ASIAN SKY QUARTERLY SECOND QUARTER 2020
AIRCRAFT SPOTLIGHT BELL 505
COMMENTARY HFW | RECOVERY OF BUSINESS AVIATION
GLOBAL MARKET UPDATE GLOBAL JET CAPITAL | AMSTAT
ASIA-PACIFIC OUTLOOK METRICS & MOOD ASIA-PACIFIC FLIGHT ACTIVITY
SECOND QUARTER 2020 MARKET SUMMARIES JETS & HELICOPTERS ASM print ad 2020.pdf 2 7/10/20 4:44 PM
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www.asianskymedia.com | E-mail: [email protected] CONTENTS
04 ECONOMICS 32 GLOBAL MARKET UPDATE Overview of the Asia-Pacific’s region current status and Q1 GLOBAL JET CAPITAL specific country’s GDP versus their business jet and An analysis of the global market, including commentary on helicopter fleet size. the world economy, flight operations and OEM backlogs
10 MOOD & INTENTIONS 38 MARKET DYNAMICS Results of our survey on the Asia-Pacific region’s outlook on An analysis of APAC inventory levels, market trends and the economic status, aircraft utilization, purchase intentions and changing price signals for the business jet and helicopter fleets. influencing factors. 46 GLOBAL MARKET UPDATE 16 COMMENTARY JUNE 2020 AMSTAT RECOVERY OF BUSINESS AVIATION BY HFW An update on the pre-owned business jet market, including Gordon Gardiner of HFW discusses the impacts of Covid-19 the short-term impact of Covid-19 on transactions. on business aviation and how the industry will bounce back. 48 MARKET SUMMARY - JETS 20 AIRCRAFT SPOTLIGHT A look at market position and average days on market of BELL 505 featured pre-owned business jets. A look at the Bell 505 -- designed for safety, efficiency and reliability across mission types. 65 MARKET SUMMARY – HELICOPTERS A look at market position and average days on market of 23 SPECIAL FEATURE featured pre-owned helicopters. ASIA-PACIFIC FLIGHT ACTIVITY BY WINGX A look at the flight activity in Q2, including most popular flight routes and impact on flight activity from COVID-19.
27 PRE-OWNED MARKET ANALYSIS BELL 412 A comprehensive market performance analysis of the pre- owned Bell 412 market.
PUBLISHER advice should be sought before taking action on any no representation about the accuracy, completeness matters to which information provided in this report or any other aspect of information contained. The may be relevant. information, data, articles, or resources provided by any other parties do not in any way signify that ASG ASG shall not be liable for any losses, damage, costs EDITORIAL & MARKET RESEARCH endorses the same. or expenses howsoever caused, arising directly or Litalia Yoakum indirectly from the use of or inability to use this report Bowen Zhang or use of or reliance upon any information or material ADVERTISING/AIRCRAFT SALES ENQUIRIES: Maggie Gu provided in this report or otherwise in connection with [email protected] DESIGN any representation, statement or information on or Aya Leung contained in this report. Michael Wong ASG endeavors to ensure that the information Asian Sky Group contained in this report is accurate as at the date Tel: (852) 2235 9222 | Fax: (852) 2528 2766 of publication, but does not guarantee or warrant [email protected] The materials and information provided by Asian Sky its accuracy or completeness, or accept any liability www.asianskygroup.com | www.asianskymedia.com Group Limited (“ASG”) in this report is for reference of whatever nature for any losses, damage, costs only. Any information we provide about how we may or expenses howsoever caused, whether arising interpret the data and market, or how certain issues directly or indirectly from any error or omission in may be addressed is provided generally without compiling such information. This report also uses considering your specific circumstances. Such third party information not compiled by ASG. ASG information should not be regarded as a substitute is not responsible for such information and makes for professional advice. Independent professional
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 1 PUBLISHER’S NOTE
Oh, what a difference a quarter makes as hope grows and a recovery from Covid-19 starts to take hold in the aviation industry.
In China, the commercial airlines flew 26M passengers in May, down only 53% y-o-y; still a 16% improvement from April. Some projections even see a full recovery to pre-Covid-19 levels by the end of August and “possibly even see a slightly positive y-o-y growth”.
The Asia-Pacific region did not fare as well as the huge domestic China market, but was only 43% down in June versus 2019, with projections of just 12% down in August.
For business aviation, likewise, improvements took hold in Q2 of 2020, To help you see your own way forward, as always, we here at Asian Sky with China the busiest business aviation market with 280 domestic Group have strived to provide you with relevant commentary, special flights. The Asia-Pacific region as a whole saw business jet flight features & market updates. activity stop its decline and the curve flatten but flights of five hours or more saw the biggest increase as Europe and the United States Enclosed in the Q2 issue of Asian Sky Quarterly you’ll find commentary reopened. by Gordon Gardiner and James Jordan of HFW on the Recovery of Business Aviation, a market update on the global business jet fleet - These positive trends were reflected in our survey with optimism including OEM backlogs by Global Jet Capital, an update on pre-owned significantly bouncing back in the Q2: overall optimism was up 8%, transactions on a worldwide scale by AMSTAT, Q2 Asia-Pacific flight with China registering a whopping 20% improvement. activity courtesy of WINGX, a look at the flexibility and efficiency of the Bell 505, and analysis of the Bell 412 pre-owned market. Lastly, we But people’s intentions in the end are still tempered as recent events hear from AsBAA Chairman Wu Zhendong in our foreword, discussing have demonstrated the fragility of any recovery, with an outbreak in the importance of regulators and associations during such periods of Beijing in June and as we here in Hong Kong experience a “third wave”. uncertainty.
So, despite renewed optimism, the percentage of the “I’m not sure” respondents grew 10% in Q2 to 59% - almost 2/3rds. And with this growing uncertainty, the higher percentage of the fleet for sale, due to the drastic economic impacts of Covid-19, sits unsold longer, with Seller’s having few options but to eventually lower prices. Sincerely, Thus, this is the current state of affairs, but by no means where we Jeffrey C. Lowe will end up. Managing Director, Asian Sky Group
SPECIAL THANKS TO OUR CONTRIBUTORS:
2 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 FOREWORD
Dear all,
As Covid-19 continues to impact many industries including business aviation, our thoughts remain with the communities and individuals most affected by the pandemic, and with those working around the clock to alleviate the situation. AsBAA will continue to remain vigilant in monitoring and working with relevant government authorities in the region to help resolve our members' and the industry's challenges during this historic time.
The Covid-19 crisis underscores the importance of regulators and associations working together. Last month, the AsBAA Singapore Chapter reached out to the CAAS on the subject of support for the business aviation community as a result of the pandemic. 3 November 2020 at Saujana Hotel, Subang, just ahead of our 6th Subsequently, the association received a response from CAAS in which Icons of Aviation Awards gala on 5 November 2020, which coincides the Authority clarified details and provided a contact for technical with the association's 20-year anniversary. The Philippine Safety Day clarifications going forward. The AsBAA Malaysia Chapter has also is tentatively scheduled for 11 November 2020 with venue details to recently met with the new CEO of Civil Aviation Authority of Malaysia follow. More events are in the pipeline and we will be sharing details (CAAM) to discuss key operational and infrastructural issues affecting with all of you through our weekly email digests and social media business aviation in Malaysia. The CAAM has suggested regular channels. dialogue with AsBAA going forward in order to continue working towards resolving challenges. AsBAA continues to be in close dialogue As the situation evolves rapidly, we will continue to adapt. Business with other government authorities in representing our members' and aviation is fundamentally strong, and this disruption to our industry is the industry's interests. only temporary. Remember aircraft take off into the wind, and together we will overcome this turbulence. On behalf of the association, allow Within the association, we have continued to improve and streamline me to give our sincere thanks to our members and supporters for their our own capabilities and resources to better serve our members. In contributions. Stay safe and healthy. addition to bringing on board our COO Jeff Chiang earlier this year, we have also invited former business aviation magazine editor-in-chief Anthony Lam in-house to spearhead the association's marketing and external affairs going forward (replacing the external agency). We believe these strategic and economic decisions will aid in the long term vitality, strength, and effectiveness of the association. Best Wishes, Looking forward, there are a couple of upcoming events to highlight. Zhendong Wu The inaugural AsBAA Malaysia Safety Day is still set to take place on Chairman, AsBAA
ABOUT ASBAA: AsBAA’s mission is to represent the needs of its members and the wider industry through its three core pillars: Advocacy, Representation and Community. The association actively advocates the benefits of business aviation to key stakeholders such as government, transport ministries and the media. It represents the interests of all sectors of the business and general aviation industry across the region, and creates a community in which members can network, access B2B opportunities, and tackle common issues with greater collective influence.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 3 ECONOMICS ASIA PACIFIC REGION BUSINESS JET FLEET REPORT YEAR END 2019 GREATER CHINA NOW AVAILABLE MAINLAND CHINA, HONG KONG, MACAU & TAIWAN
Mainland China GDP GROWTH (BILLION USD) The Chinese economy shrank 6.8% y-o-y in the first quarter of Mainland China Taiwan Hong Kong Macau 2020, after a 6% growth in the last three months of 2019 and compared with market forecasts of a 6.5% decline. It is the first $13,608 $14,200 $12,835 GDP contraction since records began in 1992, reflecting the $11,016 $11,138 $12,134 impact of the COVID-19 outbreak after the authorities enforced a near two-month-long shutdown of all non-essential business $589 $605 $597 activity. $525 $531 $579
Hong Kong $309 $321 $342 $363 $362 $335 Hong Kong's economy shrank 8.9% y-o-y, the sharpest contraction $55 $50 $45 $45 $51 on record, after a 3% drop in the prior period amid disruptions $25 of economic activities due to the COVID-19 pandemic. Private consumption dropped 6.7% and exports of goods declined 9.2% 2015 2016 2017 2018 2019 2020Q1 (vs 2% in Q4) and those of services plunged 16.8% (vs -10.6% in Q4). PURCHASING MANAGER’S INDEX
Taiwan Mainland China Taiwan Hong Kong Expansion Taiwan’s economy grew 1.5% y-o-y in Q1 2020, slowing from the 54.0% 3.3% increase recorded in Q4 2019 and marking the slowest rate 52.0% of growth since Q2 2016. On a seasonally-adjusted quarter-on- 50.0% quarter basis, activity shrank 1.5% in Q1 2020, contrasting the 48.0% 1.9% expansion in Q4 2020. 46.0% 44.0% Contraction 42.0% 40.0% 38.0% 36.0% 34.0% 32.0%
30.0% Jun19 Jul19 Aug19 Sep19 Oct19 Dec19 Jan20 Feb20 Mar20 Apr20 May20 Jun20 Nov19
Source: Focus Economics & Trading Economics
FLEET SIZE GROWTH: FLEET SIZE GROWTH: FLEET SIZE GROWTH: BUSINESS JET TURBINE HELICOPTER TURBOPROP Mainland China Taiwan Mainland China Taiwan Mainland China Taiwan Hong Kong Macau Hong Kong Hong Kong
719 741 184 184 313 344 338 332 679 164 321 581 157 495 133
135 135 129 122 123
10
27 5 5 5 25 27 28 4 4 24 27 25 24 23 21 4 3 2 23 22 2 11 19 10 10 10 9 15 15
2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2
* Data Source: ASG's Annual Business Jet Fleet Report and Helicopter Fleet Report. Turboprop data provided by Amstat.
4 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 ECONOMICS
AUSTRALASIA AUSTRALIA, NEW ZEALAND & PAPUA NEW GUINEA
Australia GDP GROWTH (BILLION USD) A severe bushfire season coupled with a prolonged drought Australia New Zealand Papua New Guinea and lockdown measures to combat the coronavirus pandemic hit the economy hard in Q1. GDP fell 0.3% quarter-on-quarter $1,352 $1,432 $1,439 $1,446 in seasonally-adjusted, contrasting a 0.5% quarter-on-quarter $1,210 $1,331 increase in the fourth quarter of 2019. The result matched expectations and marked the sharpest contraction since Q4 2008. Meanwhile, on an annual basis, the economy grew 1.4%, down $188 $203 $205 $210 $205 from Q4’s 2.2%. $177
New Zealand New Zealand’s GDP contracted 0.2% y-o-y after a 1.8 percent $22 $22 $23 $24 $23 expansion. On a quarterly basis, the economy shrank 1.6% $21 following a 0.5% increase in the previous period, as travel 2015 2016 2017 2018 2019 2020Q1 restrictions and a national lockdown contributed heavily to the largest decline in 29 years. Services contributed significantly to the decline, as hospitality (accommodation, restaurants, and bars) PURCHASING MANAGER’S INDEX was among the most affected industries, falling 7.8% and tourism Australia New Zealand declining after the border was closed to slow the spread of the Expansion 60.0% coronavirus. 55.0%
50.0%
45.0%
40.0%
35.0% Contraction
30.0%
25.0%
20.0% Jun19 Jul19 Aug19 Sep19 Oct19 Dec19 Jan20 Feb20 Mar20 Apr20 May20 Jun20 Nov19
Source: Focus Economics & Trading Economics
FLEET SIZE GROWTH: FLEET SIZE GROWTH: FLEET SIZE GROWTH: BUSINESS JET TURBINE HELICOPTER TURBOPROP Australia New Zealand Australia New Zealand Australia New Zealand Papua New Guinea Papua New Guinea Papua New Guinea
853 855 860 410 428 433 432 432 199 196 808 832 181 186 185
539 557 511 462 478 19 19 19 16 15 58 54 56 49 51
28 29 4 4 4 116 103 107 104 91 23 23 3 3 22
2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2
* Data Source: ASG's Annual Business Jet Fleet Report and Helicopter Fleet Report. Turboprop data provided by Amstat.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 5 ECONOMICS
EAST ASIA & CENTRAL ASIA JAPAN, SOUTH KOREA & INDIA
Japan GDP GROWTH (BILLION USD) The Japanese economy contracted 2.2% y-o-y in Q1, less than Japan South Korea India the initial reading of a 3.4% contraction and compared with consensus of a 2.1% fall. On a quarterly basis, it shrank 0.6%. $4,927 $4,971 $4,981 This was the first recession since 2015, as the COVID-19 crisis $4,860 $4,881 $4,389 took a huge toll on activity and demand. Private consumption fell slightly more than anticipated (-0.8% vs -0.7% in the preliminary estimate), while there was a significant upward revision of capital $2,899 $2,899 $2,597 $2,769 expenditure (1.9% vs -0.5%). $2,274 $2,095 $1,531 $1,619 $1,640 $1,614 $1,378 $1,415 South Korea South Korea’s quarterly GDP declined 1.3%, falling after increasing 1.3% in the prior period. It was the sharpest drop since the last quarter of 2008, dragged by services (-2.4% vs 1.3% in Q4) and 2015 2016 2017 2018 2019 2020Q1 manufacturing (-1% vs 1.8%). Also, construction activity slowed sharply (0.2% vs 3.7%). On an annual basis, GDP expanded an upwardly revised 1.4%. PURCHASING MANAGER’S INDEX Japan South Korea India
India Expansion 60.0% The Indian economy expanded 3.1% y-o-y in the first quarter of 55.0% 2020, beating market forecasts of a 2.1% rise. Still, it is the slowest GDP growth since quarterly data became available in 2004, as the 50.0% country imposed a nationwide lockdown from March 24th aiming 45.0% to contain the spread of the coronavirus. 40.0%
35.0% Contraction
30.0%
25.0%
20.0% Jun19 Jul19 Aug19 Sep19 Oct19 Dec19 Jan20 Feb20 Mar20 Apr20 May20 Jun20 Nov19
Source: Focus Economics & Trading Economics
FLEET SIZE GROWTH: FLEET SIZE GROWTH: FLEET SIZE GROWTH: BUSINESS JET TURBINE HELICOPTER TURBOPROP Japan South Korea India Japan South Korea India Japan South Korea India
646 647 646 664 676 155 155 134 138 140 140 138 139
97 94 92 78 77
73 75
55 63 63 54 54
286 291 287 285 293 21 21 19 21 19 19 16 16 17 17
229 233 226 222 227
2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2
* Data Source: ASG's Annual Business Jet Fleet Report and Helicopter Fleet Report. Turboprop data provided by Amstat.
6 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 ECONOMICS
SOUTHEAST ASIA THAILAND, MALAYSIA, SINGAPORE
Thailand GDP GROWTH (BILLION USD) Thailand's gross domestic product shrank by 1.8% year-on-year Singapore Thailand Malaysia in the first quarter of 2020, following a downwardly revised 1.5% expansion in the previous period and better than market consensus of a 4 percent contraction. This was the worst economic downturn $474 $475 $471 since the fourth quarter 2011, as both supply and demand took a hit $455 from the pandemic crisis. On the production side, output contracted $412 mostly for agriculture (-5.7%), manufacturing (-2.7%), construction $395 $364 (-9.9%), transportation and storage (-6%), accommodation and food $366 $360 $338 service activities (-24.1%), administrative and support services $356 $358 $318 $354 activities (-6.7%). $308 $314 $296 $297 Malaysia GDP growth decelerated to 0.7% on an annual basis in the first 2015 2016 2017 2018 2019 2020Q1 quarter, down from the fourth quarter’s 3.6% y-o-y expansion and marking the slowest growth rate since Q3 2009. On a seasonally- adjusted quarter-on-quarter basis, economic activity dropped 2.0% in PURCHASING MANAGER’S INDEX Q1, contrasting Q4's 0.6% growth. The Covid-19 crisis is expected to Singapore Thailand Malaysia push the economy into recession this year. Containment measures, Expansion 60.0% rising unemployment and deteriorated sentiment will hamper 55.0% domestic demand, while exports look set to shrink on muted global demand, fragile commodity prices, and diminished tourism. Political 50.0% risks also cloud the outlook. 45.0%
40.0% Singapore Contraction 35.0% The economy contracted sharply in Q1 to 2.2% year-on-year (Q4: +1.0% y-o-y) and fell 10.6% on a quarter-on-quarter seasonally- 30.0% adjusted annualized (SAAR) basis (Q4: +0.6% SAAR). The result 25.0% reflects the economic impact of the global Covid-19 pandemic. The
20.0% Jun19 Jul19 Aug19 Sep19 Oct19 Dec19 Jan20 Feb20 Mar20 Apr20 May20 Jun20 Nov19 economy is expected to contract this year, although the outlook remains uncertain due to questions surrounding the longevity and severity of the coronavirus pandemic.. Source: Focus Economics & Trading Economics
FLEET SIZE GROWTH: FLEET SIZE GROWTH: FLEET SIZE GROWTH: BUSINESS JET TURBINE HELICOPTER TURBOPROP Singapore Thailand Malaysia Singapore Thailand Malaysia Singapore Thailand Malaysia
64 63 62 60
57 56 59 59 161 44 154 157 153 155 40 42 54 28 25 24 118 121 33 34 106 111 111 19 18 48 9 8 8 6 40 5 38 38 37 4 6 6 6 6 35
2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2
* Data Source: ASG's Annual Business Jet Fleet Report and Helicopter Fleet Report. Turboprop data provided by Amstat.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 7 ECONOMICS
SOUTHEAST ASIA INDONESIA & PHILIPPINES
Philippines GDP GROWTH (BILLION USD) The economy dipped in Q1 as disruptions from the Taal Volcano Indonesia Philippines eruption in January, the COVID-19 pandemic and subsequent lockdown put in place in March combined to hammer activity. $1,087 $1,042 $1,016 $1,024 GDP contracted 0.2% y-o-y in Q1 2020, after expanding 6.7% in Q4 $932 2019. This marked the first annual economic contraction since $862 Q4 1998 and also surprised market analysts who had expected growth of 3.1%. In seasonally-adjusted quarter-on-quarter terms, the economy shrank 5.1% in Q1, contrasting the revised 1.8% expansion in Q4 (previously reported: +2.2% quarter-on-quarter). While Q1’s result marked an over two-decade low, prospects for $331 $338 Q2 are even more dismal. $292 $305 $314 $327
Indonesia 2015 2016 2017 2018 2019 2020Q1 Activity lost momentum in the first quarter, with GDP expanding 3.0% (Q4: +5.0% year-on-year), below market expectations of 4.0% and marking the weakest quarterly reading in nearly two PURCHASING MANAGER’S INDEX decades. Domestic demand softened sharply in Q1 due to social Indonesia Philippines Expansion distancing measures introduced in March and rising uncertainty 60.0% as coronavirus cases accelerated. Household spending increased 55.0% 2.8% in the first quarter, which was below the fourth quarter's 5.0% expansion. Fixed investment growth moderated to 1.7% in 50.0% Q1, compared to the 4.1% expansion in the prior quarter. However, 45.0% public spending growth picked up to 3.7% in Q1 (Q4: +0.5% yoy), 40.0% likely amid government efforts to support the economy. Contraction 35.0%
30.0%
25.0%
20.0% Jun19 Jul19 Aug19 Sep19 Oct19 Dec19 Jan20 Feb20 Mar20 Apr20 May20 Jun20 Nov19
Source: Focus Economics & Trading Economics
FLEET SIZE GROWTH: FLEET SIZE GROWTH: FLEET SIZE GROWTH: BUSINESS JET TURBINE HELICOPTER TURBOPROP Indonesia Philippines Indonesia Philippines Indonesia Philippines
51 50 51
226 119 121 51 221 117 116
48 48 208 104 49 203 207
47 48
46 168 62 64 59 162 163 162 57 156 52
2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2 2016 2017 2018 2019 2020Q2
* Data Source: ASG's Annual Business Jet Fleet Report and Helicopter Fleet Report. Turboprop data provided by Amstat.
