Pre-Owned Market Asia-Pacific Outlook Corporate Airliners Past, Present & Future Metrics & Mood Upcoming Aircraft Bombardier Global 5500 / 6500 / 7500
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ASIAN SKY QUARTERLY THIRD QUARTER 2018 PRE-OWNED MARKET ASIA-PACIFIC OUTLOOK CORPORATE AIRLINERS PAST, PRESENT & FUTURE METRICS & MOOD UPCOMING AIRCRAFT BOMBARDIER GLOBAL 5500 / 6500 / 7500 COUNTRY PROFILE INTERVIEWS GREATER CHINA MICHAEL HUI CONSULTING MANAGER MARKET SUMMARIES ASIAN SKY GROUP JETS & HELICOPTERS SPECIAL FEATURES • ASG'S TRAINING REPORT: EXCLUSIVE PREVIEW THIRD QUARTER 2018 • US-CHINA RELATIONS RELY ON. F LY WE MAKE IT The new generation H160 boasts a range of unparalleled safety features. Maximized pilot visibility, intuitive information display, unrivalled pilot assistance with Helionix®, and unmatched ight envelope protection. What’s more, it carries up to 12 passengers with a radius of action of 120 NM, while burning 15% less fuel. With so many impressive features, the H160 is a huge step forward not just for its category, but for the environment, too. Safety. We make it y. 14043_AIR_H160_Helicopter_297x210_AsianSky_1.1.indd 1 12/09/2017 10:05 PUBLISHER’S NOTE The third quarter of 2018 saw a dramatic change from just two years before. In Q2 2016 the market had an abundance of inventory — with a worldwide inventory value of roughly US$7.8 billion. Two years later, the inventory value has been reduced significantly, reaching a worldwide value of US$5.8 billion. Back then, buyers had ample supply at much lower prices. Today’s market has much less supply at higher prices, making it harder for buyers to find that ideal business jet. One of the driving forces leading the market from a Buyer’s Market toward a Seller’s Market is Gulfstream and its fleet of pre-owned aircraft. Gulfstream’s G200 saw 41 transactions in the past 12 months. The G550 had 39 transactions and the G650/650ER had 23 transactions RELY ON. in the past 12 months. A few other indicators are the low number of days on market (DOM) and the overall supply vs. demand ratio; both of which are lower than most aircraft on the market. Notably, Bombardier’s Challenger 600 series and Global series have also followed a similar trend. These models are all relatively ‘easy’ to sell, more attractive to buyers and they have a higher inventory available for sale. Because those aircraft are selling much quicker than most, pricing has increased for those still on the market. Overall, this has made for a less active market, with fewer transactions. Of course, as we saw in ASG’s quarterly Market Survey in the ‘Mood & Intentions’ section, economic confidence is down. Optimism plateaued in Q1 and pessimistic feelings toward the economy have raised As for the rest of Asian Sky Quarterly, this issue features a look at drastically; the biggest decline in economic confidence since the start Bombardier’s Global series — the 5500, 6500 and 7500. We also of the Market Survey. We’re seeing these feelings across the region, but examine the pre-owed corporate airliner market — including data on these are most prominent in Greater China. BBJs, the ACJ series, Bombardier’s Challenger 850 and Embraer’s F LY Lineage 1000. China is very much in the minds of the industry; thus, The obvious finger to point here is at the US-China trade war, which, as a we’ve profiled business aviation in Greater China this quarter. One of WE MAKE IT Special Feature for this issue of Asian Sky Quarterly, I explain in further ASG’s newest additions is Michael Hui, Consulting Manager and he has detail on Page 18, offering what I hope to be a look into this complex shared his insight on the growing consulting division with the company. The new generation H160 boasts a range situation between two global powerhouses. You’ll also get a glimpse of ASG’s latest report, an update to the inagural of unparalleled safety features. Maximized Asia Pacific Training School Report, highlighting the need for training The helicopter segment is, as always, more complex. There remains an schools in light of the growing pilot shortage. pilot visibility, intuitive information display, oversupply of inventory, yet average asking prices are dropping. This ® unrivalled pilot assistance with Helionix , is likely a result of owners coming to terms with unrealistic prices, as As with every issue of Asian Sky