ASIAN SKY QUARTERLY FIRST QUARTER 2017
EXCLUSIVE FIRST INTERVIEW CHANG, QIU SHENG CHAIRMAN, AMBER AVIATION
SPOTLIGHT BOMBARDIER GLOBAL XRS/6000 COUNTRY PROFILE SOUTH KOREA ASIA-PACIFIC OUTLOOK METRICS & MOOD INTERVIEW SEONGBAE CHO SENIOR VICE PRESIDENT, CURRENT MARKET SUMMARIES KOREAN AIR BUSINESS JET JETS & HELICOPTERS
FALCON 8X TAKES YOU FIRST QUARTER 2017 TO THE TOP OF THE WORLD
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | I THINK BUSINESS
When it comes to gaining a competitive edge in commerce, you simply need the best. With our helicopters, you will fly faster and more safely, while enjoying greater comfort and reliability. Invest in an H130.
II | ASIAN SKY QUARTERLY — FIRST QUARTER 2017
13094-AH-H130Biz-Master-210x297-EN.indd 1 22/03/2017 13:02 PUBLISHER’S NOTE
THINK BUSINESS
When it comes to gaining a competitive edge in commerce, you simply need the best. With our helicopters, you will fly faster and more safely, while enjoying greater comfort and reliability. Invest in an H130.
For this issue of Asian Sky Quarterly I had the pleasure of interviewing my old It was all ground breaking stuff, never been done before, and required great faith friend and colleague Chang Qiu Sheng. in the business potential and in the people that brought it to the table.
I’ve known Chang for pretty much the whole 20 years I’ve been working the Those were interesting times almost 15 years ago, reemphasising just how China market. Eventually I worked for him at BAA, but probably the most young business aviation is in China and yet how far it has come in this time too. memorable event for the two of us was the delivery of the first Gulfstream in China. At that time I was Gulfstream’s VP in Asia and Chang was the Also featured in this issue are equally interesting interviews with ASG’s new newly appointed head of the equally newly created Air China Business Jet. It Sales Director for Africa: Lynton Van Aswegen; Paul Jebely, the new Managing was October 2003 at NBAA and Air China took delivery of a GIV S/N 1144, Director in Hong Kong for Pillsbury Winthrop; and Wooksang Cho, CEO & registration number B-3999 on a one year lease with a purchase option for a President of Avjet Asia in Seoul. new Gulfstream. As to our regular scheduled features, the country profile this time is South The huge significance of the event was probably a bit lost on us at the time. Korea and the aircraft spotlight is on Bombardier’s Global XRS / 6000 family. For us, it was just the conclusion of a long process of relationship building and Also included are our usual macro-economic country overviews, “Mood & equally long negotiations including a memorable session at the Boao Forum Intentions” market survey results and comprehensive Asia-Pacific market in Hainan in 2002, where we finally got it done. It was a ‘first’ on many levels. dynamics analysis. The most significant being the first business jet operated by Air China Business Jet and the first large cabin Gulfstream in China. This was the start for “Wan Liu” just over 13 years ago to where today Gulfstream is the leading brand in Mainland China, with a third of the market and over 100 business jets in the country.
Many parties were involved in making it happen in addition to Chang and me: David Chou, President of PCAT in Beijing who was the bridge between Chang and myself; Bryan Moss, President of Gulfstream at the time, who was a firm Sincerely, believer in the immense potential of the Chinese market even back then and Jeffrey C. Lowe who subsequently agreed to take the risk and sell the deal internally; and Eric Managing Director, Asian Sky Group Hinson, SVP of Gulfstream Financial Services Corp., who found a way to pull a lease together for a wholly owned subsidiary of CNAC – Air China Business Jet.
SPECIAL THANKS TO OUR CONTRIBUTORS:
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 1
13094-AH-H130Biz-Master-210x297-EN.indd 1 22/03/2017 13:02 CONTENTS
04 ECONOMICS 29 INTERVIEW: Overview of the Asia-Pacific region’s current status and MR. PAUL JEBELY, each specific country’s GDP in contrast with their business PILLSBURY WINTHROP, MANAGING DIRECTOR aircraft fleet growth. Speaking on the law firm’s culture and active role in supporting the business aviation industry.
06 MOOD & INTENTIONS 32 MARKET DYNAMICS Survey results of the Asia-Pacific region’s mood on current An in-depth analysis of the changing pricing signals and economic status, aircraft utilization, purchase intentions trends for the business jet fleet in the Asia-Pacific region, and influencing factors. given the continual fluctuations of supply and demand.