8 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 FLIGHT ELEVATED
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SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 9 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2020Q2
RESPONDENT LOCATION Results Summary in 2020 Q2: Central Asia & Rest of the World (7%) Middle East (44%) 1. Pessimistic mood in APAC stabilized slightly in Q2, with optimism levels slowing increasing mainly contributed by Oceania (7%) Greater China and Central Asia. 2. Covid-19 has continued to affect business confidence in Q2 with more respondents believing their business has been seriously affected. The industry is adjusting business Greater + China (18%) 550 targets, as well as re-evaluating market demand. RESPONDENTS 3. Cabin sanitation is now the second most critical factor to business aviation / general aviation, aside from value for price paid. SE & NE Asia (24%) 4. Historically high 49% respondents reported decreasing fleet utilization. 44+24+187+G 5. Historically high level of respondents “not sure” of TOP 10 RESPONDENT’S LOCATIONS Indonesia (5%) India (15%) purchasing an aircraft. Pakistan (5%) Philippines (5%) In 2020 Q2, over 550 respondents participated in ASG’s survey regarding the Australia (5%) Qatar (14%) mood and intentions of the current business aviation market.
Singapore (8%) Regions with the most respondents include:
1. Greater China (18%) 2. Southeast and Northeast Asia (24%) 3. Central Asia & Malaysia (9%) China (13%) Middle East (44%, incl. India, Pakistan, UAE etc.) 4. Oceania (7%)
The majority of the respondent’s aircraft type are business jets (63%). Hong Kong (10%) United Arab Emirates (11%) 67% of the respondents from this quarter’s survey are from aircraft services providers (FBO, MRO, etc.) and aircraft operators, as well as from aircraft brokers 15+14+131110985+5+G (12%), aircraft end users (4%) and respondents from other related areas. RESPONDENT AIRCRAFT TYPE Turboprop (18%) Business Jet (63%) Covid-19 Pandemic in Asia Pacific
The ongoing Covid-19 pandemic has continued to impact business aviation companies business confidence and perspective of the market. In Q2, more companies have reported being impacted, particularly on the flight operation Civil Helicopter (19%) side of the industry. Over 70% of the respondents from the operator / end user segment reported that Covid-19 has seriously affected their business.
A few more respondents believe that market demand will not bounce back by the end of the year. This comes with many companies adjusting their market goals and evaluations to meet the ongoing challenges of the pandemic. On a positive note, many are still optimistic about meeting their business targets for 2020. RESPONDENT63 CATEGORY +19+18+G In this quarter’s survey we added a new question asking respondents to rank the factors they think would be critical to the future of business aviation / general Owner / Aircraft Service Charter User (4%) Providers* (35%) aviation. ‘Value for price paid’ was ranked the first, while cabin sanitation ranked second - surpassing many factors typically believed to be most important.
Broker (12%) Privacy ranked last.
Aircraft Utilization
Aircraft utilization was mainly contributed to by respondents in Greater China as well as respondents from Oceania. Fleet utilization in the area was largely Others** (18%) affected by Covid-19; 49% of the respondents reported their fleet utilization has been decreasing. This is the highest decreasing level since the survey began.
Aircraft Operator Purchase Intention /Management Company (31%) Purchase intention has been affected as well. More respondents now are not 35+31+18124+G sure whether to purchase an aircraft. This comes as many brokers are hesitant to define the market situation as well. We saw a drop in respondents believing * Aircraft Service Providers include: financial services, training, FBO, ground this is a ‘Buyer’s Market’ shifting to “I’m not sure”. handlers, Service, MRO, parts, etc. ** Others include law firms, research facilities and government official
10 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2020Q2 ECONOMICS STATUS WHAT IS OUR CURRENT ECONOMIC STATUS? (QUARTERLY COMPARISON)
100% Past Low Point 90% 32% 20% 45% 41% 38% 35% 19% 52% 29% 32% 80% 52% 55% 56% 70% At Low Point Optimistic
60% (Will get better) 29% 35% 29% 35% 28% 31% 32% 50% 27% 40% Not Reached 34% 37% 28% 30% 32% 34% Low Point 20% 33% 37% 45% 32% 36% 40% 33% 53%
10% Pessimistic
21% 16% (Will get worse) 15% 10% 11% 0% 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
OPTIMISM LEVELS SINCE 2017Q2 - REGIONAL DIFFERENCES Greater China SE & NE Asia Central Asia & Middle East Oceania Overall 100% 100%
95% 94% 95% 91% 92% 92% 91% 92% 88% 89% 90% 89% 86% 90% 89% 88% 84% 84% 87% 86% 86% 85% 82% 81% 82% 80% 83% 79% 78% 80% 79% 75% 75% 76% 73% 74% 70% 73% 70% 72% 67% 67% 67% 67% 68% 68% 64% 65% 63% 61% 60% 60% 58% 55% 56% 54% 50% 50% 48%
47% 43% 40% 40% 41% 36%
32% 30% 30%
20% 20%
10% 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 11 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2020Q2 COVID-19 IMPACT ON ASIA PACIFIC
Has the COVID-19 coronavirus outbreak affected you Aircraft Operator / Management Company 2020Q1 2020Q2 Hard to tell at the moment 4% 2% or your organization’s business so far? No, it has not affected my business 7% 0% 2020Q1 2020Q2 Yes, it has seriously affected my business 65% 75% Yes, it has somewhat affected my business 24% 22% 68% 63% Aircraft Owner / Charter User 2020Q1 2020Q2 Hard to tell at the moment 12% 0% No, it has not affected my business 12% 0% Yes, it has seriously affected my business 54% 76% Yes, it has somewhat affected my business 23% 24% 27% 28% Aircraft Sales / Charter Broker 2020Q1 2020Q2 Hard to tell at the moment 6% 1% 6% 4% 3% 1% No, it has not affected my business 1% 4%
- Yes, it has seriously affected my business 62% 67% Yes, it has somewhat affected my business 30% 27%
Other Related (FBO, MRO, etc.) 2020Q1 2020Q2 Hard to tell at the moment 5% 2% business business business affected my my affected the Moment Hard to tell at tell to Hard No, it has not not it has No, No, it has not affected my business 3% 1% - seri It has Yes, Yes, It has some It has Yes, what affected my my affected what ously affected my my affected ously Yes, it has seriously affected my business 62% 67% Yes, it has somewhat affected my business 30% 30%
Do you foresee market demand bouncing back in the Aircraft Operator / Management Company 2020Q1 2020Q2 2nd half-year of 2020? Hard to tell at the moment 35% 37% 2020Q1 2020Q2 No 23% 26% Yes 41% 37% 40% 36% 38% Aircraft Owner / Charter User 2020Q1 2020Q2 35% Hard to tell at the moment 42% 14% 27% No 38% 43% 24% Yes 19% 43%
Aircraft Sales / Charter Broker 2020Q1 2020Q2 Hard to tell at the moment 39% 33% No 19% 25% Yes 42% 42%
Other Related (FBO, MRO, etc.) 2020Q1 2020Q2 Hard to tell at the moment 33% 37% No Yes No 25% 26% Yes 42% 37% the Moment Hard to tell at tell to Hard
Are you or your organization still optimistic to meet the Aircraft Operator / Management Company 2020Q1 2020Q2 Hard to tell at the moment 33% 39% business performance targets you set for 2020? No 36% 37% 2020Q1 2020Q2 Yes 30% 24% 42% Aircraft Owner / Charter User 2020Q1 2020Q2 36% 33% 34% Hard to tell at the moment 27% 38% 30% No 62% 38% 25% Yes 12% 24%
Aircraft Sales / Charter Broker 2020Q1 2020Q2 Hard to tell at the moment 20% 21% No 57% 51% Yes 23% 28%
Other Related (FBO, MRO, etc.) 2020Q1 2020Q2 Hard to tell at the moment 41% 36% No Yes No 34% 27% Yes 25% 37% the Moment Hard to tell at tell to Hard
Rank the following factors that you think are critical to the future of business aviation / general aviation: Value for Price Paid More Important Factors Overall Rank Score (the lower the better)
Privacy Value for Price Paid 1 2.6 Cabin Sanitation Cabin Sanitation 2 2.7 Customer Service 3 2.8 Flexibility / Punctuality 4 3.0 Maintenance Support 5 3.8 Maintenance Support Customer Service Privacy 6 4.1
Flexibility / Punctuality
12 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2020Q2 FLEET UTILIZATION
SUMMARY: AIRCRAFT UTILIZATION CHANGES COMPARED TO 12 MONTHS AGO
100% Up by 20% and more (>20%) 90% 17%
80% INCREASED 14% 70% SAME Up but less than 20% (0 - 20%) 4% 60% 16% 50% The same (0%) 40%
30% DECREASED Down but less than 20% (-20 - 0%) 20% 49%
10% Down by 20% or more (<-20%) 0% 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Decreased The Same GREATER CHINA OCEANIA Increased Signal Line*
OPTIMISTIC
OPTIMISTIC
PESSIMISTIC PESSIMISTIC 77% 77% 71% 57% 62% 56% 58% 50% 55% 48% 47% 47% 45% 42% 46% 43% 43% 35% 41% 32% 30% 30% 31% 36% 29% 33% 33% 33% 26% 26% 25% 25% 25% 25% 24% 22% 26% 19% 25% 24% 18% 23% 22% 21% 21% 21% 13% 18% 17% 16% 15% 4% 8% 7%
2018 2018 2018 2019 2019 2019 2019 2020 2020 2018 2018 2018 2019 2019 2019 2019 2020 2020 471835 261956 302545 263242 244829 252550 134771 30224 573125 213346 232255 432433 413326 4362 2118 3621 581725 77158 77 7 16 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
SOUTHEAST & NORTHEAST ASIA CENTRAL ASIA & MIDDLE EAST
OPTIMISTIC OPTIMISTIC PESSIMISTIC PESSIMISTIC 81% 79% 72% 70% 70% 68% 67% 67% 65% 64% 61% 60% 60% 56% 51% 50% 48% 44% 40% 40% 39% 36% 34% 28% 25% 23% 22% 22% 22% 21% 20% 18% 19% 17% 17% 16% 15% 15% 15% 14% 14% 13% 12% 11% 11% 11% 10% 10% 5% 5% 5% 4% 4% 1% 1020182070 2018 1422642018 2520191856 2019 1723602019 1520191768 2020 3422442020 284860 21121 514039 520181481 222018 1167 20184 201919665 2019 1516792019 112019570 202011 15652020 416113 104 725036 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
* An Optimistic-Pessimistic Signal Line has been added to regional aircraft usage trend analyses for Greater China, Oceania and South and East Asia regions. An optimistic mood is derived from more people indicating ‘higher’ aircraft utilization compared with 12 months ago, while a pessimistic mood is derived from more people indicating ‘lower’ aircraft utilization compared with 12 months ago.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 13 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2020Q2 PURCHASE INTENTION DO YOU OR YOUR CLIENT OWN OR WHEN CHARTERING AN AIRCRAFT, CHARTER A PRIVATE AIRCRAFT? WHAT IS YOUR PRIMARY SOURCE? Contact Broker (8%) Just Charter (15%) Both Own and Charter (65%) Contact Operator (92%) Just Own (20%) 65+20+15+G 8+92+G WHERE ARE WE IN THE CURRENT PRE-OWNED MARKET? PURCHASE INTENTION 2018Q2 - 2020Q2*
Buyer’s Market Balanced Market Seller’s Market I’m not sure Yes, a new aircraft Yes, a pre-owned aircraft No / I’m not sure 66% 59%
58% 55% 53%
54% 47% 46% 43% 49% 41% 50% 43% 48% 38% 41% 40% 38% 38% 38% 28% 28% 32% 21% 22% 31% 26% 30% 17% 16% 17% 28% 27% 28% 14% 20% 15% 13% 31% 27% 26% 13% 30% 29% 10% 8% 15% 12% 22% 11% 25% 24% 8% 9% 8% 5% 5% 6% 20% 19%
2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2
PURCHASE INTENTION - REGIONAL DIFFERENCES (FIXED WING)
Corporate Airliner Large Jet Medium Jet Small Jet Turboprop / Piston Fixed Wing SE & NE Asia 20% 26% 23% 17% 14%
Oceania 25% 25% 50%
Greater China 11 % 43% 29% 7% 11 %
Central Asia 34% 30% 22% 8% 5% & Middle East
PURCHASE INTENTION PURCHASE INTENTION PURCHASE DECISIONS - FIXED WING - HELICOPTER - INFLUENCING FACTORS (OUTER IS PREFERRED) (OUTER IS PREFERRED) (OUTER IS LIMITING)
Corporate Airliner Twin Turbine Government / Public Opinion (Such as ACJ, BBJ) (Such as Sikorsky S-76C++)
Most Preferred
Most Preferred Inconvenient No Interesting to Use Turboprop/Piston Large Jet Aircraft Fixed Wing (Such as G650, (Such as King Air Series) Falcon 8X)
Piston Helicopter Single Turbine Helicopter No Need Price Small Jet Midsize Jet (Such as Robinson R22) (Such as Bell 206) Greater China Oceania (Such as Citation Series, (Such as G200 & Central Asia SE & NE Asia Hawker Series) CL650)
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GJCP 24440 - ASG Full Page- June.indd 1 5/7/20 12:54 PM THE FLIGHT PATH TO COVID-19 RECOVERY MINIMISING THE LEGAL TURBULENCE In this article, business aviation lawyers, HFW Hong Kong Partner Gordon Gardiner and Singapore Senior Associate James Jordan, provide an overview of some of the critical legal issues created by the pandemic and list ten key questions that industry stakeholders should be asking as the sector looks to rebuild its international operations in a post-COVID-19 (C-19) world.
he impact of COVID-19 (C-19) on the business aviation sector TRANSMISSION RISKS AND CLAIMS is truly unprecedented. Even during previous international Tcrises - such as 9/11 or the Global Financial Crisis - business The biggest threat to the industry is that aviation continues to act not aviation operations were relatively unaffected and in some instances only as a transmission vector (i.e. transporting C-19 from an area of saw an increase in operations compared to the airline sector. C-19 has, high infection rates to less affected areas) but also as a transmission however, led to a steep decline in business aviation movements due to cluster in and of itself (i.e. passengers/crew infect other passengers on strict border restrictions, which in many cases has made international board the aircraft). flights impossible. Operators and aircraft management companies should be alive to the Domestic business aviation traffic is, however, starting to recover in risk of liability claims from passengers who contract C-19 on board many places. The sector is now turning its mind to safely resuming their aircraft or inside business aviation centres during the process international operations as we enter into a new phase of the pandemic. of embarkation or disembarkation. While proving that an operator or Outlined below are the key legal concerns for the business aviation manager is liable may be difficult, it is not impossible if the correct community and the questions that the sector needs to address as the evidence can be adduced by the passenger. Given the smaller number recovery process gathers pace. of passengers and crew on business aircraft, it may be easier for passengers to demonstrate transmission links which will be clearer and easier to define. The impact of C-19 over recent months:
Operators and aircraft managers are also at risk of claims from crew • Just over 26,000 business jet flights operated worldwide and other employees if steps are not taken by employers to ensure that in the first two weeks of April 2020, 79% below the same they are adequately protected. These risks can, however, be significantly period in 2019. mitigated if appropriate steps are taken in accordance with international regulations and guidance issued by entities such as the NBAA2 . • Just under 1,000 business jets were active worldwide in the first half of April, compared to over 4,000 in the corresponding 2019 period. 1 https://wingx-advance.com/covid-impact-live-updates/ • Business aviation activity in Asia was down 28% in June 2 https://nbaa.org/wp-content/uploads/aircraft-operations/safety/ compared to 2019, although flight hours are down by 44%1. coronavirus/nbaa-aircraft-disinfection-and-cleaning-procedures.pdf
16 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 COMMENTARY: RECOVERY OF BUSINESS AVIATION BY HFW
ASSET PRESERVATION Operational staff will need to understand the relevant data protection and privacy laws so as to avoid sanctions for their respective The general sentiment is that global demand exists for business aviation organisations. but that it is being hindered by a complex patchwork of government border and immigration controls. It is, therefore, hoped that the sector will recover quickly as soon as restrictions are relaxed, unlike the airline COMMERCIAL CONTRACTS industry where the recovery is likely to be considerably slower due to Inevitably there will be greater scrutiny on the allocation of risk between waning consumer demand and broader economic malaise. parties in commercial contracts. In particular, given the impact of That being said, a large number of business jets will remain grounded C-19 on businesses across the whole spectrum of business aviation, for an extended period. A significant concern for stakeholders involved it is likely that counterparties will seek greater financial protection in the financing and insuring of the industry is that aircraft are not being in case of default on payment obligations. Credit and payment maintained in a manner that will enable them to remain serviceable and terms will therefore be a particular focus of attention, as well as the to retain their value. circumstances in which liens can be exercised over aircraft and other property. The scope of ‘force majeure’ clauses and the contractual Operators and entities involved in aircraft maintenance should ensure consequences will also be subject to close examination. asset preservation and maintenance plans are clear, robust and accessible in the event that they are requested by a party with an Operators may also wish to consider drafting specific wording into their interest in the aircraft. Failure to properly maintain aircraft during a terms of business to deal with the issues that have been created by the period of extended grounding may vitiate insurance terms and/or lead pandemic. This should not only deal with transmission risks but also to claims from owners and finance parties. issues created by travel disruptions and border control restrictions.