Quarterly, I hope you find this edition and unmatched ight envelope protection. average DOM are increasing. Once again, the market is going through to be a useful resource, particularly when making aircraft buying and What’s more, it carries up to 12 passengers changes. The best example of this is the S-76 C++, used for offshore oil selling decisions. and gas operations. In Q3 2017, the average asking prices was US$7.3M. with a radius of action of 120 NM, while One year later the price is US$5.4M. DOM have increased significantly burning 15% less fuel. With so many from just the previous quarter; rising from 555 in Q2 to 641 this quarter. impressive features, the H160 is a huge This is the epitome of a Buyer’s Market with no significant indicators to step forward not just for its category, but when this will turn around. for the environment, too. Another example of the changing market is the AW139, which Safety. We make it y. showcases a different story. Operators of this aircraft are gradually Sincerely, changing its mission type from offshore use to EMS and VIP use. These Jeffrey C. Lowe mission segments, along with SAR and law enforcement, are more in Managing Director, Asian Sky Group demand. Consequently, inventory level for this aircraft is reducing and average asking price is rising. SPECIAL THANKS TO OUR CONTRIBUTORS: THIRD QUARTER 2018 — ASIAN SKY QUARTERLY | 1 14043_AIR_H160_Helicopter_297x210_AsianSky_1.1.indd 1 12/09/2017 10:05 CONTENTS 04 ECONOMICS 34 MARKET DYNAMICS Overview of the Asia-Pacific region’s current status and An in-depth analysis of inventory levels, market trends specific country’s GDP versus their business jet fleet size. and the changing price signals for the business jet and helicopter fleets in the Asia-Pacific region, given the continual fluctuations in supply and demand. 08 MOOD & INTENTIONS Results of the survey on the Asia-Pacific region’s outlook on current economic status, aircraft utilization, purchase 42 INTERVIEW: intentions and influencing factors. MICHAEL HUI, CONSULTING MANAGER; ASG Discussing his insight in providing consultancy to the commercial aviation sector and how this will translate to 14 SPECIAL FEATURE: TRAINING REPORT working in general aviation. PILOT DEMAND & SPECIAL MISSIONS TRAINING A sneak peek at what’s to come in ASG’s upcoming Asia Pacific Training Report. 45 UPCOMING SPOTLIGHT BOMBARDIER GLOBAL SERIES An introduction to the Global series — Global 5500, Global 18 SPECIAL FEATURE: US-CHINA RELATIONS 6500 and Global 7500, with a complete look at series’ JEFFREY C. LOWE, MANAGING DIRECTOR; ASG range, payload capacity and evolution over the years. Speaking on the volatile climate between the US and China in their escalating talks on trade and how this will impact business aviation. 50 MARKET SUMMARY - JETS A look at market position and average days on market of featured pre-owned business jets. 19 COUNTRY PROFILE - GREATER CHINA Overview and examination of Greater China’s business aviation industry, current challenges and potential for the future. 60 MARKET SUMMARY - HELICOPTERS A look at market position and average days on market of featured pre-owned helicopters. 28 PRE-OWNED MARKET SPOTLIGHT CORPORATE AIRLINER A comprehensive market performance analysis of the pre- owned corporate airliner market. PUBLISHER The materials and information provided by Asian Sky or expenses howsoever caused, whether arising Group Limited (“ASG”) in this report is for reference directly or indirectly from any error or omission in only. Any information we provide about how we may compiling such information. 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Asian Sky Group Casper Zhuang Suite 1401, 14 Floor, Fortis Tower Jersey Wu ASG endeavors to ensure that the information 77-79 Gloucester Road, Wan Chai, Hong Kong Michelle Shen 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] its accuracy or completeness, or accept any liability www.asianskygroup.com of whatever nature for any losses, damage, costs www.asianskymedia.com 2 | ASIAN SKY QUARTERLY — THIRD QUARTER 2018 Chris is a Senior Airworthiness Inspector who’s always loved to travel. His many years of aviation experience and expertise go far when it comes to getting your aircraft inspected and certified. Check in with Chris if you need a fast turnaround, he can usually inspect and issue certificates on the same day.