11 INTERVIEW: 41 AIRCRAFT SPOTLIGHT MR. CHANG QIU SHENG, A comprehensive market performance analysis of the pre- AMBER AVIATION, CHAIRMAN owned Global XRS and 6000 market. Discussing his role in developing China’s aviation industry, his decades of experience and his latest endeavor. 46 INTERVIEW: MR. LYNTON VAN ASWEGEN, 14 COUNTRY PROFILE - SOUTH KOREA ASG’S SALES DIRECTOR, AFRICA Overview and examination of South Korea’s business Speaking on his experiences within the business aviation aviation industry, its fleet growth and top operators. industry and the up and coming Africa market.
22 INTERVIEW: 51 MARKET SUMMARY -- JETS MR. WOOKSANG CHO, A model-by-model market positioning and average days AVJET ASIA, CEO & PRESIDENT on-market analysis with featured pre-owned business jets. On the company’s work with Korea Airports Corporation to develop Korea’s first FBO. 68 MARKET SUMMARY -- HELICOPTERS A model-by-model market positioning and average days 26 INTERVIEW: on-market analysis with featured pre-owned civil helicopters. MR. SEONGBAE CHO, KOREAN AIR BUSINESS JET, SENIOR VICE PRESIDENT Discussing the company’s commitment to its clients to provide an incomparable charter experience.
PUBLISHER The materials and information provided by Asian Sky of whatever nature for any losses, damage, costs Asian Sky Group Group Limited (“ASG”) in this report is for reference or expenses howsoever caused, whether arising only. Any information we provide about how we directly or indirectly from any error or omission in EDITORIAL may interpret the data and market, or how certain compiling such information. This report also uses Litalia Yoakum issues may be addressed is provided generally third party information not compiled by ASG. ASG without considering your specific circumstances. Such is not responsible for such information and makes CREATIVE DIRECTOR information should not be regarded as a substitute for no representation about the accuracy, completeness Jennifer Spano professional advice. Independent professional advice or any other aspect of information contained. The should be sought before taking action on any matters information, data, articles, or resources provided by DESIGN to which information provided in this report may be any other parties do not in any way signify that ASG Robert Li relevant. endorses the same. Aya Leung Michael Wong ASG shall not be liable for any losses, damage, costs or expenses howsoever caused, arising directly or AIRCRAFT SALES INQUIRIES: MARKET RESEARCH & DATA ANALYSIS indirectly from the use of or inability to use this report Bowen Zhang or use of or reliance upon any information or material Patrick Bouvry provided in this report or otherwise in connection with Stella Tsang any representation, statement or information on or contained in this report. Asian Sky Group ADVERTISING ENQUIRIES Suite 3905, Far East Finance Centre, [email protected] ASG endeavors to ensure that the information 16 Harcourt Road, Admiralty, Hong Kong 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
2 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 AN UNPARALLELED EXPERIENCE
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FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 3 2016 Q4 ECONOMICS
Growth in Asia (ex-Japan) has stayed robust, thanks to both stable domestic and improving external demand. Protectionism remains a risk for such a trade-dependent region, particularly US protectionism. Macro-stability risks are benign thanks to continued improvement in current account balances and high real rate buffers. As the external demand environment has improved, policymakers have reduced fiscal support at the margin and further rate cuts are not expected for the majority of the region.
Source: Morgan Stanley & Tradingeconomics.com
Australia South Korea The Australian economy seems to have recovered in 2016 Q4 from the GDP momentum weakened towards year-end (2.3% y-o-y in 2016 Q4), shock contraction in 2016 Q3. Retail sales were up over the course of driven by softer consumer spending (recent political events impacted 2016 Q4, as were exports, which benefitted from improving commodity sentiment) and export growth, as well as destocking. Investment prices. This was the strongest expansion since 2016 Q1, mainly boosted picked up thanks to both an improvement in construction and facility by household spending, investment and net trade while government investment. Overall, a combination of weak structural fundamentals spending was flat. (high debt, unfavorable demographics) and limited policy response means that the Korean economy continues to face risks of lower China growth. Moreover, a pickup in global growth would not lend the same While growth has held up well in 2016 Q4, there have been signs of export support to Korea as before, given the uncertainty over trade moderation. The largest drag on activity came from weaker fiscal protectionism, weaker global trade elasticity, and ongoing excess expenditure, followed by weaker trade growth volume, passenger capacity in China. car sales and steel production, suggesting softer aggregate demand growth. It is believed that cyclical growth momentum is at or Singapore approaching the peak, and could moderate from 6.7% in 2016 to Singapore’s economy started 2017 on a positive note, as the economy 6.4% in 2017 due to softer housing and automobile markets and less expanded 2.9% y-o-y in 2016 Q4. It is the highest expansion since 2014 accommodative policy. Q4, mainly boosted by manufacturing.