PERSONAL DATA SUSTAINABILITY
Health screening for C-19 and/or antibody certification is likely to In the 2019 Q4 version of Asian Sky Quarterly, we discussed the become commonplace within the broader aviation industry and may importance of sustainability for the business aviation sector and why even be mandated in order for passengers and crew to enter certain failing to address green issues represents one of the most significant countries. threats to the sector. This was before the emergence of C-19.
This will entail business aviation operators having to manage Notwithstanding the systemic threat created by C-19, the world and increasingly more complex and sensitive personal data relating to its economies will recover and, while the nature of that recovery is passenger and employee health. Fines for data breaches are significant still uncertain, sustainability should still be a core pillar of all business (e.g. under the European Union General Data Protection Regulation – plans. Shifting consumer sentiment towards a desire for sustainable which has extraterritorial effect - fines can be up to €20 million, or up business aviation has not disappeared and cannot be ignored. There to 4% of the relevant company’s annual worldwide turnover for the is, however, now an opportunity to develop a new model for the future preceding financial year, whichever is greater) and existing systems of business aviation which puts the sustainability of the industry at will need to be enhanced to manage these exposures. its core.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 17 COMMENTARY: RECOVERY OF BUSINESS AVIATION BY HFW
QUESTIONS TO ASK 7. Do your commercial contracts with suppliers, vendors and business partners adequately manage the unique risks of C-19 All companies within the business aviation sector should consider (e.g. if your contracts contain force majeure provisions, do you whether the following questions have been addressed within their understand the triggers and consequences)? organisations: 8. Credit risk remains high throughout the entire business aviation 1. Are all relevant employees and crew fully briefed on the sector. Have payment terms with customers and suppliers been applicable local and international regulations relating to reducing reviewed so as to highlight areas of financial risk for the business? transmission risks? 9. Are Business Continuity Plans (BCP) in place to deal with further 2. What steps have been taken to keep an accurate record of future waves of C-19 or a return to lockdown? These should be employee and crew training relating to C-19? Is your business concise, easily understood, and up to date. They should also be able to easily present such information if requested by the regularly reviewed and tested, to enable your company to remain regulator or in the event that you face a legal claim? operational through future waves of C-19, or to mitigate against 3. Is the business prepared to handle C-19 claims by passengers? Is reduced demand. it clear what steps will be taken if/when an incident occurs so that 10. Is your company committed to sustainability as the business ongoing legal and litigation risks can be effectively managed and aviation sector enters the recovery phase? If so, what steps have immediate steps can be taken to mitigate reputational damage? been taken to document and publicise the action you have taken 4. For aircraft that remain grounded, what discussions have been to ensure that sustainability remains a key constituent of your held with insurers, lessors and other finance parties to ensure that post-C-19 business plan? all stakeholders are in agreement as to the long term preservation of the asset? PLANNING FOR THE RECOVERY
5. Have you reviewed your data protection protocols to ensure that C-19 has created numerous and complex legal questions for the they adequately address the additional health data you may be business aviation sector. Those companies that pre-emptively address holding, either now or in the future, as a result of C-19? the issues raised above before they develop into real legal problems will be well placed to overcome the challenges presented by C-19, as 6. What do your terms of business state about transmission risks borders gradually reopen and government restrictions are relaxed. relating to C-19 and have amendments been made to deal with issues that are specific to the pandemic?
HFW has more than 600 lawyers working across Asia Pacific, ABOUT THE AUTHORS the Americas, Europe and the Middle East. HFW is committed to Asia Pacific, with seven offices and three associations across HFW HONG KONG PARTNER GORDON GARDINER the region. AND SINGAPORE SENIOR ASSOCIATE JAMES JORDAN HFW has been at the forefront of legal developments in the ARE TRUSTED LEGAL ADVISERS TO THE BUSINESS aerospace sector for more than four decades. With more than 80 specialist aviation lawyers in ten international hubs, HFW AVIATION COMMUNITY. THEY REGULARLY ADVISE ON provides at the point of delivery the resources of a global team. A DIVERSE RANGE OF BUSINESS AVIATION MATTERS HFW prides itself in knowing clients’ business needs and delivers AND ARE PART OF A GLOBAL TEAM THAT PROVIDES solutions 24 hours a day. CLIENTS WITH SOLUTIONS ACROSS THE BROAD SPECTRUM OF FINANCING & LEASING, COMMERCIAL Recent examples of HFW’s business aviation work include advising on: CONTRACTS, REGULATORY ISSUES, AND DISPUTES.
• Sale and purchase agreements for both new and used business jets
• Acquisition and financing or refinancing by lease or loan of numerous business jets GORDON GARDINER Partner, Hong Kong • Terms and conditions of use for an Asian FBO D: +852 3983 7710 E: [email protected] • Commercial contracts relating to the services provided by an Asian MRO facility
• Various commercial disputes in relation to aircraft acquisition and aircraft management
• Insured claims arising out of business jet and general aviation incidents and major accidents JAMES JORDAN Senior Associate, Singapore D: +65 6411 5374 hfw.com E: [email protected]
18 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 RCA21_ASQ_210x297_Final_13Dec19.pdf 1 31/1/2020 11:12:27 AM
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SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 19 AIRCRAFT SPOTLIGHT: BELL 505
The 505 is a five-seater, flat-floor cabin, light single turbine engine helicopter. Loaded with the latest technology from Garmin G1000H NXi avionics to a Safran dual channel FADEC (Full Authority Digital Engine Control), the 505 is Bell’s entry level offering seeking to recapture a market once owned by the Bell 206 Jet Ranger. The powerful 505 SHP engine, 2,295 lb external load capability, and open, high visibility cabin, have opened the 505 up to compete with traditionally larger aircraft markets such as public safety, HEMS, and long lining.
The 505 was unveiled in 2013, at the Paris Air Show, and formally Embedded sensors around the aircraft provide critical information introduced in 2014 at the HAI Expo in Anaheim, California. The Bell to the cockpit helping the pilot more quickly identify, solve, and 505 Jet Ranger X was designed to fill a gap in product offering left react to any potential problems. The dual channel FADEC utilizes by the Bell 206B Jet Ranger when it was discontinued in 2010. The a redundant channel control system to maintain the turbine engine 505 continues the Jet Ranger legacy, utilizing the rotor and drive at peak performance. This FADEC allows the 505 to eliminate any system from the venerable 206 Long Ranger, with a modernized mechanical throttle linkage and provide single switch automated cockpit, improved engine power, and versatile open cabin. starting that eliminates the chance for a pilot induced hot start. Digital engine control provides smooth and consistent rotor There are over 260 505s operating in 46 countries. The 505 fleet speed as well as better fuel economy by setting fuel flow to the has flown over 45,000 hours in less than three years. The 505 is optimized limit based on the required power setting. The engine put to work every day in a wide variety of mission from private control system also includes a 3rd backup channel that, in the individuals flying for fun, long lining operators taking supplies and unlikely event of a FADEC failure, would keep fuel flowing to the crew high into the mountains, militaries training their future pilots, engine to allow the pilot to bring the aircraft to the ground safely. or police agencies keeping their cities safe.
The 505 is the most advanced short light single helicopter on the market today. The Garmin G1000H NXi avionics and dual channel FADEC provide enhanced situational awareness and reduced pilot workload to help pilots and operators ensure every mission is a success. The Garmin G1000H NXi provides flight and engine parameters in an easy to read, color coded, display that combines with aural headset alerts to ensure the pilot has a complete picture of the aircraft’s current status. This primary flight display includes the Bell unique Power Situation Indicator (PSI) and dual tachometer that combines five traditional engine and rotor displays into two easy to read gauges that provide color coded engine parameters.
20 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 AIRCRAFT SPOTLIGHT: BELL 505
The 505’s open cabin, easily removeable seats, and integrated tie downs provides the ultimate in versatility for operators around the world. The 505 is quickly able to convert from moving passengers or crew to cargo and goods with tool free removal of seats. The 505’s cabin boasts best in class 99 cubic feet of usable volume and a 18 cubic foot cargo bay providing ample space for passenger baggage or important cargo. The Bell 505 includes a 2000 lb cargo hook capability providing additional uses for operators to serve the community or add revenue streams to their business.
While new to the market, the 505’s rotor and drive system have millions of combined flight hours. The 505 utilizes the same high inertia rotor system from the 206 Long Ranger. A high inertia rotor Tim Otteson, former U.S. army pilot and current Bell demo pilot system provides the pilot more time to react to an engine failure details his trust in the 505:“The Bell 505 Jet Ranger X does a and enter an auto rotation without the rotor slowing down too magnificent job of blending proven technologies like the 206L4 much, providing a better cushion and a safer landing. The millions drive train with a state-of-the-art Dual Channel FADEC and glass of flight hours on these systems provide operators the assurance cockpit. I have had the privilege of flying the 505 in locations as of reliability knowing that they can not only trust the operating diverse as the Himalayas and the Dead Sea. The avionics suite has cost numbers, but they can also rely on the aircraft to be ready to kept me from getting lost in places I’ve never been and gives me go each and every day for their needs. power I can feel confident in. I was able to land at and depart from the Annapurna Basecamp, Nepal with 5 people on board at a density altitude of approximately 15,500 or so feet. My time flying the 505 The 505’s open cabin, in Nepal did nothing but increase my confidence in the aircraft and its ability to operate in the world’s mountainous environments.” easily removeable seats,
The Garmin G1000H NXi utilizes a second screen, called the and integrated tie downs Multi-Function Display or MFD, to display a series of maps, charts, provides the ultimate in weight & balance diagrams, and other supporting information key to providing enhanced situational awareness and reducing the versatility for operators pilot’s overall workload. The MFD also allows pilots to process around the world. live data such as weather, traffic, and terrain to ensure the complete situational picture is presented allowing pilots to make The Bell 505 utilizes the 505 SHP Safran Arrius 2R. This is the the best possible decisions while flying. With optional Synthetic first Safran engine product to be used by Bell. The Arrius 2R Vision, terrain and traffic are presented on the Primary Flight is the newest offering in the Arrius family of engines that has Display similar to how it would appear outside of the windscreen. accumulated millions of successful flight hours through multiple Terrain is color coded based on the aircraft’s proximity and OEMs products all over the world. The Arrius 2R provides a variety paired with aural alerts to help key pilots to look for impending of features that add to the reliability and safety of the 505 from the problems. Utilizing the optional Flight Stream 510, pilots can also dual channel FADEC to the Flame Out Protection System (FOPS). automatically upload flight plans and database updates from a The FOPS provides a preference flame tube that has its own fuel compatible portable device. The Flight Stream 510 also allows line and bypass valve. In the event of a fuel blockage, the preference for a portable device to be used as a third screen for further flame tube would re-light the engine maintaining thrust and safety situational awareness. of flight. The Arrius 2R provides best in class power to the 505 giving the aircraft the ability to hover at over 10,000 feet out of ground effect and have a service ceiling of up to 22,500 ft density altitude. The Arrius 2R is comprised of 2 modular sections to ease overhauls and replacements, a hot section and a gear box section.
The Bell 505 provides hydraulically powered cyclic and collective controls to maintain low control forces. A panel mounted switch allows pilots to cycle hydraulic power on and off to provide additional training opportunities for new pilots to practice flying through hydraulic failures.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 21 AIRCRAFT SPOTLIGHT: BELL 505
The Bell 505 utilizes the Maintenance Steering Group 3 (MSG- TECHNICAL SPECIFICATIONS 3) methodology commonly found in commercial airlines SPEEDS AT MGW, ISA maintainer groups. MSG-3 utilizes industry experts to create an MAX CRUISE 125 KTS 231KM/H analytically backed program to ensure logical inspection and overhaul scheduling that allows for maximum aircraft availability. RANGE AT VLRC1 306 NM 566 KM Maintenance operations are also grouped by their location on the MAX ENDURANCE1 (NO RESERVES, 60 KIAS) >3.9+ HRS airframe to ensure maintainers are accomplishing as many tasks CAPACITIES as logical when entering certain access panels or maintenance
CABIN FLOOR AREA2 22 FT2 2.0 M2 locations. MSG-3 aids in increasing aircraft availability and lowers operating costs, bringing a more modern and analytical BAGGAGE COMPARTMENT VOLUME 18 FT2 0.5 M2 maintenance program to the operator. CEILING ALTITUDES AT MGW, ISA
SERVICE CEILING 18,610 FT PA 5,672 M PA Being the most recently certified Short Light Single helicopter on the market, the 505 meets the latest safety standards. The Bell HOVER CEILING IGE 14,450 FT 4,404 M 505 features standard crash attenuating seats, a crash resistant
HOVER CEILING OGE 10,460 FT 3,188 M fuel system, and 4-point seat belts for all occupants. Technology like the Garmin G1000H NXi integrated avionics suite and dual WEIGHTS channel FADEC create the additional situation awareness and EMPTY WEIGHT (BASE AIRCRAFT) 2,180 LBS 989 KG reduced pilot workload that benefit pilots of all experience levels.
MAX GROSS WEIGHT (INTERNAL) 3,680 LBS 1,669 KG Many 505 operators will attest that the 505s many redundant MAX GROSS WEIGHT (EXTERNAL) 4,475 LBS 2,030 KG systems create a level of security that allow their pilots to learn
USEFUL LOAD (BASE AIRCRAFT, INTERNAL) 1,500 LBS 680 KG and confidently fly the 505 faster than other aircraft, allowing them to integrate the aircraft into their operations more quickly. POWERPLANT SPECIFICATIONS
TURBOMECA ARRIUS 2R (UNINSTALLED THERMODYNAMIC RATING) www.bellflight.com
TAKEOFF 505 SHP 377 KW
MAX CONTINUOUS 459 SHP 342 KW
In Asia Pacific, PT. Whitesky relies on their two Bell 505s for air taxi/charter and medical evacuation for their HeliCity project in Jakarta, Indonesia.
“I have to be honest with you, the first time I saw the 505 in Dallas I knew it was the perfect helicopter for Jakarta and our project, HeliCity. With our experience working in these types of operations, it can be difficult to learn to operate several different machines at once. The 505 is easy for pilots to learn, with its advanced avionics and FADEC computer systems. The FADEC is a safety feature that’s nice for us. Instead of needing a twin-engine helicopter, we have the three levels of redundancy in a single engine helicopter.”
