Pre-owned Business Jet – % of Fleet for Sale

11 %

10% Hawker

Bombardier 9% Gulfstream

Embraer 8% Dassault

Cessna 7% Boeing Airbus

5% Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

Pre-owned Business Jet for Sale – Average Days on Market

700

650

600

550 Boeing 500 Cessna Hawker 450 Airbus 400 Bombardier Embraer 350 Dassault 300 Gulfstream

250

200 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

Source: Jetnet

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 91 AIRCRAFT MODELS POSITIONING Aircraft Total Yearly Cost vs Maximum Range

20 19 18 ACJ321 17 BBJ 3 ACJ320 16 15 ACJ319 BBJ 2 14 BBJ 13 ACJ318 12 Global 6000 G550 G650 G650ER 11 Lineage 1000E 10 Global 5000 Global Express XRS 9 G IV SP G450 CL 890 CS G350 G V 88 F 900LX F 7X Legacy 650 Global Express CL 870 CS F 900EX

7 CL 850 G300 G IV )

r F 2000LXS

a Legacy 600 e F 2000LX

Y 6

/ F 2000S CL 605 D

S CL 350

U CL 604 CL 300 n

o 5 i l

l F 2000EX i H 4000 G280 M ( H 900XP CIT Sovereign t F 50EX s G200

o H 850XP CIT X+ C 44 y l CIT XLS+ r CIT VII CIT Sovereign+ a L 75 e

Y G150

l L 45XR a t CIT Excel H 800XP o

T CIT Ultra G100 3 CIT Encore+ H 800 L 60XR H 400XP Astra SP Beechjet 400A L 70 CIT Bravo L 40XR Diamond 1A CIT CJ3+ CIT CJ4 22 Phenom 300 Premier IA CIT CJ2+ Corp. Airliner SJ30-2 CIT CJ1+ Nextant 400XTi Long Range

Phenom 100E CIT M2 Large HondaJet Medium CIT Mustang Light Eclipse 550 Very Light

11 1000 2000 3000 4000 5000 6000 7000 8000 Max Range (N.M.)

Note: Yearly Cost estimated includes Conklin & Decker 2014 industrial cost figures for new aircraft acquisiton cost + 5% ÷ 10 Years, plus yearly operating cost +25% to account for regional differences

92 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 Recent & Upcoming Aircraft Models

By Maximum Range

8000 G650ER Global 7000 Global 8000 Recently Upcoming Delivered 7000 Falcon 8X G600 6000

Falcon 5X G500 5000

Challenger 650

4000 Citation X+ Citation Longitude Challenger 350

3000 Citation Latitude Legacy 500 Learjet 70 Maximum NBAA FR Range (NM) Legacy 450 2000 Learjet 75 PC-24 Citation M2

1000 HondaJet

2013 2014 2015 2016 2017 2018 2019 2020

Expected First Delivery Year

By Cabin Volume

3000

Recently Global 7000 Upcoming Delivered 2500 Global 8000 G650ER

G600 2000 Falcon 5X

Falcon 8X G500 1500

Challenger 350 Legacy 500 Challenger 650 Cabin Volume (ft ³) Cabin Volume Citation Longitude 1000 Citation Latitude

Citation X+ PC-24 500 Learjet 70/75 Legacy 450

HondaJet Citation M2 0

2013 2014 2015 2016 2017 2018 2019 2020 Expected First Delivery Year

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 93 UPCOMING AIRCRAFT PROFILE UPCOMING AIRCRAFT PROFILE

DASSAULT FALCON 8X

Currently in development, Dassault’s new flagship, the Falcon 8X, is an ultra-long range jet that puts city pairs such as Hong Kong - Paris, London - Cape Town, and Los Angeles - Beijing within reach, with a range of 6,450 N.M. The trijet is powered by Pratt and Whitney Canada turbofans which, at 6,722 pounds, deliver 5% more thrust, and the new wing architecture lightens the wing and provides more space for fuel. As a trijet, the Falcon 8X will shorten transoceanic routes, and make short, stable approaches on landing. The PW300 series engines deliver more pounds of thrust per each pound of fuel, resulting in a reduction of NOx emissions that will rank 30% lower in the Falcon 8X than even the strictest of today’s standards. The operating cost of the Falcon 8X is 35% lower than its competitors. Flying at a maximum altitude of 51,000 feet, its maximum speed is Mach 0.90 Mach.

The Falcon 8X offers a choice of 30 layouts in its 42.67-foot cabin, the largest in the Falcon fleet. Noise and cabin altitude are kept low, and the air quality high. Complete connectivity is possible within the cabin, which is FalconCabin HD+ equipped and WiFi capable. The FalconCabin HD+ cabin management system gives passengers control over their environment from anywhere in the cabin through their Apple devices. Skybox, the wireless media server with vast iTunes video and music capacity, is also available as an option.

The three extra feet available in the Falcon 8X cabin can accommodate much more living space. Best of all, the space is highly configurable to meet the needs of each owner or operator. One can opt for a comfortable three-lounge cabin with a shower aft and crew rest provisions forward, or even go for a shorter entryway to add yet more lounge space. Other possibilities among

94 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 the 30 different cabin layouts include a large entryway with spacious, lie-flat crew quarters and a truly grand galley for multiple meals.

The totally redesigned cockpit is equipped with an EASy flight deck. A wide-screen, head-up display, an optional feature, integrates enhanced and synthetic vision to optimize situational awareness, even in low visibility conditions. The cockpit also features the Honeywall next generation 3D color weather radar system with enhanced turbulence detection capability.

GENERAL MAX OPERATING ALTITUDE INTERNAL Typical Capacity 8 passengers / 3 crew 51,000 ft / 5,545 m Cabin Length 42.67 ft / 13 m Cabin Width 7.67 ft / 2.34 m PERFORMANCE EXTERNAL Cabin Height 6.17 ft / 1.88 m Max Range 6,450 N.M. / 11,945 km Length 80.2 ft / 24.46 m Cabin Volume 1,695 ft³/ 48 m³ Mmo M 0.90 Height 26.1 ft / 7.94 m Width 86.75 ft / 26.29 m WEIGHT POWERPLANT Max Takeoff Weight 73,000 lb / 33,113 kg P&W Canada 3 x PW307D Max Zero Fuel Weight 43,000 lb / 18,598 kg 6,722 lb / 29.9 kN

ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014 95 Your Association Needs YOU!

As young kids we all thought we could be super heroes. At AsBAA we help our members to become exactly that.

Get in touch with us today.

AsBAA is a non-proﬁ t driven Asia focused Business Aviation association founded in 2000. We are a member of IBAC and afﬁ liated with NBAA. For more information about us and how to join, visit our website: www.AsBAA.org or send an e-mail to: [email protected] 96 ASIA PACIFIC BUSINESS JET FLEET REPORT YEAR END 2014

AsBAA_Advertisement_216x279.indd 1 13-03-15 10:17 Your Association Needs YOU!

As young kids we all thought we could be super heroes. At AsBAA we help our members to become exactly that.

Get in touch with us today.

AsBAA_Advertisement_216x279.indd 1 13-03-15 10:17 The information contained in this report is provided free of charge for reference only. While such information was compiled using the best available data as of December 2014, ASG makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, or suitability of such information. ASG is not responsible for, and expressly disclaims any and all liability for damages of any kind, either direct or indirect, arising out of use, reference to, or reliance on any information contained within this report.

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