Hong Kong Thailand The economic recovery continued in 2016 Q4, with the Hong Kong Thailand’s economy grew by 0.4% in 2016 Q4. The GDP growth economy growing 3.1% y-o-y in 2016 Q4, compared to an upwardly rate remained at its weakest level since 2014 Q1, mainly driven by a revised 2% expansion in the 2016 Q3. It was the strongest growth since slowdown in exports while private consumption, government spending 2015 Q2, mainly supported by a faster rise in private consumption and and investment rebounded. exports of goods while government spending and investment expanded further. Philippines The Philippines GDP expanded 1.7% q-o-q in 2016 Q4, compared to an Taiwan upwardly revised 1.5% growth in 2016 Q3 and slightly above market The Taiwanese economy expanded 2.88% y-on-y in 2016 Q4. It was the estimates of 1.6% growth. The services sector grew at a faster pace strongest expansion since 2015 Q1, driven by a faster rise in investment while the industry sector slowed and agriculture contracted. exports, while private consumption eased. On the production side, most sectors grew: manufacturing, transportation, wholesale & retail trade, India information and communication, electricity and gas supply, and real The domestic demand recovery, which had been underway prior to Nov. estate and ownership of dwellings. In contrast, a decline was seen for 2016, was affected by the currency replacement program. The latest construction, and mining and quarrying. data on motorcycle and passenger cars indicated that consumption indicators have normalized somewhat in January 2017 after a Malaysia pronounced slowdown in December 2016. While public capex has The Malaysian economy expanded 4.5% y-o-y in 2016 Q4, compared continued to exhibit robust growth, private corporate capex remains to a 4.3% growth in 2016 Q3 and in line with markets expectations. It weak and projects under implementation decelerated further. The was the strongest expansion since 2015 Q4, mainly supported by a external environment, however, has remained supportive of growth. rebound in exports and a faster increase in investment while private consumption remained robust. Indonesia Real GDP growth moderated somewhat towards yearend (4.9% in 2016 Japan Q4) amid weaker government spending. However, private consumption Timid gains in wage growth continue to weigh on Japan’s economic held up well. Meanwhile, investment also picked up somewhat in 2016 activity despite the government’s efforts to stimulate household Q4 and exports rebounded sharply. With external balances improving spending and the unemployment rate hovering at multi-year lows. Still, and real rate buffers high, Indonesia is less likely to face macro stability the Japanese economy advanced 0.2% in 2016 Q4, following 0.3% risks amid a gradual rise in US rates. growth in 2016 Q3 and below market expectations of a 0.3% expansion. It was the fourth quarter of growth, boosted by exports, government spending and private non-residential investment while household consumption was flat.