- PT. Whitesky CEO, Denon Prawiraatmadia
22 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 SPECIAL FEATURE ASIA-PACIFIC FLIGHT ACTIVITY 2020 Q2
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SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 23 SPECIAL FEATURE: ASIA-PACIFIC FLIGHT ACTIVITY 2020 Q2
2020 Q2 ASIA PACIFIC BUSINESS JET FLIGHT ACTIVITY TOTAL DEPARTURE FLIGHTS FROM APAC TOTAL ARRIVAL FLIGHTS TO APAC
9.3% -1.3% 9.3% -1.1% -29.3% -29.1% -70.3% -84.5% -83.4% -70.2% -84.6% -83.6%
6,807 7334 7,266 6,227 6,722 6,120 6539 5950 6,097 6,313 6,041 5,931 6,150 6,030 5,907 5,879
4,171 4,186
2178 2,168 988 988 972 965
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun
2020 Dep. Flights 2019 Dep.Flights YoY Growth Rate 2020 Arr. Flights 2019 Arr .Flights YoY Growth Rate
2020 Q2 BUSIEST REGIONS (DEPARTURE) INTERNATIONAL FLIGHTS VS. DOMESTIC FLIGHTS
2020 Q2
32%, 68%, 1,321 2,843
2020 Q1
43%, 7,386 57%, 9,653
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Domestic Flights International Flights FLIGHT DURATIONS Apr May Jun 2020 Q2 vs 2019 Q2 40% -71% -66% -79% -75% 35% -82% -85% -83% 30% DEPARTURE AREA FLIGHTS YOY GROWTH RATE 25% Israel 583 - 60% 20% United Arab Emirates 369 - 75% Saudi Arabia 362 - 79% 15% Mainland China 353 - 86% 10% Lebanon 309 - 43% 5% Japan 280 - 78% 0% Iraq 165 2% Georgia 154 - 65% Hong Kong SAR 145 - 82% 1 to 2 hours 1 to 3 hours 2 to 4 hours 3 to 4 to 5 hours 4 to Kazakhstan 128 - 58% Max 30 min. 30 min. to 1 hours 30 min. to More than 5 hours More During Q2, business aviation flights in the Asia-Pacific region Lockdown lifts are being seen throughout North America and declined by 78.8%, compared with the same period in 2019. As the Europe. As such, business aviation activity in May and June showed Covid-19 pandemic continuted to spread globally in the second signs of recovery. During these two months there was a significant quarter countries imposed tight restrictions on movement to halt increase in the long-range category (flights with a duration of more the spread of the virus. Consequently, flight activity was more than five hours). seriously affected than during Q1. Flights ( departures & arrivals) in APAC dropped each month in Q2; from 4,346 in April to 1,960 in In Q2, the proportion of international flights was higher than in Q1, May and to 1,953 in June. accounting for 68% of all business jet activity. Notably, Turkey, the United States, Germany, United Kingdom and Greece were the Top As the Covid-19 situation in mainland China has begun to subside, 5 destinations for international business jet flights. the domestic business jet market saw more activity. Q2 saw 280 * Unless otherwise noted, all numbers are compared on a year-on-year basis. domestic flights, making it the most active regional market (in * * The Oceanian traffic only consists flights arrived in Asia terms of business jet activity). Data Source: WINGX
24 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 SPECIAL FEATURE: ASIA-PACIFIC FLIGHT ACTIVITY 2020 Q2
TOP AVIATION HUBS’ PERFORMANCES
There were a total of 537 business jet departures in Greater China, GREATER CHINA 2020 Q2 PERFORMANCE falling 86% compared with the second quarter of last year. -90%, 38 -86%, 353 Ultra Long Range Large Cabin Super Light During Q2, 353 flights departed from mainland China in total. As a -99%, 1 Super Midsize ban on all non-resident foreign nationals from entering the territory -82%, 145 remains in place indefinitely, domestic flights within Mainland China represented the largest portion of activity, with 280 flights. 193, -89% 140, -78%
Mainland China 10, -9% Taiwan 7, -94% Macau Hong Kong *Light Jet 2, -87% *Airliner/Bizliner(Jet) 1, <1%
Q2 DEPARTURE BY CITY Asia Southeast Asia Europe North America Oceania Total FROM BEIJING FROM SHANGHAI 199 Q2 Flights: 57 163 Q2 Flights: 70 YoY Growth Rate: -91% YoY Growth Rate: -86%
88 81 153 73 128 54 52 54 14 3 0 2 67 153 54 53 45 33 23 9 8 8 7 10 13 6 6 12 15 10 10 4 5 5 2 2 3 1 1 2 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun
FROM GUANGZHOU FROM HONG KONG 45 Q2 Flights: 32 314 Q2 Flights: 145 YoY Growth Rate: -76% 256 247 YoY Growth Rate: -82% 27 27 22 35 217 113 5 0 20 12 147 23 21 18 110 73 62 65 58 7 39 5 4 4 3 21 20 20 20 17 17 20 2 15 13 12 11 7 4 1 4 1 1 3 1 2 1 2 1 0 0 0 0 0 0 0 0 0 0 0 0 0
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun
Flight activity from Beijing saw a continued decline in Q2, down by 91% Shanghai. Guangzhou-based flights declined significantly, as well, by compared with the previous year. A new Covid-19 outbreak in Beijing 76%, with 32 flights in total. arose mid-June, ending a 55 day streak without local transmissions. The city quickly worked to halt further outbreaks locking down Beijing With entry restrictions implemented - restricting foreign arrivals and in June. Thus, there was no business jet departures from the city. requiring 14-day quarantine, Hong Kong had a significant regression in Q2, with business jet activity down 82%. Flights to mainland China and Flight activity departing from Shanghai dropped 86% in Q2, with a total North America dominated the flight activity in Hong Kong. of 70 flights. In addition to domestic flights within mainland China, North America was a top destination for business jets departing from * Unless otherwise noted, all numbers are compared on a year-on-year basis. Data Source: WINGX
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 25 SPECIAL FEATURE: ASIA-PACIFIC FLIGHT ACTIVITY 2020 Q2
Q2 DEPARTURE BY CITY Asia Southeast Asia Europe North America Oceania Total FROM TOKYO FROM SINGAPORE 217 222 Q2 Flights: 74 286 Q2 Flights: 48 YoY Growth Rate: -87% 240 135 YoY Growth Rate: -94% 150 87 42 181 39 168 131 12 20 5 4 103 97 57 65 42 41 34 25 25 19 19 18 17 16 11 9 7 6 6 5 1 4 4 4 3 1 1 3 1 1 3 4 1 1 2 2 1 2 1 2 10 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun
Flights departing from Tokyo fell 87% in Q2. Flights within Asia dropped entering or transiting through the city-state. Further to that, in June, from 25 flights in April to zero in June. However, arrivals into North long-term travelers or residents coming from specified countries/ America from Tokyo increased throughout. regions would no longer need to server a mandatory 14-day quarantine at dedicated quarantine facilities; rather the quarantine could be served at Departures from Singapore were down -94% y-o-y in Q2. In March,the home. The move was expected to translate to move business jet activity. Singapore Government placed restricted all short-term vistors from
2020Q2 ASIA PACIFIC BUSINESS JET FLIGHT ACTIVITIES TOTAL FLIGHT ACTIVITIES BY SIZE CATEGORY TOP OEM PERFORMANCE COMPARISON YOY%
Airliner / Bizliner, -93%, 47 Very Light, -72%, 75 -35% Entry Level, -64%, 4 -66% Super Light, -46%, 217 -76% -81% -84% Super Midsize, -74%, 353 Flights YoY Growth Rate 1,118 1,087 Light, -66%, 367 Large Cabin, -76%, 1,450 535 Midsize, -62%, 491 469 301
Ultra Long Range, -86%, 1160 Learjet Cessna Embraer Gulfstream Bombardier
In light of Covid-19, medical and cargo flights have played an important TOP 10 CITIES (DEPARTURE + ARRIVAL FLIGHTS) role in business aviaiton activity. In Q2, flights utilizing large cabin jets dominanted the market. 497 Depature Arrival
In terms of business jet activities by OEM: flights using Bombardier and 376 Gulfstream aircraft decreased by 81% and 84%. 302 274 Cities in the Middle East saw significantly more flight activity than most 235 229 200 aviation hubs in the Asia-Pacific region during Q2. Notably, Hong Kong 159 153 157 had the 6th most traffic, with 145 flights departures and 84 flights arrivals. Baku Tbilisi Beirut Riyadh Tel Aviv Tel Jebel Ali Shanghai Abu Dhabi Beersheba Hong Kong
* Unless otherwise noted, all numbers are compared on a year-on-year basis. Data Source: WINGX
26 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 PRE-OWNED MARKET ANALYSIS BELL 412
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 27 PRE-OWNED MARKET ANALYSIS: BELL 412
MODEL INTRODUCTION
Introduced in the 1980s, the Bell 412 is a twin-engine utility helicopter powered by Pratt & Whitney PT6T-3D Twin Pac engines, the 412 EP has still in production today. It is widely noted for its reliability in varying a useful load capability of 5,100 lbs / 2,313 kg. The EPI is powered by climates and multi-mission flexibility. After a few variants stemming the Pratt & Whitney Canada PT6T-9 engines, replacing the 3D. from the original 412 model – SP (Special Performance) and HP (High Performance), today’s EP (Enhanced Performance) and EPI versions In the cockpit, the 414EPI is certified for single pilot IFR operation. continue to be a sought-after aircraft. The three-axis, dual digital automatic flight control system (AFCS) enables safe and easy operation while reducing the pilot workload. The Bell 412 EPI model has an expansive cabin, with 220 ft3 / 6.2 The avionics include multi-functional displays, VHF antenna, VHF m3 of space designed to be easily reconfigured to comfortably seat transceiver, magnetic compass, distance measuring equipment, up to 14 passengers. Its wide-opening 7.7 ft / 2.3m doors also allow transponder, airspeed indicator, and altimeter. The EPI comes with the for quick and easy loading and unloading. The Bell 412 EP model is addition of the Bell BasiX Pro fully integrated glass flight deck. MODEL COMPARISON Model Bell 412EPI Bell 412EP S76C++ AW139 Production Period 2014 - present 1994 - 2013 2006 - 2012 2004 - present
Engine Type PWC PT6T-9 PWC PT6T-3D Turbomeca Arriel 2S2 PWC PT6C-67C Max Range (30 Min Reserve, nm) 318 314 335 580 Useful Load (lb) 3,911 4,028 3,571 4,701 Average Speed (Standard Trip, kts) 115 115 131 134
Fuselage (W*L) 9.3 ft x 56.2 ft 9.3 ft x 56.2 ft 10 ft x 52.5 ft 11.4 ft x 54.6 ft
Passengers Capacity & Crew 14 Pax / 1 Crew 14 Pax / 1 Crew 13 Pax / 1 Crew 15 Pax / 2 Crew Cabin Width (ft.) 8.00 8.00 6.25 7.20 Cabin Height (ft.) 4.35 4.35 4.50 4.70 Cabin Length (ft.) 8.62 8.62 8.75 8.85 Cabin Volume (cu.ft.) 208 208 205 282
Total Variable Cost/Hour (USD/Hour) 1,387 1,348 1,827 1,645
* Data Source: Conklin & de Decker ** Data Source: Amstat DELIVERIES AND OPERATING REGIONS
The Bell 412 EP is known for is flexibility and versatility. The EP model in operation. The top countries using 412 models include Mexico, has a significantly higher number of deliveries than its predecessors, Spain, Indonesia, and the US. which until now is still in production under the name of 412EPI with upgraded glass cockpit and electronical controlled engine. The average year of manufacture for the 412EP model on market is 2005, which means that like its major competitors such as the S76 or Europe and the US are home to mostly older 412 models such as AW139, the Bell 412EP fleet is aging with its value slowly depreciating. the original 412, 412SP and HP models, all of which have stopped production. While Asia and the Middle East have more 412EP models
BELL 412 OPERATING REGIONS BELL 412 TOP OPERATING COUNTRIES
412 412HP 412SP 412EP* 412 412HP 412SP 412EP* 160 60
140 50 120 40 100 80 30
60 20 40 10 20 0 0 India U.A.E U.S.A Asia Spain Japan Africa Mexico Nigeria S. / C. Canada W.Asia Australia America Oceania Indonesia W. Europe W. Australia / Australia N. America Mid. East / E. Europe / E. Europe
28 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 PRE-OWNED MARKET ANALYSIS: BELL 412
BELL 412 AGE DISTRIBUTION 35 412 412HP 412SP 412EP*
30
25
20
15
10
5
0 2017 2016 2010 1997 2014 1987 1991 2011 2015 2007 1981 2019 2013 2018 2001 2012 1994 1995 1982 1983 1986 1988 1990 1992 1996 1998 1989 1993 1999 1984 2000 2005 2006 2003 2008 2002 2004 2009
*EP model includes EPI, data source: Amstat
BELL 412 OPERATIONS IN ASIA PACIFIC
In the Asia-Pacific region, the EP model has been popular since the Model Breakdown Fleet Size 90s with the EPI model also increasing in popularity. Asia currently Bell 412EP 202 operates the largest fleet of 412 helicopters with the majority of the Bell 412 20 fleet made up of the Bell 412EP model. Among regional countries, Bell 412HP 20 Indonesia, Japan as well as India are the major 412EP users. This model Bell 412EPI 18 throughout the Asia-Pacific region is mainly used for multi-tasking, law Bell 412SP 12 enforcement (by Japanese, Philippine and Thai governments) or VIP/ Grand Total 272 corporate flying for large corporations, as well as offshore operations.
In the Oceania region, such as Australia and Papua New Guinea, Top Operators In APAC Fleet Size they have a relatively smaller scale of Bell 412 fleet under operation Japan Fire Dept 22 compared to Asia. And the 412 fleet is mainly controlled by major Global Vectra 18 leasing companies such as CHC, Babcock, or Kestrel Aviation. This Babcock 16 model in Oceania is often used for multi-mission purposes including Royal Thai Police 12 EMS, offshore and air transport. Aero Asahi 10 Kestrel Aviation (Australia) 10 PT National Utility Helicopter 10 BELL 412 IN ASIA PACIFIC Gov’t of Japan 10 Japan Coast Guard 10 Corporate, 6 (2%) Private, 2 (1%) Japan National Police 10 Charter, 8 (3%) % of Total 47% SAR,18 (6%)
Law Enforcement, 32 (12%)
FOR MORE INFORMATION, GO Offshore, 32 (12%) TO ASIAN SKY MEDIA’S CIVIL HELICOPTER COUNTRY PROFILES. Multi-Mission, 144 EMS, 34 (12%) (52%) 52+126+321+G www.asianskymedia.com SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 29 PRE-OWNED MARKET ANALYSIS: BELL 412
PRE-OWNED MARKET ANALYSIS
INVENTORY VALUE (PRICES X FLEET FOR SALE)
Bell 412EP AW139 S76C+ S76C++ 250
200
150
100 Inventory Value (M USD) Value Inventory 50
0 Jul-17 Jul-16 Jul-15 Jul-19 Jul-18 Jan-17 Jan-16 Jan-15 Jan-19 Jan-18 Jan-20 Nov-17 Sep-17 Mar-17 Nov-16 Sep-16 Nov-19 Mar-16 Nov-15 Sep-19 Sep-15 Nov-18 Sep-18 Mar-15 Mar-19 Mar-18 Mar-20 May-17 May-16 May-15 May-19 May-18 May-20
Similar to its fellow competitors - the S76 and AW139, the 412EP and AVERAGE ASKING PRICES TREND EPI’s performance on the pre-owned market saw a slowly depreciating Bell 412EP AW139 S76C+ S76C++ value trend. The Bell 412EP’s value has depreciated as its operating 12 fleet ages, but given the fact it has a relatively younger fleet the depreciation speed is still slower than the AW139 or S76C++ models. 10
ASG expects the pre-owned 412EP’s average asking prices will 8 stabilize, similar to the S76C+ model, in around 2 years’ time.
Currently there are around 20-25 412EP models listed publicly for sale. 6 This number has been decreasing, like other models, as the helicopter markets slowly begins to revive; a trend seen since 2019. The highest Asking Price (M USD) 4 number of EP models for sale was seen in 2019 Q1 when there was over 30 for sale. 2 Jul-17 Jul-16 Jul-15 Jul-19 Jul-18 Apr-17 Oct-17 Apr-16 Apr-15 Apr-19 Apr-18 Oct-16 Jan-17 Apr-20 Oct-15 Oct-19 Oct-18 Jan-16 Jan-15 Jan-19 Jan-18 There is a large variety of pre-owned 412EP available on market – Jan-20 ranging from mid- 90s models to the most recent EPI models. The most popular 412EP models on market are around 10 years old with a AVERAGE DAYS ON MARKET current asking price of around US$4M. This market segment has been Bell 412EP AW139 S76C+ S76C++ the most active and transparent. Most likely buyers will be dealing with 900 sellers with their aircraft based in Asia. 800
On average we see around one or two 412EP transactions every 700 month. According to AMSTAT, buyers of 412EP often use it to replace 600 their 407, 212 or AS350. Given the vast market reserve of these models ASG foresees that the 412 will continue to have robust market demand 500 in the future 400
300
200
100
0 Jul-17 Jul-16 Jul-15 Jul-19 Jul-18 Apr-17 Oct-17 Apr-16 Apr-15 Apr-19 Oct-16 Apr-18 Jan-17 Apr-20 Oct-15 Oct-19 Oct-18 Jan-16 Jan-15 Jan-19 Jan-18 Jan-20
30 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 PRE-OWNED MARKET ANALYSIS: BELL 412
FLEET FOR SALE Bell 412EP AW139 S76C+ S76C++ 40
35
30
25
20
15
10
5
0 Apr-17 Apr-16 Oct-17 Apr-15 Apr-19 Apr-18 Oct-16 Apr-20 Jun-17 Oct-15 Oct-19 Oct-18 Jun-16 Jun-15 Jun-19 Jun-18 Feb-17 Jun-20 Aug-17 Feb-16 Aug-16 Feb-15 Feb-19 Feb-18 Aug-15 Aug-19 Feb-20 Aug-18 Dec-17 Dec-16 Dec-15 Dec-19 Dec-18
TRANSACTIONS Bell 412EP
5
4
3
2
1
0 Jul-17 Jul-16 Jul-15 Jul-19 Jul-18 Apr-17 Oct-17 Apr-16 Apr-15 Jan-17 Oct-16 Apr-19 Apr-18 Apr-20 Oct-15 Oct-19 Jun-17 Oct-18 Jan-16 Jan-15 Jan-19 Jun-16 Jan-18 Jan-20 Jun-15 Jun-19 Jun-18 Jun-20 Feb-17 Aug-17 Feb-16 Aug-16 Feb-15 Feb-19 Feb-18 Aug-15 Aug-19 Feb-20 Aug-18 Sep-17 Nov-17 Dec-17 Mar-17 Sep-16 Nov-16 Dec-16 Sep-15 Sep-19 Nov-15 Nov-19 Sep-18 Mar-16 Nov-18 Dec-15 Dec-19 Dec-18 Mar-15 Mar-19 Mar-18 Mar-20 May-17 May-16 May-15 May-19 May-18 May-20
Data Source: Amstat & Asian Sky Group Q1 2020 – GLOBAL MARKET UPDATE GLOBAL JET CAPITAL
Q1 2020 can be looked at as two separate stories. Leading up to the World Health Organization’s (WHO) announcement on March 11 that COVID-19 was an official pandemic, most key business aviation metrics were in good shape when measured against Q1 2019. Following the WHO announcement and ensuing social distancing measures, the industry entered into a forced hiatus, negatively impacting flight operations, aircraft production, and deal flow. We are now in a period of uncertainty that looks to continue through the second quarter.
OVERALL, KEY BUSINESS JET MARKET • There is evidence that the business jet market was undergoing INDICATORS WERE MIXED IN Q1 2020 a fleet renewal before the outbreak of COVID-19. Operators were retiring older aircraft in response to mandated upgrade requirements, while new deliveries led to a modest increase • Business jet operations declined 9.7 percent compared to the in younger aircraft in the fleet. same period last year, a trend that had started internationally in late Q4 2019 and accelerated globally late in Q1 2020. • Overall, new and pre-owned transactions for the quarter were down 6.7 percent by unit volume and 16.4 percent by dollar • While OEM backlogs remain healthy, a mix of shutdowns volume versus the same period last year. Most of the drop- and furloughs across the production ecosystem led industry off was felt in March as the industry hit the “pause” button. forecasters to reduce supply side forecasts between 25-50%. While difficult for everyone in the industry, this unusual • Residual values experienced modest declines in Q1 2020 as dynamic may act as a guardrail on aircraft values as the full model-by-model volatility continued. impact of the pandemic plays out.
Looking ahead, the full effect of the coronavirus on the market • While inventories, as measured by the percentage of the remains unknown, although speculative comparisons to 2008 and active fleet for sale, have been inching up since Q1 2019, the impact of the Great Recession are rampant. they ended Q1 2020 below 10%. This is a historically sound position. Furthermore, to date, there has not been a major The current environment demonstrates some important differences increase in new aircraft being listed for sale. to 2008, however. The cause of the economic disruption is a virus, not widespread failures in financial regulation. Banking systems and • The overall fleet continues to show signs of aging, with 55% capital markets are not in a state of seizure. Government reaction of the fleet now greater than 13 years in age. While there is and intervention has been swift and expansive. OEM production evidence that operators are flying aircraft longer, these data has been curtailed in a disciplined fashion to protect backlogs and suggest a growing need for fleet renewal. ultimately aircraft values. This is clearly a different environment.
32 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 Special Feature on the Global Economy by Jason Thomas, Managing Director & Head of Global Research for The Carlyle Group
1. When people don’t work, shop or travel, it shows While investors may be in the economic data. March’s economic collapse continued in April with implied growth rates deeply looking past the ‘lockdown’ negative across virtually every Indicator we track. and focused instead on Yet, when measured relative to March 31, a slow and uneven recovery in China and the first signs of life in the reopening, business Europe caused our (i.e., the Carlyle Group’s) forward- managers are taking a looking index to rise despite further deterioration in U.S. data. more cautious tac.