4 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 ECONOMICS BUSINESS JET FLEET AND GDP BY COUNTRY
Australia China Hong Kong India
Indonesia Japan Malaysia New Zealand
Papua New Philippines Singapore South Korea Guinea
Taiwan Thailand
GDP (B USD)* BUSINESS JET FLEET † CIVIL TURBINE HELICOPTER FLEET †
11,756 313 805
6,040 5,495 4,165 2,242 641 662 601 1,709 187 495 1,508 471 1,372 1,142 1,095 906 146 139 130 755
110 326 286 538 74 56 59 223 53 446 51 222 200 408 50 48 181 156 38 156 341 319 37 147 312/310 35 150 298 34 120 255 29 113 107 236 23 108 106 229 22 200 178 17 76 15 14 147 13 45 27 8 16 15 20 4 10 2 1 3
2010 2 011 2012 2013 2014 2015 2016 2010 2 011 2012 2013 2014 2015 2016 2010 2 011 2012 2013 2014 2015 2016
* 2014 & 2015 ASG data and historically adjusted using Jetnet fleet yearly increases. * GDP Source: Tradingeconomics.com
† Business jet and civil helicopter fleet data obtained from ASG’s Fleet Reports. For our latest publications, please stay tuned for ASG’s media channel www.asianskymedia.com
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 5 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2017 Q1
In February 2017, over 320 respondents participated in ASG’s survey on TOP 5 RESPONDENT’S LOCATION the mood and intentions of the current business aviation market - the survey’s highest number ever. Regions with the most respondents were:
1. South & East Asia (91 respondents (28%), including Indonesia, Singapore, Indonesia 20 (10%) India 63 (31%) Philippines, Malaysia, Thailand, Japan, and South Korea)
2. Central Asia (88 respondents (27%), including India, Pakistan, others.) Hong Kong 29 (15%) 3. Greater China (77 respondents (24%), including Mainland China, Taiwan, % Hong Kong and Macau) 63 OF TOTAL APAC 4. Oceania (50 respondents (16%), including Australia, New Zealand and Papua RESPONDENTS Australia 43 (21%) China 47 (23%) New Guinea) 31+23+211510+G RESPONDENT LOCATION BREAKDOWN RESPONDENT’S AIRCRAFT TYPE
Others 17 (5%) South & East Asia 91 (28%) Helicopters 75 (29%)
Oceania 50 (16%)
+ Business Jets or 320 Turboprops 187 (71%) RESPONDENTS Central Asia 71+29+G Greater China 77 (24%) 88 (27%) WHAT IS OUR CURRENT ECONOMIC STATUS? (QUARTERLY COMPARISON)
28+2724165+G 2017 Q1 MARKET MOOD OF CURRENT ECONOMY 2016 Q4 2016 Q3 Pessimistic Optimistic 2016 Q2 (Will get worse) (Will get better)
2017 Q1 27% 73% Past Low Point At Low Point
38% 35% 36% 30% 26% 27% 2016 Q4 34% 66% 24% 30%
2016 Q3 47% 53%
2016 Q2 46% 54%
46% 47% 2016 Q1 48% 52% 3034% +4624G Neutral 2727% +4726G 30Not Reached Low Point +3436G The optimistic economic mood continued to improve in 2017 Q1, with and will 35get worse, which is a 7% drop from 2016 Q4. The number of+2738G 38% of the total respondents believing that our economy has passed respondents who believe that the economy in 2017 Q1 was at its low its low point and will get better, a 3% increase from 2016 Q4. 27% of point is 35%, which is 5% higher compared to the 2016 Q4 survey. respondents believe that the economy has not reached its low point
6 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2017 Q1
WHAT IS OUR CURRENT ECONOMIC STATUS?
Not Reached Low Point At Low Point Past Low Point
Greater China 38% 36% 26%
South & East Asia 21% 43% 36%
Central Asia 16% 32% 52%
Oceania 38% 26% 36%
In Greater China, 26% of the respondents believe that the economy is In general, respondents who believe that the current economic situation past its low point, a 6% drop from 2016 Q4 and 36% of the respondents has passed its low point or is at its low point can be described as believe that the current economy is at its bottom – a 16% increase from optimistic. In 2017 Q1, 73% of the respondents believed that the Asia 2016 Q4. Therefore, in 2017 Q1 more respondents in Greater China Pacific region’s economy can improve in the future – a 7% increase believe the economy will get better. However despite this improvement compared to 2016 Q4 and a 20% increase since 2016 Q1. and the optimisitc mood prevalent in the Asia Pacific region as a whole, Greater China together with Oceania still remain the two most pessimistic regions. Respondents from Central Asia are still the most optimistic in the region.
HOW IS YOUR AIRCRAFT UTILIZATION COMPARED TO 12 MONTHS AGO?