2. Officially, the U.S. economy contracted at a -4.8% 6. The only economy where hiring intentions increased annualized rate in Q1-2020, a remarkable result over the past month was Italy’s. There were other signs considering that official data were consistent with 2% of life in Europe: more workplaces were open and more annualized growth through the first 10 of the quarter’s work trips occurred, contributing to more electricity 13 weeks. Our data suggest real consumption fell - consumption and better manufacturing numbers. In 32% annually in April, as spending on experiences many European economies, more retail establishments (travel, tourism, events, etc.) and big-ticket goods fell were open at the end of April than the end of March. to a fraction of pre-crisis levels. The drop in industrial Online sales continue to grow rapidly. and logistics volumes appears less steep, but energy development is in free fall. 7. Despite these hopeful signs, the euro zone economy continues to contract at even more dramatic rates 3. Despite worse U.S. data, U.S. stocks rebounded than those observed in the U.S., with a -14% annualized sharply over the month, with the S&P 500 up by 33% fall in Q1-2020 GDP and an implied annualized decline from its March lows and forward price-to-earnings in April retail sales of nearly -40%. Unfortunately, the ratios 13% above their February peak. While much economies hardest hit by the virus, Italy and Spain, of this may be explained by the scale of announced will also be among the most impacted by any travel fiscal and monetary policy support, improving public restrictions that extend into summer given tourism’s health data also play a role. The level of the S&P 500 ~15% contribution to GDP. has risen in lockstep with the decline in new COVID- 19 cases (new infections net of recoveries) and 8. China continues to recover at a pace that looks either projected U.S. COVID-19 mortalities. remarkably fast or frustratingly slow depending on your point of view. Over a span of six weeks, China went 4. Ironically, the improvement in public health data may from fully locked down to operating at 95% of capacity have come at the expense of the private health sector. – an impressive achievement. Rather than experience The sharp decline in non-essential medical, surgical, setbacks in April, the economy consolidated these and dental procedures subtracted 2.25 percentage gains with over 98% of retail locations in operation, points from U.S. GDP in Q1-2020, a result that implies an impressive 34% rebound in logistics volumes, that revenues at private health care providers and and ongoing improvement in real estate markets. To clinics are suffering every bit as much as those in detractors, the Chinese economy looks soft. Declines the retail, energy, or airline sectors. Our data suggest in retail foot traffic, air travel, and subway ridership all U.S. health care hiring is down -15% over the course point to skittish consumers worried about a “second of the pandemic. wave” of infections. 5. While investors may be looking past the “lockdown” 9. Interestingly, the same concerns that depress transit and focused instead on the reopening, business ridership also bolster auto sales. After declining by managers are taking a more cautious tac. Our -80% in February and - 40% last month, auto sales in proprietary data point to another leg down in the labor China dropped by just -7% in April relative to the same market, with hiring intentions off significantly across month last year. An 11% annual increase in Beijing virtually every sector of the economy. The initial boom auto traffic relative to April 2019 also suggests auto in grocery, delivery and logistics hiring has subsided demand has risen measurably. Overall retail sales as those businesses have scaled up to meet demand. continue to contract on an annual basis but at a much Overall, job postings have declined by -40% over the slower rate than observed a month ago. past six weeks and capex budgets have been cut by -18%. Cancellation of jobs, projects, and equipment 10. The effect of India’s lockdown was evident in the purchases signals that management teams are April data. Equipment sales fell at a -34% annual rate, preparing for a future that looks far less sanguine than suggesting that the economy is in the midst of its the one pictured by stock market investors. worst performance since the 1991 reforms.
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 33 Q1 2020 – GLOBAL MARKET UPDATE
FLIGHT OPERATIONS
GLOBAL BUSINESS JET OPERATIONS U.S. Rest of World
1.11 M 1.15M 1.12M 1.14M 1.11 M 1.15M 1.13M 1.15M 1.00M 15.0% 16.1% 15.7% 14.6% 15.1% 16.3% 16.0% 14.5% 14.7%
85.0% 83.9% 84.3% 85.4% 84.9% 83.7% 84.0% 85.5% 85.3%
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1
In 2019, the FAA reported 4.53 million flight operations (defined as operations. Flight operations increased in early March as people flew a takeoff and landing) around the globe, representing a 0.3 percent to their sheltering locations.ii However, flights decreased over the increase from 2018. Operations appeared to continue their steady course of March, leading to a 9.7 percent year-over-year decline for growth in 2020, increasing 1.2 percent year-over-year in January and the quarter. February. However, the outbreak of COVID-19 disrupted global flight
OEM BACKLOGS Q4 BACKLOG AT MAJOR BUSINESS JET OEM’S FORECAST PRODUCTION
Bombardier Cessna Dassault Embraer Gulfstream Scenario 1 Scenario 2 Scenario 3 Scenario 4 Q4 Forecast 800 $33,303 700 $31,022 $30,569
Million USD 600
500 400 300 200 2025F 2018 2019 2020F 2021F 2022F 2023F 2024F
2017 Q4 2018 Q4 2019 Q4 There are many unknowns that will affect the market in the future, such as how long the virus will last and what the long-term economic Backlogs at major business jet manufacturers increased in Q4, driven effects will be. As a result, many analysts are suggesting a number by strong demand for recently certified new models. In Q4, backlogs of scenarios, rather than using a single model to forecast production. at five major OEMs reached $33.3 billion, an 8.9 percent increase For example, Rollie Vincent of JetNet iQ, laid out four scenarios, with from a year earlier. Strong quarterly results from Dassault, Embraer, production forecasts ranging from 377 to 630 aircraft versus a Q4 and Gulfstream drove the gains. Orders for new aircraft will likely 2019 forecast of 730. Each scenario makes different assumptions decline as a result of COVID-19 and the efforts to contain it, putting about a range of factors, including sold to unsold delivery positions downward pressure on backlogs. At the same time, manufacturers by OEMs, announced and additional production furloughs, and other have reduced production levels, which could stabilize backlogs factors. At this point, JetNet iQ expects business jet deliveries to be despite lower order intakes. down 40-50 percent year-over-year in 2020 in its most likely scenario.
34 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 Q1 2020 – GLOBAL MARKET UPDATE: GLOBAL JET CAPITAL
FOR-SALE INVENTORY PERCENT OF BUSINESS JET FLEET FOR SALE AIRCRAFT LISTED FOR SALE BY WEEK (2020 YTD) TOTAL 0-12 YEARS 13 YEARS (NOT ACCUMULATING INVENTORY)
14% 58 58 59 57 54 52 54 53 48 50 48 44 46 47 47 47 12% 41
10% 15 8% WK1 WK2 WK3 WK4 WK5 WK6 WK7 WK8 WK9 WK10 WK11 WK12 WK13 WK14 WK15 WK16 WK17 WK18
6%
4% The number of aircraft listed for sale each week has remained consistent throughout 2020, despite disruptions due to the COVID- 2% 19 outbreak. There has been some mention of “shadow inventory,” or inventory intended for sale but not officially listed. However, available 0% data reflects stability. Throughout 2020, the average number of 2020 Q1 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 aircraft listed for sale has been 48, with a peak of 59 in mid-February. For comparison, as the Great Recession took hold in 2008, new listings averaged 70 per week with peaks of 106, 115 and 120 in Q4 2008. One reason for the steady listings may be that aircraft owners Pre-owned inventory has gradually increased from historical lows are waiting to see how the COVID-19 pandemic plays out and what in mid-2018. As a percentage of the overall fleet, increases have effect it will have on the economy before deciding what to do with been gradual and remain below 10 percent, considered a historical their business jets. It also suggests an absence of speculative activity average. Jets younger than 13 years old are typically seen as more and excessive leverage, which may serve to cushion the effect of a desirable aircraft. drop-off in demand.
FLEET STATUS
BUSINESS JET FLEET BY AIRCRAFT AGE* CHANGES IN OPERATIONAL BUSINESS JET FLEET
TOTAL 0-6 YEARS 7-12 YEARS 13+ YEARS
8.0% 0-6 Years, 4,755 (21%) 13+ Years, 12,357 (55%) 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% 7-12 Years, 5,362 (24%) -10.0% 2020 Q1 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 * as of Mar 2020 55+2421+G
Following the financial crisis of 2008, reduced new production and out of service. As a group, older aircraft continue to increase as longer lifespans for in-service jets led to an aging fleet increasingly aircraft built around the financial crisis age. However, young aircraft made up of older jets (defined as aircraft older than 12 years). More (defined as aircraft younger than 7 years old), continue to increase recently, however, that trend has slowed. Mandated upgrades (such as OEM deliveries of new models increase. as ADS-B Out and FANS 1/A) led to some older aircraft being taken
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 35 Q1 2020 – GLOBAL MARKET UPDATE: GLOBAL JET CAPITAL
FLIGHT OPERATIONS BUSINESS JET TRANSACTIONS New Pre-Owned
$8.8B $8.6B $6.1B $7.3B $6.0B (951 Units) $6.8B $6.9B (991 Units) (727 Units) (840 Units) (706 Units) $5.8B (759 Units) (738 Units) 44.3% (629 Units) 39.9% $4.9B 46.8% 41.1% 39.0% (587 Units) 53.3% 48.8% 43.2% 48.9% 53.2% 55.7% 58.9% 61.0% 60.1% 46.7% 51.2% 56.6% 51.1%
2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1
JANUARY & FEBRUARY TRANSACTIONS MARCH TRANSACTIONS $3.2B $3.0B $2.9B $3.0B $2.5B (322 Units) (405 Units) (347 Units) (282 Units) $2.3B (370 Units) 39.8% 32.2% (271 Units) 67.7% 54.5% 58.8% 38.0%
60.2% 67.8% 32.3% 45.5% 41.2% 62.0%
2018 2019 2020 2018 2019 2020
In January and February 2020, transaction unit volume was 6.6 percent compared to a year earlier and transaction value was down percent higher than the same period in 2019. However, transaction 21.6 percent. As nations implemented social distancing and “stay-at- value was down by about 13.8 percent due to lower new deliveries home” orders, it became difficult to conduct the necessary activities and a higher proportion of smaller aircraft transactions taking place. to buy and sell aircraft (e.g. inspect the aircraft, travel to a location to The market performance in January and February set the stage for a deliver or pick up the aircraft, etc.). Furthermore, many business jet stable year of business jet transactions. OEMs and suppliers shut down or slowed operations, delaying new deliveries. Overall, transactions for the quarter were down 6.7 percent However, the outbreak of COVID-19 had an effect on business jet by number and 16.4 percent by value. transactions in March. The World Health Organization (WHO) officially declared COVID-19 a global pandemic on March 11, 2020. Note: That transaction metrics are preliminary and may require As a result, transaction numbers in March 2020 were down 23 adjustment if additional transactions are reported by the U.S. FAA.
RESIDUAL VALUE YOY % VALUATION CHANGE 1.3% 0.8% 0.8% 0.8%
-1.3% -3.0% -4.1% -5.9%
-8.0% -8.1% 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1
The above chart compares the year-over-year percentage change varied, particularly heavy jets in late 2019. This period of stability in value of like-aged aircraft over time (e.g., the difference between follows a period of decline between 2015 and 2017, led by relatively value of an eight-year-old aircraft from one year to the next). Global lower transaction levels and weak demand outside North America. Jet Capital analyzed a basket of aircraft as a proxy for the overall In 2020, the year started off with modest declines in value. It is market and increases or decreases in value are not applicable to unlikely the early declines were the result of COVID-19, as the virus individual aircraft or aircraft make/model. For the value of a specific did not cause major disruptions until late in quarter. Instead, the aircraft, please contact a licensed aircraft appraiser. value declines were likely routine fluctuations normally seen from quarter to quarter as a result of multiple factors and patterns. There Declining for-sale inventory and strong transaction levels in 2017 and is not enough data to assess the impact of COVID-19 on business jet 2018 led to stable residual values in 2018 and 2019. Even with overall valuations quite yet. market improvements in 2018 and 2019, the values of individual jets
36 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 Q1 2020 – GLOBAL MARKET UPDATE: GLOBAL JET CAPITAL
CONCLUSION
Following the official declaration of COVID-19 as a global pandemic caused by a virus rather than widespread failures in the financial on March 11 and the ensuing social distancing measures, the system. Furthermore, swift government intervention combined with a business jet market was forced into a hiatus. As a result, in Q1 2020 healthy banking sector heading into the crisis has avoided significant flight operations were down 9.7 percent year-over-year, OEM new capital markets disruption. Within the business jet industry, OEM deliveries dropped, and new and pre-owned transactions were down production has been reduced, which should help protect backlog and 6.7 percent by unit volume and 16.4 percent by dollar volume versus aircraft values. the same period last year.
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SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 37 MARKET DYNAMICS PRE-OWNED BUSINESS JETS MARKET - 2020 Q2
INVENTORY VALUE (USD)1
WORLDWIDE
$9,992M
$7,592M
$1,728M ASIA PACIFIC
$1,008M
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 2018 2019 2020
The Inventory Value Line represents the number of aircraft actively being marketed for sale in USD terms.2
The Trend Line represents the market’s direction in terms of the balance between sellers and buyers (supply and demand) at today’s price levels. A rising Trend Line indicates that pre-owned activity is stabilizing, with sellers of aircraft increasingly likely to find buyers.
The Signal Line represents an indication of where the market’s direction may be heading in the future. A Signal Line consistently falling below the Trend Line indicates that any improvement in the market’s direction may not be entirely sustainable.
MARKET TREND1 WORLDWIDE
TREND WORSENING TREND REVERSAL
MOVING TOWARDS SELLER’S MARKET MOVING TOWARDS BUYER’S MARKET
1 AIRCRAFT SOLD 80 WORLDWIDE 73
59 54 55 55 56 51 47 46 42 45 45 45 47 44 40 40 41 42 43 38 40 38 35 36 36 33 32 29 31 28 28 26 28 23 22
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 2018 2019 2020
1 The historical inventory value and transactions are subject to change based on latest market information updates. 2 ASG’s Inventory Value line is calculated by taking the total number of aircraft for sale from a selection of 39 different models, multiplied by their average asking prices. Source: AMSTAT & ASG 38 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MARKET DYNAMICS
WORLDWIDE % OF FLEET SOLD
1.10% 1.05% 1.00% 0.95% 0.90% 0.85% 0.80% 0.75% 0.70% 0.65% 0.60% 0.55% 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0.20% 0.15% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
AVERAGE ASKING PRICE
28
26 ASIA PACIFIC
24 MILLION USD MILLION
22
20
18 WORLDWIDE
16
14
12
10 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
% OF FLEET FOR SALE
15%
13%
11 %
9% ASIA PACIFIC
7% WORLDWIDE
5%
3% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
AVERAGE DAYS ON MARKET
550 ASIA PACIFIC 500
450
400
350 WORLDWIDE 300
250
200 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
Source: AMSTAT & ASG SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 39 MARKET DYNAMICS
SUPPLY / DEMAND INDICATORS BUSINESS JETS
SUPPLY VS. DEMAND RATIO AVERAGE DAYS ON MARKET
SUPPLY > DEMAND DAYS ON MARKET % OF FLEET MODEL FOR SALE
AVERAGE AVERAGE
15.8% ACJ318 4.3% ACJ319
NO TRANSACTIONS 5.6% AIRBUS ACJ320 3.0% BBJ 4.5% BBJ2 BOEING 6.2% CL300 3.5% CL350 8.1% CL604 10.8% CL605 6.8% CL650 15.4% CL850 14.5% GL Express BOMBARDIER 9.3% GL XRS 9.5% GL5000 6.5% GL6000 10.7% CIT. CJ3 6.3% CIT. CJ4 2.5% CIT. Latitude CESSNA 7.3% CIT. Sovereign NO TRANSACTIONS 6.1% F2000LX 8.2% F2000LXS 2.3% F2000S 5.2% F7X NO TRANSACTIONS 6.7% F8X
16.7% DASSAULT F900DX 4.2% F900EX 11.7% F900EXe 5.1% F900LX 17.2% L1000 6.7% L600 5.6% L650 EMBRAER 6.5% Phenom 300 12.9% G200 7.8% G280 8.8% G450 NO TRANSACTIONS 5.7% G500 8.1% G550 GULFSTREAM 2.7% G650 4.9% G650ER
450% 400% 350% 300% 250% 200% 150% 100% 50% 0 7.5% 0 200 400 600 800 1000 Average Average AC for sale / Total sold in last 12 months
The above chart reflects where certain aircraft models are positioned These indications do not necessarily mean that prices will be higher in in terms of supply and demand (based on a ratio of completed the future, but it does indicate that sellers of these particular models transactions compared to the number of sellers and the average are more likely to find willing buyers in a shorter period of time than the number of days on the market for a transaction to take place). overall average.
For some model types, given the market indicators shown on the This can be seen most with certain Gulfstream (G200, G450, G550, previous page, the stabilization in pre-owned asking prices and G650), Bombardier models (Challenger 604/605 & Global 5000) decline in inventory level appear to have stimulated increased and Dassault Falcon models (2000 Series and 7X), where more demand, leading to an increase in transactions and a more balanced transactions are occurring relative to the number for sale, and state of supply and demand. transactions are requiring less time on the market for sellers to complete.
Source: AMSTAT & ASG 40 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 BUSINESS JETS MARKET POSITIONING towards supply anddemandmarket earlier). equilibrium portrayed 4. Themomentumofthemarketplace (represented by thetrend 3. Theaverage days forsale relative to theoverall market average. 2. Thenumberofaircraft soldrelative to theaverage numberforsale. 1. Thepercentage ofaircraft forsalerelative to itsfleetsize. including thefollowingfourmarket indicators: model particular each for calculation ‘Marketability’ a on based is and market,overall the to relative model aircraft each of Ratio Demand providesThe above chart a visualrepresentation oftheSupply/ Source: AMSTAT & ASG GULFSTREAM EMBRAER DASSAULT CESSNA BOMBARDIER BOEING AIRBUS CIT. Sovereign Phenom 300 CIT. Latitude GL Express F2000LXS F2000LX F900EXe CIT. CJ4 CIT. CJ3 G650ER F900DX GL6000 GL5000 F900EX F2000S ACJ320 ACJ319 ACJ318 F900LX GL XRS CL850 CL650 CL605 CL604 CL350 CL300 L1000 BBJ 2 BBJ 1 G500 G200 G650 G550 G450 G280 L600 L650 F8X F7X MOVING TOWARDS BUYER’S MARKET Supply &Demand Supply including light jet models as described in the report. including lightjetmodelsasdescribedinthereport. marketits expanded ASG Q3, 2019Since * research toscope modelsjetbusiness 39 include find buyers available, compare to corporateairlinermodels. the variousas well as Gulfstreamtopositioned better appear models, Falcon600, Challenger sizedas Series,medium such 900 jets, & 2000 When taking into account these four factors, most of the the large and Balanced SECOND QUARTER 2020— MOVING TOWARDS SELLER’S MARKET ASIANSKY QUARTERLY |41 MARKET DYNAMICS MARKET DYNAMICS
PRE-OWNED CIVIL HELICOPTERS MARKET - 2020 Q2
INVENTORY VALUE (USD)1
WORLDWIDE
$1,489M
$1,073M
ASIA PACIFIC
$227M
$167M
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 2018 2019 2020
The Inventory Value Line represents the number of aircraft actively being marketed for sale in USD terms.2
The Trend Line represents the market’s direction in terms of the balance between sellers and buyers (supply and demand) at today’s price levels. A rising Trend Line indicates that pre-owned activity is stabilizing, with sellers of aircraft increasingly likely to find buyers.
The Signal Line represents an indication of where the market’s direction may be heading in the future. A Signal Line consistently falling below the Trend Line indicates that any improvement in the market’s direction may not be entirely sustainable.
MARKET TREND1
WORLDWIDE TREND WORSENING MOVING TOWARDS SELLER’S MARKET MOVING TOWARDS BUYER’S MARKET TREND WORSENING
TREND TREND IMPROVEMENT IMPROVEMENT
AIRCRAFT SOLD1 WORLDWIDE 32 28 26 24 21 22 23 21 20 20 20 19 19 19 19 19 15 17 16 14 16 15 17 18 11 12 10 10 12 12 12 12 12 7 7 9 1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2017 2018 2019 2020
1 The historical inventory value and transactions are subject to change based on latest market information updates. 2 ASG’s Inventory Value line is calculated by taking the total number of aircraft for sale from a selection of 16 different models, multiplied by their average asking prices. Source: AMSTAT & ASG 42 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MARKET DYNAMICS
WORLDWIDE % OF FLEET SOLD
0.35%
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
AVERAGE ASKING PRICE
3.6
3.4 ASIA PACIFIC
MILLION USD MILLION 3.2
3.0
2.8 WORLDWIDE
2.6
2.4
2.2
2.0 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
% OF FLEET FOR SALE
5.5%
5.0% WORLDWIDE
4.5%
4.0%
3.5%
3.0% ASIA PACIFIC
2.5%
2.0%
1.5% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
AVERAGE DAYS ON MARKET
700
650 WORLDWIDE 600
550
500
450 ASIA PACIFIC
400
350
300 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 20 20 20
Source: AMSTAT & ASG SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 43 MARKET DYNAMICS CIVIL HELICOPTERS SUPPLY /DEMANDINDICATORS 44 |ASIAN SKY QUARTERLY — compared to thenumberofsellers, andaverage numberofdays onthemarket foratransactionto take place). reflects aircraftThe above where modelsare chart certain positionedintermsofsupplyand demand(basedonarationofcompletedtransactions Average AC forsale /Total soldinlast12months 350% SUPPLY VS. DEMANDRATIO 300% SUPPLY 250% AVERAGE 200% SECOND QUARTER 2020 > 150% DEMAND 100% 50% 0 % OF FLEET % OFFLEET FOR SALE Average 19.1% 4.4% 5.0% 0.7% 0.4% 9.0% 7.1% 2.4% 4.4% 4.3% 3.7% 3.3% 6.2% 4.4% 9.4% 3.9% 3.1% 1.4%
SIKORSKY LEONARDO BELL HELICOPTER AIRBUS HELICOPTERS AW109SP GN S76C+ AW139 BELL 429 BELL 412HP BELL 412EP BELL 407 BELL 206LongRanger BELL 206JetRanger EC155B EC135T2 EC135P2 H155 H145 H130 H125 EC145 MODEL AVERAGE DAYS ON MARKET 0 100 200 DAYS ONMARKET 300 400 500 600 AVERAGE 700 800 Source: AMSTAT &ASG MARKET DYNAMICS
MARKET POSITIONING CIVIL HELICOPTERS
MOVING TOWARDS Balanced MOVING TOWARDS Supply & Demand BUYER’S MARKET SELLER’S MARKET
EC145
H125
H130
H145
H155 AIRBUS HELICOPTERS EC135P2
EC135T2
EC155B
BELL 206 JetRanger
BELL 206 LongRanger
BELL 407
BELL412EP BELL HELICOPTER
BELL412HP
BELL 429
AW109SP GN
AW139 LEONARDO
S76C+ SIKORSKY
The above chart provides a visual representation of the Supply / Demand Ratio of each aircraft model relative to the overall market, resulting in a ‘Marketability’ calculation of each particular model based on the following four market indicators:
1. The percentage of aircraft for sale relative to its fleet size. 2. The number of aircraft sold relative to the average number for sale. 3. The average days for sale relative to the overall market average. 4. The momentum of the marketplace (represented by the trend towards supply and demand market equilibrium portrayed earlier).
Source: AMSTAT & ASG SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 45 GLOBAL PRE-OWNED BUSINESS JET MARKET REPORT - JUNE 2020 AMSTAT
It remains to be seen whether the trends of the last few months will continue long-term. However, whether the result of a COVID-19 driven reduction in travel or the logistical issues surrounding getting deals done under quarantine, or both, there was a year-over-year reduction in resale transactions in March and April this year. Further, the analytics clearly show a reduction in estimated aircraft values.
What is also interesting is that inventories, while up, are not indicating a panic to sell and levels remain below recent highs seen in 2017. If inventory levels remain relatively low and interest in business aviation materializes as an alternative to commercial travel in parallel with an economic recovery, then we might expect to see a significant uptick in transaction activity leading to a recovery in aircraft values in the coming months.
- Andrew Young, AMSTAT General Manager
AMSTAT releases interim business aircraft resale market data • The deepest decline for an individual make/model was over showing the short-term impact of COVID-19 on aircraft values, 20% in heavy jets transactions and inventory. • A slower decline in Light Jet and Turboprop values was found in the data in early June AIRCRAFT VALUES
The overall business jet market has experienced a significant decline in estimated values since early April in our most recent update, and AIRCRAFT VALUES COMPARED TO Q1 2020 this update shows a consistent decline across all Business Jet Groups. Some individual makes/models fell between 15% and 20% Category* Average Median with the deepest decline of over 20% for an individual make/model All Business Jets -13% -12% in the heavy jet group. Heavy Jets -15% -14% The below highlights the changes observed since early April 2020: Super-Midsize -14% -14% • Significant declines in values across all business jet groups Medium Jets -12% -11% since early April Light Jets -12% -10% • Some individual make/model values fell between 15% and 20% in heavy jets and super-ids Turboprops -10% -10%
46 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 Q1 2020 – GLOBAL MARKET UPDATE: AMSTAT
BUSINESS JET & TURBOPROP After a minimal change year-over-year in transaction activity in the TRANSACTIONS months of January and February 2020, resale retail transaction activity in the Turboprops dropped 27% and 40% respectively year-over-year in March and April. Overall, transaction activity in After the Business Jet market saw improved performance year-over- the first four months of 2020 are down 19% versus the first four year in the months of January (+13%) and February (+23%) the market months of 2019. changed in March and April. In March 2020, resale retail transactions were down 23% compared to March 2019 and in April 2020 activity was down 40% compared to April 2019. Overall, transaction activity BUSINESS TURBOPROPS in the first four months of 2020 are down 10% versus the first four 2018 2019 2020 months of 2019. 200 BUSINESS JETS 150 -25% 2018 2019 2020 -40% 200 100
150 -25% 50
-40% 100 0 Jan Feb Mar Apr
50 For a full copy of the report go to: 0 Jan Feb Mar Apr https://www.amstatcorp.com/pages/PressReleases/AMSTAT_ Resale_Market_Update_June2020.pdf
About the AMSTAT Aircraft Valuation Tool
The AMSTAT Aircraft Valuation Tool (AVT) is fully integrated into the AMSTAT Premier service and calculates objective statistically generated serial number specific estimated values for business aircraft in seconds.
About AMSTAT, Inc.
AMSTAT is the leading provider of market research information and services to the corporate aviation industry. Founded in 1982, and based in Tinton Falls, NJ, AMSTAT introduced the concept of providing researched information to corporate aviation professionals. AMSTAT’s mission is to provide timely, accurate, and objective market information to its customers. AMSTAT products and services provide aviation market and statistical information that generates revenue and delivers competitive advantage to brokers/ dealers, finance companies, fractional providers, and suppliers of aircraft parts and services.
Information: Andrew Young, AMSTAT GM, 732-530-6400 x147, [email protected]
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 47 AIRCRAFT POSITIONING - BUSINESS JET AIRCRAFT ACQUISITION VS. MAX RANGE
24 23 22 CORP. AIRLINER 21 LONG RANGE 20 LARGE 19 MEDIUM 18 LIGHT 17 VERY LIGHT 16 ACJ321 BBJ3 BBJ2 15 ACJ320 14
13 ACJ319 BBJ G650ER 12 ACJ318 G650 11 GLOBAL 6000 G550 LINEAGE 1000E 10 F8X GLOBAL 5000 F7X 9
G500 8 F900LX
GLOBAL EXPRESS XRS 7 F2000LXS CL850 CL650 G450 6 F2000S LEGACY 650 GLOBAL EXPRESS G280 CL350 G-V G350 LEGACY 500 F900EX EASY 5 F2000LX LEGACY 600 CL605 CIT. X+ G-IVSP CIT. SOVEREIGN+ F2000DX G-IV F900EX G300 CIT. LATITUDE CL300 4 F2000 F2000EX LEGACY 450 CL604 F50EX CIT. X ANNUAL COST (MILLION USD/YEAR) TOTAL G200 H4000 CIT. XLS+ L75 CIT. SOVEREIGN 3 G150 H850XP H900XP
CIT. CJ4 L70 H800XP CIT. VII PHENOM 300 L45XR L60XR CIT. CJ3+ CIT. XLS CIT. EXCEL L40XR G100 ASTRA SP CIT. CJ2+ CIT. CJ3 CIT. ENCORE+ 2 CIT. M2 DIAMOND 1A CIT. ENCORE H800 CIT. ULTRA CIT. BRAVO CIT. CJ2 NEXTANT 400XTI H400XP CIT. CJ1+ CIT. CJ1 BEECHJET 400 PREMIER 1A HONDAJET PHENOM 100E CIT. MUSTANG
ECLIPSE 550
1 500 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 1,000 1,500 2,000
MAX RANGE (N.M.)
* The estimated total yearly cost is based on aircraft ownership cost for 10 years including financing, plus annual operating costs and regional adjustments.
Source: Conklin & de Decker 2019 48 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MARKET SUMMARY -- JETS
MARKET SUMMARY PER MODEL — BUSINESS JETS AIRBUS INVENTORY LEVEL, PRICE TREND & TRANSACTIONS ACJ318, ACJ319 & ACJ320
PERFORMANCE ACJ318 ACJ319 ACJ320 Max Range 4,253 N.M. /7,877 km 6,000 N.M. /11,112 km 5,250 N.M. /9,723 km Max Speed Mach 0.82 Mach 0.82 Mach 0.82 Typ. Passengers 19 19 19
SUPPLY 2020 Jun 2020 Mar 2020 Jun 2020 Mar 2020 Jun 2020 Mar No. for Sale 3 (15.8%) 3 (15.8%) 3 (4.3%) 4 (5.6%) 1 (5.6%) 1 (5.6%) Avg Asking Price 25.2M USD 25.2M USD 42.0M USD 43.0M USD 39.5M USD 39.5M USD Avg Days on Market 1,027 935 930 779 658 566
TRANSACTION 2020 Jun 2020 Mar 2020 Jun 2020 Mar 2020 Jun 2020 Mar Past 12 Months 1 1 2 1 0 0 Past 3 Months 0 0 1 0 0 0
Average Asking Price ACJ318 Market Indicators (vs. Last Quarter) ACJ319 ACJ318 ACJ320 Transaction Level (Past 12 Months) Average Inventory Level $50.8 Average Asking Price $47.1 $46.9 $45.5 $45.2 Average Days on Market $43.0 $42.0 $39.5 $39.5 $39.5 $39.5 $39.5 $39.5 ACJ319 $29.9 $30.3 Transaction Level (Past 12 Months) $26.0 $25.2 $23.2 $25.2 Inventory Level $25.0 $23.7 Average Asking Price
Average Days on Market For Sale vs. Sold
Sold For Sale 1 1 ACJ320 1 1 Transaction Level (Past 12 Months) 1 Inventory Level
Average Asking Price 8 7 10 11 11 12 12 11 11 11 10 10 10 11 11 10 9 9 8 8 8 8 8 7 7 Average Days on Market
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020 Source: AMSTAT & ASG
FEATURED AIRCRAFT BBJ 787-8 TOTAL HOURS: DELIVERY HOURS TOTAL CYCLES: DELIVERY CYCLES
• Interior Completed 2019 • Brand New Aircraft with Delivery Hours & Cycles Only • One of the Longest Ranged Business Jet - Capable of Flying 16 Hours Non-stop • 39 Passenger VVIP Configuration, with 2,415 square feet (224 square meters) Living Space including: a Master Suite, VIP Lounge, Dining Lounge, Business Class, Fwd & Aft Galley, Crew Rest Area and a gym. • Aero H+ Satcom w/ Ku-Band High Speed Internet • State-of-the-art avionics, including: New, Latest Generation FMC; SELCAL, ADS, FANS-1 & CPDLC; Dual Head-Up Displays; Weather Radar, TCAS & TAWS; Approved For GLS II Approaches
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 49 SIKORSKY BELL HELCIOPTERS BOEING
$59.0 $40.9 2018 MARKET SUMMARY --JETS 50 BBJ &BBJ2 Jun SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range 13 3 |ASIANSKY QUARTERLY — Sold FEATURED AIRCRAFT 13 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 13 1 For Sale
12 $58.0 $41.9
Oct 12 2
12 2 Dec 13 1 573 31.3M USD 4 (3.0%) 1 4 2020 Jun 2020 Jun 19 Mach 0.82 6,235 N.M./11,547km BBJ 12 SECOND QUARTER 2020 $90.0 $47.2 2019 Feb 11 1
11 1 3 2020 Mar 505 31.3M USD 6 (4.5%) 2020 Mar Apr 12 3 12 $43.8 $90.0 Jun 13
11 1 2020 Jun 2020 Jun 41 90.0M USD 1 (4.5%) 19 Mach 0.82 5,620 N.M./10,408km BBJ2 1 1 Aug 10 9 1 $90.0 $52.5 Oct 9
7 2020 Mar 2020 Mar 0 0 404 90.0M USD 2 (9.1%) Dec 7 $45.0 8 1 • • • • • • TOTAL CYCLES: 185SINCENEW TOTAL HOURS:450SINCENEW CHALLENGER 650SN6131 $90.0 ELT, CVR &FDR Satellite Communication System 2020 Avionics Ready:FANS 1A+,ADS-BOut,CPDLC &TCAS II7.1 Under OriginalOEMWarranty: 5Years Airframe &2Years Interior 11 Passengers &Belted LavConfiguration withFwdGalley Mint 2019Aircraft withVery Low Hours Since New 2020 Feb Average BBJ BBJ2
8 8 Apr 13 1 10 $90.0 $31.3 Jun 12 1 Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) BBJ2 BBJ Source: AMSTAT &ASG BOMBARDIER Source: AMSTAT & ASG AMSTAT Source: | 51 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET CL300 CL350 Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Market Indicators (vs. Last Quarter) SECOND QUARTER 2020 — QUARTER SECOND 1 40 Jun $14.2 $7.5 2 40 1 42 Apr 1 34 33
CL350 CL300 Average Feb 2020 Delivery Date: December 2016 December Date: Delivery & CAMP MSP, BBD Smart Parts Honeywell on Programs: Enrolled Fully Tracking 7.1 & ADS-C), & TCAS 1/A+ (CPDLC FANS Data High Speed Gogo Biz Cabin Wifi & Swift Broadband 2019 December 3C Inspection Completed: Still Under Warranty Aircraft New Owner Since Single $8.6 $14.9 • • • • • • • CHALLENGER 350 SN20649 527 SINCE NEW HOURS: TOTAL 199 SINCE NEW CYCLES: TOTAL 35 13 1 38 Dec 10 (3.2%) 14.9M USD 98 7 3 2020 Mar 2020 Mar 2 36
1 35 Oct $16.1 $10.0 5 37 3 35 Aug 8 1 CL350 /6,335 km 3,421 N.M. Mach 0.82 19 12 (3.5%) 14.9M USD 159 2020 Jun 2020 Jun 5 36
3 37 Jun $9.9 $16.2 2 36 4 28 Apr 2020 Mar 24 (5.3%) 8.0M USD 213 2020 Mar 25 13 2 23
5 24 Feb 2019 $16.3 $10.4 7 17 28 3 2020 Jun 2020 Jun CL300 /6,185 km 3,340 N.M. Mach 0.82 19 28 (6.2%) 7.5M USD 229 4 22 Dec 7 23
4 26 Oct
$9.1 $16.9 4
25 For Sale For 1 27 Aug Average Asking Price For Sale vs. Sold 8 25 FEATURED AIRCRAFT FEATURED Sold 2 23 Past 12 Months Past Past 3 Months Past Max Range Max Speed Passengers Typ. TRANSACTION PERFORMANCE No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Jun $7.5 CHALLENGER 300 & 350 300 CHALLENGER 2018 $17.4
BOMBARDIER
$12.4 CHALLENGER 604,605&650 2018 $5.3 MARKET SUMMARY --JETS 52 Jun SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range 35 4 |ASIANSKY QUARTERLY — Sold FEATURED AIRCRAFT 10 28 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 33 7 For Sale
28 7 $18.7 $5.3
Oct $9.2 25
9 32 8 Dec 34 4 273 4.7M USD 29 (8.1%) 4 31 2020 Jun 2020 Jun 9 Mach 0.82 4,027 N.M./7,458km CL604 11 35 SECOND QUARTER 2020 $12.5 $18.7 $5.0 2019 Feb 34 1
34 5 10 27 2020 Mar 274 4.8M USD 22 (6.1%) 2020 Mar Apr 37 6 43 1 $12.0 $18.2 $4.8 Jun 49 9
50 6 2020 Jun 2020 Jun 208 10.2M USD 31 (10.8%) 9 Mach 0.82 4,123 N.M./7,635km CL605 3 22 Aug 49 2 46 5 $10.8 $17.0 $5.0 Oct 46 7
46 7 2020 Mar 2020 Mar 10 19 165 10.2M USD 28 (9.7%) Dec 48 3 50 7 • • • • • • TOTAL CYCLES: 3,231SINCENEW TOTAL HOURS:5,338SINCENEW LEGACY 600SN14500644 $10.4 $17.5 $4.8 2020 Avionics Mandate Ready:ADS-BOut,CPDLC &TCAS 7.1 Dual SpectrumEMSSleds installed 2015 Airframe andAPUenrolled onEECEnhanced Engines enrolled onRRCC Medical Transport (1-2Patients) Convertible Configuration 13 Passengers VIP 2020 Feb Average CL604 CL605 CL650
52 6 56 2 221 17.0M USD 7 (6.8%) 10 Mach 0.82 4,123 N.M./7,635km CL650 1 2 2020 Jun 2020 Jun Apr 62 4 65 2 $10.2 $17.0 $4.7 Jun 67
2 0 1 2020 Mar 236 17.5M USD 6 (6.3%) 2020 Mar Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) CL650 CL605 CL604
Source: AMSTAT &ASG BOMBARDIER 11 (12.2%) 6.8M USD 446 2020 Mar 2020 Mar 6 2 Source: AMSTAT & ASG AMSTAT Source: 6,750 N.M. / 12,501 km Mach 0.87 18 14 (15.4%) 6.8M USD 431 2020 Jun 2020 Jun 8 2 | 53 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET
Market Indicators (vs. Last Quarter) Max Range Max Speed Passengers Typ. 12 Months Past 3 Months Past PERFORMANCE TRANSACTION No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average SECOND QUARTER 2020 — QUARTER SECOND 14 Jun $6.8 1 13 1 12 Apr 11 10 Feb 2020 $6.8 1 11 1 10 Dec 1 10 9 Oct $7.5 8 1 9 Aug 9 2 9 Jun $7.0 9 8 Apr 8 8 Feb 2019 $9.3 7 3 8 Dec 8 1 8 Oct $8.6 8 For Sale For 8 2 Aug Average Asking Price For Sale vs. Sold 1 10 Sold 1 12 Jun 2018 CHALLENGER 850 CHALLENGER $7.8 BOMBARDIER
$17.3 $18.2 $36.3 $8.2 GLOBAL EXPRESS, 5000,XRS&6000 2018 MARKET SUMMARY --JETS 54 Jun 48 SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range 7 |ASIANSKY QUARTERLY — Sold FEATURED AIRCRAFT 53 8 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 48 4 For Sale 51
5 $19.3 $35.8 $8.6
Oct 52 3
$18.7 56 3 Dec 55 3 314 18.6M USD 22 (9.5%) 3 16 2020 Jun 2020 Jun 13 Mach 0.82 5,350 N.M./9,908km GLOBAL 5000 59 7 SECOND QUARTER 2020 $20.0 $18.0 $32.7 $9.2 2019 Feb 60 1
69 5 326 16.5M USD 20 (8.7%) 2020 Mar 2020 Mar 3 13 Apr 74 3 68 5 $16.9 $32.0 $29.3 $8.7 Jun 63 5
65 4 Aug 64 242 8.0M USD 21 (14.5%) 2020 Jun 2020 Jun 3 18 13 Mach 0.82 6,125 N.M./11,343km GLOBAL EXPRESS 3 GL XRS GL EXPRESS 68 8 $30.0 $29.8 $17.5 $9.3 66 Oct 6
61 10 2020 Mar 2020 Mar 253 9.0M USD 18 (12.4%) 5 15 Dec 65 1 56 9 • • • • • • • • • • TOTAL CYCLES: 181SINCENEW TOTAL HOURS:596SINCENEW LEGACY 500SN55000072 $27.0 $15.8 $9.1 Weather Radar,TCAS 7.1,CVR, ELT, FDR ADS-B Out,FANS 1/A+,ATN-B1 CPDLC SVS, EVS&HUD RNP-1,2,4,5,10 Certification SATCOM, SwiftBroadband HighSpeedData andCabinWi-fi 10 Passenger Executive Configuration withFwdGalley Aircraft Enrolled onCAMP Engine &APUEnrolled onMSPGold Airframe Enrolled onEECE Very Low Hours &OneOwnerSince New 2020 Feb 61 Average GL5000 GL6000
5 $17.0 65 1 196 16.4M USD 15 (9.3%) 13 Mach 0.82 6,226 N.M./11,520km GLOBAL XRS 2020 Jun 2020 Jun 1 10 Apr 70 4 73 3 $16.4 $27.0 $18.6 $8.0 Jun 79 2
2020 Mar 2020 Mar 150 17.0M USD 14 (8.6%) 4 9 Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) GLOBAL XRS GLOBAL EXPRESS GLOBAL 5000 GLOBAL 6000
121 27.0M USD 21 (6.5%) 2020 Jun 2020 Jun 13 Mach 0.82 6,080 N.M./11,260km GLOBAL 6000 2 17
2020 Mar 2020 Mar 145 27.0M USD 13 (4.0%) 9 15 Source: AMSTAT &ASG
CESSNA Source: AMSTAT & ASG AMSTAT Source: | 55 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET Cit. CJ3 Cit. CJ4 Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Market Indicators (vs. Last Quarter) 1 SECOND QUARTER 2020 — QUARTER SECOND 81 Jun $5.5 $4.3 5 74 4 74 Apr 2 62 5 63 CJ4 CJ3 Average Feb 2020
5 Passenger Executive Configuration Executive 5 Passenger New Since Hours Low & CESCOM Advantage Power Program, on ProParts Enrolled 2020 Compliant Hangared Always 91 Ops Part FAA N-registered, 2019 December 36 Month Inspection completed $4.0 $6.2 • • • • • • • CITATION MUSTANG SN5100441 MUSTANG CITATION 793 SINCE NEW HOURS: TOTAL 609 SINCE NEW CYCLES: TOTAL 4 53 9 51 Dec 18 (5.8%) 6.3M USD 128 23 11 2020 Mar 2020 Mar 9 54
9 46 Oct $4.2 $6.2 43 10 6 44 Aug 26 3 Cit. CJ4 / 3,687 km 1,991 N.M. Mach 0.77 7 20 (6.3%) 5.5M USD 176 2020 Jun 2020 Jun 6 51
9 50 Jun $4.4 $6.3 3 54 4 46 Apr 2020 Mar 51 (9.0%) 4.0M USD 139 2020 Mar 9 9 6 45
3 37 Feb 2019 $4.1 $6.4 36 14 16 7 2020 Jun 2020 Jun Cit. CJ3 / 3,502 km 1,891 N.M. Mach 0.73 6 61 (10.7%) 4.3M USD 160 44 11 Dec 46 10 5
40 Oct
$4.3 $6.4 4 38
For Sale For 5 34 Aug Average Asking Price For Sale vs. Sold 4 32 FEATURED AIRCRAFT FEATURED CJ3 & CJ4 CJ3 ITATION Sold 3 29 Past 12 Months Past Past 3 Months Past Max Range Max Speed Passengers Typ. TRANSACTION PERFORMANCE No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Jun $3.7 C $6.1 2018
CESSNA 2018 2018 C $12.3 MARKET SUMMARY --JETS 56 C Jun Jun $7.8 21 4 |ASIANSKY QUARTERLY — ITATION ITATION Sold Sold 19 1 2 For Sale vs. Sold vs. Sale For For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Price Asking Average Aug Aug 12 1 2 For Sale For Sale 14 2 $12.3 Oct Oct $7.7 14 2 LATITUDE SOVEREIGN 19 2 Dec Dec 18 1 1 18 1 2 SECOND QUARTER 2020 $13.9 2019 2019 $7.7 Feb Feb 23 3 22 4 Apr Apr 24 4 22 5 $13.5 Jun Jun $7.9 22 5 22 5 Aug Aug 20 5 24 5 2 $13.6 $7.1 Oct Oct 19 7 1 24 6 1 Dec Dec 24 6 8 22 $13.0 2020 2020 $4.1 Feb Feb 2 7 25 3 27 5 5 Apr Apr 29 5 1 30 5 1 $12.0 $6.7 Jun Jun 32 6 Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) SUPPLY SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
0 6 2 10 2020 Jun 2020 Jun 165 12.0M USD (2.5%) 6 2020 Jun 164 6.7M USD (7.3%) 32 2020 Jun 9 Mach 0.80 2,870N.M. /5,315km 9 Mach 0.80 3,010N.M. /5,574km Source: AMSTAT &ASG 2 6 8 8 2020 Mar 2020 Mar 265 13.4M USD (2.2%) 5 2020 Mar 152 6.9M USD (6.2%) 27 2020 Mar DASSAULT
5 (6.5%) 21.0M USD 54 2 0 2020 Mar 2020 Mar
Source: AMSTAT & ASG AMSTAT Source: | 57 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET F900LX N.M. /8,800 km 4,750 Mach 0.83 12 4 2 4 (5.1%) 21.0M USD 120 2020 Jun 2020 Jun
F900DX F900EX F900EX EASy F900LX Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Market Indicators (vs. Last Quarter) 14 (11.7%) 14.6M USD 151 5 3 2020 Mar 2020 Mar
2 SECOND QUARTER 2020 — QUARTER SECOND 27 Jun $7.8 $11.8 $13.4 $21.0 2 28 1 31 7 2 14 (11.7%) 13.4M USD 217 2020 Jun 2020 Jun F900EX EASy /8,334 km 4,500 N.M. Mach 0.83 12 Apr 1 32 1
29 Feb F900EX F900DX Average 2020 14 Passenger Configuration with Forward Galley with Forward Configuration 14 Passenger on RRCC Engines Enrolled on MSP APU Enrolled Planeparts on Gulfstream Enrolled Airframe Compliant, EASA Validation FAA FM Immunity ADSB-Out, High Speed Data, TCAS7.1 CPDLC, FANS-1A, System Head Up Display / Visual Guidance Honeywell Annual Inspection Fresh 96 Month Inspection Completed $8.3 $12.6 $14.7 $21.0 • • • • • • • • • • G450 SN4202 2,604 SINCE NEW HOURS: TOTAL 953 SINCE NEW CYCLES: TOTAL 9 22 1 20 Dec 2020 Mar 2020 Mar 7 (5.9%) 7.8M USD 178 111 5 4 21
2 16 Oct $7.3 $13.6 $15.9 2 15 F900EX EASy F900LX 2 2020 Jun 2020 Jun 11 0 5 (4.2%) 7.8M USD 161 F900EX 4,500 N.M. /8,334 km 4,500 N.M. Mach 0.83 12 16 Aug 2 17
6 17 Jun $6.9 $12.9 $15.9 2 16 1 18 Apr 2020 Mar 6 (25.0%) 12.7M USD 134 6 4 2020 Mar 2 19
1 18 Feb 2019 $6.9 $12.0 $14.2 6 19 $27.9 3 7 1 2020 Jun 2020 Jun 4,100 N.M. /7,593 km 4,100 N.M. Mach 0.83 12 F900DX 4 (16.7%) 11.8M USD 206 18 Dec 5 17 2
24 Oct
$7.4 $13.1 $12.5 $18.5 2 22
For Sale For 3 23 Aug Average Asking Price For Sale vs. Sold 1 24 FEATURED AIRCRAFT FEATURED Sold 4 23 Past 12 Months Past Past 3 Months Past Max Range Max Speed Passengers Typ. TRANSACTION PERFORMANCE No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Jun $7.0 2018 FALCON 900DX/EX/EX EASy/LX 900DX/EX/EX FALCON $16.3 $12.5 $18.5 DASSAULT $27.9 $14.1 $16.5 2018 MARKET SUMMARY --JETS 58 FALCON 2000LX/LXS/S Jun SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range 2 7 |ASIANSKY QUARTERLY — Sold FEATURED AIRCRAFT 1 7 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 2 7 For Sale
2 8 $25.0 $16.5 $15.4
Oct
9 4 8 Dec 1 9 242 12.0M USD 8 (6.1%) 10 Mach 0.83 4,000 N.M./7,408km F2000LX 1 4 2020 Jun 2020 Jun 3 7 SECOND QUARTER 2020 $16.0 $25.0 2019 Feb 2 7
1 8 2 3 293 15.0M USD 6 (4.5%) 2020 Mar 2020 Mar Apr 11 1 $19.7 11 1 $16.0 $23.5 Jun 11 2
11 Aug 13 1 10 Mach 0.83 4,000 N.M./7,408km F2000LXS 277 21.8M USD 8 (8.2%) 0 4 2020 Jun 2020 Jun 12 1 $13.9 $22.3 $27.7 Oct 14
16 2 2 4 185 21.8M USD 8 (8.2%) 2020 Mar 2020 Mar Dec 16 1 16 2 • • • • • • • • TOTAL CYCLES: 1,168SINCENEW TOTAL HOURS:3,162SINCENEW G550 $27.7 $21.8 $14.5 No DamageorMaterial Corrosion BBML &HD-700 ADS-B Out,CPDLC &FANS 1/A+ Painting &Interior Refurbished2017 Beijing Based,allLogsinEnglish 4 Club,Conf. Area &AftDouble Divans 16 Pax, Forward Galley &Crew Rest Engines &APUEnrolled Pro-Rata JSSI 2020 Average F2000LX F2000LXS F2000S Feb 16 1
15 Apr 16 10 Mach 0.83 3,350 N.M./6,208km F2000S 2020 Jun 2020 Jun 257 27.7M USD 1 (2.3%) 0 1 1 16 $12.0 $21.8 $27.7 Jun 17
2020 Mar 2020 Mar 0 1 165 27.7M USD 1 (2.3%) Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) F2000S F2000LXS F2000LX
Source: AMSTAT &ASG DASSAULT 20 (7.0%) 23.3M USD 256 2020 Mar 2020 Mar 15 6 Source: AMSTAT & ASG AMSTAT Source: 5,950 N.M. / 11,018 km Mach 0.90 12 15 (5.2%) 24.5M USD 304 2020 Jun 2020 Jun 18 3 | 59 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET
Market Indicators (vs. Last Quarter) Max Range Max Speed Passengers Typ. 12 Months Past 3 Months Past PERFORMANCE TRANSACTION No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average SECOND QUARTER 2020 — QUARTER SECOND 20 Jun $24.5 1 22 2 20 Apr 20 2 1 22 Feb 2020 $23.3 1 20 2 15 Dec 3 14 1 18 Oct $24.4 2 19 1 17 Aug 1 16 2 16 Jun $21.2 3 17 5 17 Apr 2 18 1 15 Feb 2019 $23.0 2 15 4 12 Dec 9 2 4 11 Oct $20.9 4 14 For Sale For 2 16 Aug Average Asking Price For Sale vs. Sold 6 18 Sold 2 17 Jun FALCON 7X FALCON 2018 $21.7 EMBRAER $9.5 2018 2018 $6.9 MARKET SUMMARY --JETS 60 LEGACY 600/650 PHENOM 300 $7.3 Jun Jun 19 4 21 3 |ASIANSKY QUARTERLY — Sold Sold 16 2 20 3 For Sale vs. Sold vs. Sale For For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Average Asking Price Asking Average Aug Aug 17 3 24 For Sale For Sale 10 6 24 $11.7 $8.0 $8.1 Oct Oct 13 1 21 2 15 2 22 3 Dec Dec 16 2 22 1 16 8 21 7 SECOND QUARTER 2020 $13.7 $7.5 2019 2019 $6.9 Feb Feb 18 1 21 18 2 25 Apr Apr 19 23 18 3 21 1 $15.1 $6.8 $6.7 Jun Jun 19 2 22 4 19 2 24 3 Aug Aug 20 4 21 3 21 5 21 2 $15.1 $7.0 $5.1 Oct Oct 20 3 22 2 20 3 21 1 Dec Dec 20 2 25 3 20 3 23 2 $15.0 $6.8 2020 2020 $5.3 Feb Feb L650 Average L600 25 1 19 3 26 1 12 2 Apr Apr 33 0 24 1 35 2 21 1 $15.0 $7.9 $6.8 Jun Jun 36 1 19 2 Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Transaction Level Average DaysonMarket Average AskingPrice Inventory Level SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
(Past 12Months) 3 29 2020 Jun 274 6.8M USD (6.5%) 36 2020 Jun 5 Mach 0.78 1,242 N.M./2,300km 4 |8 21 |17 Jun |Mar 286 |289 9.2M USD 7.9M USD 13 |18 Jun |Mar 13 Mach 0.80 6,297 km 3,400 N.M. L600 Source: AMSTAT &ASG L600 9 26 2020 Mar 269 6.6M USD (5.2%) 28 2020 Mar 0 |5 7 | Jun |Mar 13 Mach 0.80 7,112 km 3,640 N.M. L650 211 |186 15.0M USD 15.0M USD 6 |4 Jun |Mar L650 MARKET SUMMARY -- JETS
LINEAGE 1000/E
Average Asking Price Market Indicators (vs. Last Quarter)
Transaction Level (Past 12 Months) Inventory Level $23.5 Average Asking Price $22.2 $21.4 Average Days on Market $22.2 $20.2
$18.3 $19.1 PERFORMANCE Max Range 4,400 N.M. / 8,149 km Max Speed Mach 0.82 For Sale vs. Sold Typ. Passengers 19
Sold For Sale SUPPLY 2020 Jun 2020 Mar No. for Sale 5 (17.2%) 6 (20.7%) 1 Avg Asking Price 18.3M USD 19.1M USD 1 1 Avg Days on Market 525 450
TRANSACTION 2020 Jun 2020 Mar 5 5 6 6 7 7 7 8 9 9 9 9 9 9 8 8 9 10 10 7 6 6 6 5 5 Past 12 Months 2 2 Past 3 Months 0 1
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020
Source: AMSTAT & ASG EMBRAER
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 61 GULFSTREAM $18.3 2018 2018 $4.1 G200 MARKET SUMMARY --JETS 62 G280 Jun Jun 24 3 1 2 |ASIANSKY QUARTERLY — Sold Sold 20 3 3 For Sale vs. Sold vs. Sale For Sold vs. Sale For Average Asking Price Asking Average Price Asking Average Aug Aug 17 3 3 For Sale For Sale 17 6 3 $18.3 $4.4 Oct Oct 21 2 2 1 26 2 2 Dec Dec 27 2 4 23 4 3 4 SECOND QUARTER 2020 $17.3 $4.6 2019 2019 Feb Feb 20 4 4 21 1 4 Apr Apr 25 1 4 27 4 4 $14.7 $4.3 Jun Jun 27 2 7 27 2 9 Aug Aug 28 4 8 28 1 9 $15.7 $4.1 Oct Oct 10 25 1 3 12 27 1 1 Dec Dec 24 11 3 22 8 1 9 $4.0 $13.3 2020 2020 Feb Feb 22 12 2 21 13 Apr Apr 22 14 22 15 $13.2 $4.1 Jun Jun 21 15 1 Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) SUPPLY SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Market Indicators (vs. Last Quarter) Last (vs. Indicators Market Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
1 26 0 3 2020 Jun 2020 Jun 196 4.1M USD (12.9%) 31 2020 Jun 196 13.2M USD (7.8%) 15 2020 Jun 8 Mach 0.81 3,050 N.M./5,651km 8 Mach 0.84 3,600 N.M./6,667km Source: AMSTAT &ASG 14 25 1 3 2020 Mar 2020 Mar 226 4.2M USD (8.8%) 21 137 12.5M USD (7.0%) 13 2020 Mar 2020 Mar GULFSTREAM 39 (6.6%) 20.3M USD 169 31 (8.8%) 13.7M USD 299 2020 Mar 2020 Mar 2020 Mar 2020 Mar 35 15 20 4 Source: AMSTAT & ASG AMSTAT Source: 6,750 N.M. / 12,501 km Mach 0.87 18 4,350 N.M. / 8,056 km Mach 0.85 13 48 (8.1%) 17.7M USD 203 31 (8.8%) 12.4M USD 343 2020 Jun 2020 Jun 2020 Jun 2020 Jun 39 4 24 4 | 63 ASIAN SKY QUARTERLY MARKET SUMMARY -- JETS SUMMARY MARKET
Market Indicators (vs. Last Quarter) Market Indicators (vs. Last Quarter) Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. Max Range Max Speed Passengers Typ. 12 Months Past 3 Months Past TRANSACTION PERFORMANCE PERFORMANCE TRANSACTION No. for Sale No. for No. for Sale No. for Asking Price Avg Days on Market Avg Asking Price Avg Days on Market Avg SUPPLY SUPPLY Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average SECOND QUARTER 2020 — QUARTER SECOND 1 23 48 Jun Jun $17.7 $12.4 4 3 20 49 20 45 Apr Apr 1 1 39 31 2 36 29 Feb Feb 2020 2020 $20.2 $14.1 8 2 32 25 2 1 33 29 Dec Dec 5 2 33 28 2 4 31 Oct Oct 21 $22.7 $15.2 2 5 32 23 3 3 31 23 Aug Aug 2 24 23 3 1 19 21 Jun Jun $22.0 $16.4 2 3 18 22 4 4 18 25 Apr Apr 3 2 27 22 3 6 26 17 Feb Feb 2019 2019 $25.2 $15.8 5 5 27 18 1 5 28 18 Dec Dec 3 5 27 20 4 4 24 Oct Oct 20 $28.1 $16.8 3 4 26 24 For Sale For For Sale For 5 27 23 Aug Aug Average Asking Price Average Asking Price For Sale vs. Sold For Sale vs. Sold 3 2 24 20 Sold Sold 3 3 29 20 Jun Jun G550 G450 2018 2018 $25.7 $15.1 GULFSTREAM $62.4 $56.2 2018 G650 &ER MARKET SUMMARY --JETS 64 Jun 16 2 |ASIANSKY QUARTERLY — Sold 13 2 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 11 3 For Sale 15 2 $51.7 $53.1 Oct 18 1 14 1 Dec 12 3 12 3 SECOND QUARTER 2020 $52.0 $61.9 2019 Feb 4 9 10 2 Apr 15 16 1 $48.0 Jun $50.6 15 1 16 Aug 16 1 16 1 $44.8 $51.6 Oct 17 15 1 Dec 17 1 14 3 $49.7 $44.0 2020 Feb G650ER Average G650 14 13 1 Apr 16 1 15 $44.4 $39.4 Jun 16 1 Transaction Level Average DaysonMarket Average AskingPrice Inventory Level SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Typ. Passengers Max Speed Max Range Past 3Months Past 12Months Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
(Past 12Months) 1 |4 6 |5 Jun |Mar 157 |164 43.2M USD 39.4M USD 5 | Jun |Mar 18 Mach 0.90 12,964 km 7,000 N.M. G650 Source: AMSTAT &ASG G650 1 |2 5 |4 Jun |Mar 18 Mach 0.90 13,890 km 7,500 N.M. G650ER 214 |194 49.7M USD 46.6M USD 11 |8 Jun |Mar G650ER AIRCRAFT POSITIONING - CIVIL HELICOPTERS ACQUISITION COST VS. MAX RANGE 6 HEAVY (SUPER) MEDIUM H225 S-92 5 LIGHT TWIN SINGLE TURBINE PISTON H215(C1) 4 H175 AW189 S-76D 3 H155 AW139 BELL 412EPI S-76C++ H135(T3) H145 BELL 430 AW169 2 MD902 BELL 429 AW109 GRANDNEW AW109 POWER BELL 206L4 BELL 407GXP H125 MD530F H130 AW119KX MD600N AIRCRAFT ACQUISITION PRICE (MILLION USD) AIRCRAFT ACQUISITION 1 MD502N H120 MD550E R66 BELL 505 R22 BETA II R44 RAVEN II EN480B BELL 407 0 100 200 300 400 500 600 700 MAXIMUM RANGE (N.M) ACQUISITION COST VS. MAX TAKEOFF WEIGHT 8 HEAVY (SUPER) MEDIUM H225 S-92 LIGHT TWIN H215(C1) 4 SINGLE TURBINE H155 PISTON H145 S-76D AW189 AW169 H175 AW139 2 MD 902 BELL 412EPI BELL 429 S-76C++ H135(T3) BELL 430 AW109 POWER AW109 GRANDNEW MD520N H120 BELL 407GXP MD530F AW119KX 1 H130 MD500E H125 BELL 407 BELL 206L4 EN480B MD 600N R66 BELL 505
0.5 AIRCRAFT ACQUISITION PRICE (MILLION USD) AIRCRAFT ACQUISITION R44 RAVEN II R22 BETA II 0.25 1000 2000 4000 8000 16000 32000 MAX TAKE-OFF WEIGHT (LBS) ACQUISITION COST VS. CABIN VOLUME 8 H225 HEAVY (SUPER) MEDIUM LIGHT TWIN H215(C1) S-92 4 SINGLE TURBINE H175 S-76D H155 AW189 PISTON BELL430 AW139 H145 AW169 BELL412EPI 2 MD 902 S-76C++ H135(T3) BELL429 AW109 GRANDNEW H125 BELL 407GXP AW109 POWER MD 520N AW119KX H130 MD 600N 1 MD 530F H120 BELL 407 EN480B MD 500E BELL 206L4 R66 BELL 505
0.5
AIRCRAFT ACQUISITION PRICE (MILLION USD) AIRCRAFT ACQUISITION R44 RAVEN II R22 BETA II 0.25 20 40 80 160 320 640 800 CABIN VOLUMN (CU.FT)
Source: Conklin & de Decker 2019 SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 65 MARKETMARKET SUMMARY -- HELICOPTERSSUMMARY PER MODEL — CIVIL HELICOPTERS INVENTORY LEVEL, PRICE TREND & TRANSACTIONS H125
Average Asking Price Market Indicators (vs. Last Quarter)
Transaction Level (Past 12 Months) $2.5 Inventory Level Average Asking Price $2.5 $2.4 $2.4 Average Days on Market
$2.4 $2.4 $2.4 PERFORMANCE Max Range 340 N.M. / 630 km Max Speed 140 Knots For Sale vs. Sold Typ. Passengers 6
Sold For Sale SUPPLY 2020 Jun 2020 Mar 4 4 8 No. for Sale 26 (3.1%) 26 (3.2%) 1 3 2 1 2 3 Avg Asking Price 2.4M USD 2.4M USD 1 2 2 3 2 1 1 Avg Days on Market 530 492 4 3 1
2020 Jun 2020 Mar 18 17 18 21 23 23 23 25 26 31 32 33 29 27 29 25 26 27 25 27 26 26 24 26 26 TRANSACTION Past 12 Months 20 14 Past 3 Months 6 6
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020
H130
Average Asking Price Market Indicators (vs. Last Quarter)
$3.0 Transaction Level (Past 12 Months) $3.0 $3.0 Inventory Level
AIRBUS Average Asking Price $2.9 $3.0 Average Days on Market $2.9 $2.7 PERFORMANCE Max Range 333 N.M. / 606km Max Speed 128 Knots For Sale vs. Sold Typ. Passengers 7
Sold For Sale 2 1 1 1 1 SUPPLY 2020 Jun 2020 Mar No. for Sale 11 (3.9%) 7 (2.6%) 2 2 Avg Asking Price 2.7M USD 3.1M USD 2 2 1 1 Avg Days on Market 231 321
TRANSACTION 2020 Jun 2020 Mar 6 5 5 5 5 5 4 4 9 10 10 9 10 11 10 10 11 9 9 9 9 7 8 11 11 Past 12 Months 6 5 Past 3 Months 1 2
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020
Source: AMSTAT & ASG
66 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 MARKET SUMMARY -- HELICOPTERS
EC135P2 & T2
Average Asking Price EC135T2 Market Indicators (vs. Last Quarter) EC135P2 EC135P2 EC135T2 Average Transaction Level (Past 12 Months) $3.1 Inventory Level $2.8 Average Asking Price $2.6 $2.6 Average Days on Market $2.4 $2.2 $2.2 $1.8 $2.1 $1.7 $1.7 $1.7 PERFORMANCE EC135P2 EC135T2 $1.6 Max Range 332 N.M. 332 N.M. 614 km 614 km For Sale vs. Sold Max Speed 127 Knots 127 Knots Typ. Passengers 6 6 Sold For Sale 5 2 SUPPLY Jun | Mar Jun | Mar 1 No. for Sale 7 | 8 1 | 1 1 1 1 Avg Asking Price 2.2M USD 1.7M USD 1 1 1 1 2.2M USD 1.7M USD Avg Days on Market 595 | 484 116 | 24
11 11 12 12 12 11 9 9 10 10 11 12 12 11 11 11 11 10 11 10 8 9 9 8 8 TRANSACTION Jun | Mar Jun | Mar Past 12 Months 2 | 1 2 | 1 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Past 3 Months 1 | 0 1 | 0 2018 2019 2020
EC145
Average Asking Price Market Indicators (vs. Last Quarter)
$5.1 Transaction Level (Past 12 Months) AIRBUS Inventory Level $4.5 Average Asking Price Average Days on Market
$4.3
$3.6 $3.6 $3.9 PERFORMANCE Max Range 461 N.M. / 855 km Max Speed 131 Knots $3.4 For Sale vs. Sold Typ. Passengers 9
Sold For Sale SUPPLY 2020 Jun 2020 Mar No. for Sale 10 (1.4%) 9 (1.3%) 1 1 2 2 1 Avg Asking Price 3.9M USD 4.3M USD 3 4 3 3 Avg Days on Market 440 410 2 1 2 1
2020 Jun 2020 Mar 9 11 13 15 14 14 12 13 13 13 13 12 9 9 8 10 12 10 9 9 9 9 9 10 10 TRANSACTION Past 12 Months 16 13 Past 3 Months 3 5
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020
Source: AMSTAT & ASG
SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 67 MARKET SUMMARY -- HELICOPTERS
H155 & EC155B
Average Asking Price EC155B Market Indicators (vs. Last Quarter)
H155 H155 EC155B Average Transaction Level (Past 12 Months) $5.9 Inventory Level $5.1 $4.9 Average Asking Price $4.5 Average Days on Market $3.9 $3.9 $4.5
$2.9 $2.6 PERFORMANCE H155 EC155B $2.4 $2.0 $2.0 $2.0 $2.0 Max Range 516 N.M. 516 N.M. 955 km 955 km For Sale vs. Sold Max Speed 150 Knots 135 Knots Typ. Passengers 13 13 Sold For Sale
SUPPLY Jun | Mar Jun | Mar 1 1 No. for Sale 13 | 12 3 | 4 1 Avg Asking Price 3.9M USD 2.6M USD 1 3.9M USD 2.9M USD Avg Days on Market 644 | 650 390 | 491
15 15 15 15 13 13 13 12 12 12 11 10 11 11 15 23 20 18 17 18 16 16 16 16 16 TRANSACTION Jun | Mar Jun | Mar Past 12 Months 0 | 0 2 | 1 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Past 3 Months 0 | 0 1 | 1 2018 2019 2020
H225
Average Asking Price Market Indicators (vs. Last Quarter)
Transaction Level (Past 12 Months) $7.0 $7.0 Inventory Level $6.2 $6.2
AIRBUS Average Asking Price $5.8 Average Days on Market $6.0
$4.0 PERFORMANCE Max Range 452 N.M. / 837 km Max Speed 142 Knots For Sale vs. Sold Typ. Passengers 19
Sold For Sale SUPPLY 2020 Jun 2020 Mar No. for Sale 9 (5.1%) 9 (5.1%) Avg Asking Price 6.2M USD 6.2M USD Avg Days on Market 701 1,094
2020 Jun 2020 Mar 13 13 14 13 13 17 17 16 13 13 13 13 13 13 13 13 12 12 11 11 9 9 11 10 9 TRANSACTION Past 12 Months 0 0 Past 3 Months 0 0
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2018 2019 2020
Source: AMSTAT & ASG
68 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 BELL Bell 206L Bell 206L 270 N.M. 500 km 105 Knots 6 Jun | Mar 82 | 79 0.8M USD 0.9M USD 403 | 440 Jun | Mar 4 | 2 2 | 2 2020 Mar 46 (2.9%) 2.3M USD 519 2020 Mar 40 16 Bell 206J Source: AMSTAT & ASG AMSTAT Source: 323 N.M. / 598 km 132 Knots 7 2020 Jun 52 (3.3%) 2.3M USD 506 2020 Jun 49 9 Bell 206J 374 N.M. 693 km 121 Knots 4 Jun | Mar 125 | 132 0.5M USD 0.5M USD 789 | 737 Jun | Mar 29 | 14 15 | 14 | 69 ASIAN SKY QUARTERLY
(Past 12 Months) (Past
MARKET SUMMARY -- HELICOPTERS SUMMARY MARKET Market Indicators (vs. Last Quarter) Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. TRANSACTION PERFORMANCE No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Market Indicators (vs. Last Quarter) Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. PERFORMANCE TRANSACTION No. for Sale No. for Avg Asking Price Avg Days on Market Avg SUPPLY Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Inventory Level Inventory Asking Price Average Days on Market Average Transaction Level Transaction SECOND QUARTER 2020 — QUARTER SECOND 52 207 Jun Jun $2.5 $0.5 $0.8 4 6 49 208 3 13 49 208 Apr Apr 3 46 9 211 5 7 46 Feb Feb 216 2020 2020 $2.2 $0.9 $0.5 4 Average Bell 206 LongRanger Bell 206 JetRanger 51 207 2 53 Dec Dec 201 5 49 193 3 44 Oct Oct 206 $0.6 $2.3 $0.8 3 43 208 7 39 Aug Aug 210 4 44 211 5 43 Jun Jun 213 $0.5 $1.9 $0.9 5 41 215 5 38 Apr Apr 208 1 41 201 3 48 Feb Feb 209 $0.9 $2.0 2019 2019 $0.6 48 10 205 6 48 215 Dec Dec 5 47 211 5 46 Oct Oct 201 $0.6 $0.9 $1.9 4 44 201 For Sale For For Sale For 5 42 195 Aug Aug Average Asking Price Average Asking Price For Sale vs. Sold For Sale vs. Sold 8 42 205 Sold Sold 6 42 Jun Jun 206 $1.9 $0.6 $0.9 BELL 407 JETRANGER / LONGRANGER 206 JETRANGER BELL 2018 2018 BELL 2018 2018 BELL 429 BELL 412EP/412HP MARKET SUMMARY --HELICOPTERS 70 2018 $3.0 $4.3 $5.4 Jun Jun Mar 14 32 1 2 |ASIANSKY QUARTERLY — Sold Sold 13 34 1 1 For Sale vs. Sold vs. Sale For Sold vs. Sale For Average Asking Price Asking Average Price Asking Average Aug Aug May 14 37 2 For Sale For Sale 14 37 1 $4.8 $2.8 $5.6 Oct Oct Jul 14 38 15 38 3 Dec Dec Sep 16 36 1 15 38 2 SECOND QUARTER 2020 2019 2019 $4.6 $3.0 $5.6 Feb Feb Nov 16 35 1 2 15 36 1 2019 Apr Apr Jan 17 34 1 1 20 33 1 2 $4.2 $2.0 $5.0 Jun Jun Mar 21 31 2 3 20 28 1 5 Aug Aug May 21 27 1 2 21 27 1 1 $3.7 $2.0 $4.8 Oct Oct Jul 24 26 1 3 24 26 Dec Dec Sep 21 26 1 20 27 3 1 $3.3 $4.5 $2.0 2020 2020 Feb Feb Bell 412HP Average Bell 412EP Nov 17 25 4 1 14 27 2 1 Apr Apr Jan 14 23 15 23 3 $4.0 $2.1 $4.1 Jun Jun Mar 16 23 1 Transaction Level Average DaysonMarket Average AskingPrice Inventory Level Average DaysonMarket Average AskingPrice Inventory Level Transaction Level (Past 12Months) SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Typ. Passengers Max Speed Max Range Past 3Months Past 12Months Market Indicators (vs. Last Quarter) Last (vs. Indicators Market SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Past 3Months Past 12Months Typ. Passengers Max Speed Max Range Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
(Past 12Months)
3 |7 20 |17 Jun |Mar Jun |Mar 591 |682 4.4M USD 5.6M USD 21 |24 9 140 Knots 659 km 356 N.M./ Bell 412EP 0 14 2020 Jun 263 4.1M USD (4.4%) 16 2020 Jun 7 130 Knots 368 N.M./681km Source: AMSTAT &ASG Bell 412EP 1 |0 2 |1 Jun |Mar 14 133 Knots 646 km 349 N.M./ Bell 412HP Jun |Mar 673 |1,055 2.0M USD 2.1M USD 2 |3 9 14 2020 Mar 378 4.4M USD (3.9%) 14 2020 Mar Bell 412HP LEONARDO 2020 Mar 23 (2.4%) 6.0M USD 509 2020 Mar 21 13 2020 Mar 12 (6.5%) 4.3M USD 235 2020 Mar 5 4 Source: AMSTAT & ASG AMSTAT Source: 568 N.M. / 1,052 km 140 Knots 15 2020 Jun 23 (2.4%) 5.7M USD 552 2020 Jun 22 1 480 N.M. / 889 km 130 Knots 7 2020 Jun 17 (9.0%) 4.4M USD 216 2020 Jun 6 1 | 71 ASIAN SKY QUARTERLY
MARKET SUMMARY -- HELICOPTERS -- HELICOPTERS SUMMARY SUMMARY MARKET MARKET Market Indicators (vs. Last Quarter) Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. TRANSACTION PERFORMANCE Market Indicators (vs. Last Quarter) No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Max Range Max Speed Passengers Typ. 12 Months Past 3 Months Past PERFORMANCE TRANSACTION No. for Sale No. for Asking Price Avg Days on Market Avg SUPPLY Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average Transaction Level (Past 12 Months) (Past Level Transaction Level Inventory Asking Price Average Days on Market Average 17 SECOND QUARTER 2020 — QUARTER SECOND 23 Jun Jun $5.7 $4.4 1 17 1 24 15 24 Apr Apr 1 12 6 23 2 11 24 Feb Feb 2020 2020 $6.3 $4.3 9 1 4 22 1 1 10 23 Dec Dec 1 10 23 3 12 22 Oct Oct $6.6 $4.5 8 1 22 9 4 23 Aug Aug 8 26 2 8 3 23 Jun Jun $7.5 $4.2 8 2 23 1 7 1 26 Apr Apr 2 7 1 27 2 9 3 26 Feb Feb $7.5 2019 2019 $4.7 8 26 2 8 1 24 Dec Dec 2 9 1 25 10 28 Oct Oct $7.7 $4.7 9 28 For Sale For For Sale For 1 8 27 Aug Aug Average Asking Price Average Asking Price For Sale vs. Sold For Sale vs. Sold 1 8 2 28 Sold Sold 1 6 28 AW139 Jun Jun $7.5 AW109SP GRANDNEW AW109SP $6.2 2018 2018 SIKORSKY 2018 MARKET SUMMARY --HELICOPTERS 72 $2.1 $6.7 S-76C+ /S-76C++ Jun 54 2 |ASIANSKY QUARTERLY — Sold FEATURED AIRCRAFT 51 1 For Sale vs. Sold vs. Sale For Average Asking Price Asking Average Aug 49 2 For Sale 47 $5.8 $1.9 Oct 48 1 46 Dec 46 42 1 SECOND QUARTER 2020 2019 $5.6 $2.0 Feb 46 47 1 Apr 42 1 45 $4.9 $1.9 Jun 41 1 41 1 Aug 45 45 $4.7 $1.7 Oct 44 45 Dec 45 1 44 1 TOTAL HOURS:7,688HOURS BELL 205A1SN30109 • • • • • • • • • • TOTAL CYCLES: 7,604CYCLES TOTAL HOURS:2,632HOURS BELL 412EPSN36442 • • • • • • • • • • $1.7 $4.8 Auxiliary Fuel Tank Litter Kit Emergency Floats Cargo HookProvisions AFCS Hoist Available Separately Emergency Floats andExternal Mounted Life Rafts ADS-B Fitted Aircraft Enrolled onPratt Eagle Service GoldandtheBellCAP 13+2 SeatsConfiguration K-flex MainDriveshaft AKV N1/N2Cycle Counter Dart Interior Protector Kit Dart ShoulderHarness Kit Dart DoorModification Kit Dart HeliAccess Handle Onboard System Cargo Hook withLoadCell Dart DualMirror Skylight Window 13 Passengers UtiltyConfiguration 2020 Feb S76C+ Average S76C++ 41 40 Apr 43 43 $4.4 $1.7 Jun 44 Transaction Level Average DaysonMarket Average AskingPrice Inventory Level SUPPLY Avg DaysonMarket Avg AskingPrice No. for Sale TRANSACTION PERFORMANCE Typ. Passengers Max Speed Max Range Past 3Months Past 12Months Market Indicators (vs. Last Quarter) Last (vs. Indicators Market
(Past 12Months) 0 | 0 | Jun |Mar Jun |Mar 723 |695 1.7M USD 1.7M USD 22 |20 12 155 Knots 620 km 335 N.M./ S-76C+ Source: AMSTAT &ASG S76C+ 0 |2 3 | Jun |Mar 12 155 Knots 620 km 335 N.M./ S-76C++ Jun |Mar 652 |780 4.8M USD 4.4M USD 22 |20 S76C++ Join AsBAA in 2020 Curated Networking, Brand Profiling, Advice, Opportunities
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