2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1
52%
44% 43% 39% 37% 34% 33%34% 33% 33% 32% 33% 29% 28% 29% 24% 24% 19%
+0+0+0+0+0+0+0+0Decreased+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0+0The+0+0+0+0+0+0+0+0 same +0+0+0+0+0+0+0+0Increased 443334+0+0+0+0+0+0+0+043+0+0+0+0+0+0+0+02924+0+0+0+0+0+0+0+0 3733%3333% 33+0+0+0+0+0+0+0+03228+0+0+0+0+0+0+0+0 24+0+0+0+0+0+0+0+0 1934 3339 29 52 32% 28% 30% 26% 24% 20% 20% 21% 21% 21% 19% 19% 19% 18% 17% 16% 14% 14% 14% 12% 10% 10% 8%
Down 20% or more Down but less than The same (0%) Up but less than Up by 20% and more 1414+0+0+0+0+0+0+0+017+0+0+0+0(<-20%)10+0+0+0+08+0+0+0+0 19 20%+0+0+0+0 20+0+0+0+0(-20-0%) 26+0+0+0+016+0+0+0+019+0+0+0+0 33+0+0+0+033+0+0+0+0 28+0+0+0+0 32+0+0+0+0 24+0+0+0+02020%+0+0+0+0 (0-20%) 21+0+0+0+0 19+0+0+0+030+0+0+0+0 21+0+0+0+0 14 (>20%) 12 10 18 21
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 7 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2017 Q1
GREATER CHINA AIRCRAFT UTILIZATION: REGIONAL DIFFERENCES
OPTIMISTIC For 2017 Q1, 24% of respondents said their
PESSIMISTIC aircraft utilization has decreased, which is 5% Slightly Worsening Improved - Higher Utilization lower compared to 2016 Q4, and 20% lower
Much Improved since 2015 Q4. 52% of respondents said their aircraft utilization has increased, which is a 13% increase compared to 2016 Q4, and 33% Decreased The Same Increased Signal Line* increase since 2015 Q4.
49% 47% 47% *An Optimistic-Pessimistic Signal Line has been 39% 38% 35% 37% 34% 32%32% 34% 34% added. An optimistic mood is derived if more 27% 28% 29% 24% 19% respondents indicate a ‘higher’ aircraft utilization 16% than 12 months ago, and a pessimistic mood is derived if more respondents indicate a ‘lower’ aircraft utilization than 12 months ago. 49+0+0+0+0201535+016+0+0 Q4+0+0+0+0+0 2016 27+039+0+0+0+034+0+0 Q1+0+0+0+0+0 201637+0+0+0+0 32+0 32+0+0 Q2+0+0+0+0+0 2016 1934 47+0+0+0+0+0Q3+0+0+0+0+0+0+0 2016 28 34+0+0+0+038 +0+Q40+0+0+0+0+0+0 292017 2447 Q1
Greater China 47% of respondents indicated that their aircraft OCEANIA utilization in 2017 Q1 increased, with only 29% of the respondents stating that their aircraft Improved - Higher Utilization utilization is lower compared to 12 months ago. OPTIMISTIC This is a 9% increase and 5% drop compared to
PESSIMISTIC Worsening Continued 2016 Q4. Aircraft utilization began to increase Worsening in 2016 Q3, with the total utilization trend continuing its rise into the optimistic zone.
Decreased The Same Increased Signal Line*
46% 41% 42% 44% Oceania 38% 38% 35% 37% 30% 32% 31%31% 31% Overall, respondents in the Oceania region 25% 27% 25% 24% 22% stated their aircraft utilization remained unchanged in 2017 Q1, with only 25% of respondents stating their aircraft utilization increased. This is a 6% drop from 2016 Q4, 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 41+0+0+0+035+024+0+0+0+0+0+0+0 37+025+0+0+0+038+0+0+0+0+0+0+0 42+0+0+0+0 30+0 27+0+0+0+0+0+0+0 322246+0+0+0+0+0+0+0+0+0+0+0+0 31 38+0+0+0+031+0+0+0+0+0+0 +0+0 31 4425 which means the utilization trend line for Oceania remains in the pessimistic zone for 2017 Q1.
SOUTH AND EAST ASIA South and East Asia Aircraft utilization has moved back into the pessimistic zone after modest improvements OPTIMISTIC in 2016 Q4. Only 19% of respondents reported
PESSIMISTIC Worsening an increased use of their aircraft in 2017 Q1, Improved - Higher Utilization with this being the second lowest since 2016 Q1. Respondents in South and East Asia are expecting lower aircraft utilizations to continue Decreased The Same Increased Signal Line* in 2017 Q2.
50% 50% 48% 43% 41% 36% 37% 35% 36%37% 32% 33% 28% 27% 23% 18% 19%
7% 50+0+0+0+0201543+0 7+0+0Q4+0+0+0+0+0 2016 32+050+0+0+0+0 18+0+0Q1+0+0+0+0+0 201623+0+0+0+0 36+0 41+0+0 Q2+0+0+0+0+0 2016 283537+0+0+0+0 +0Q3+0+0+0+0+0+0+0 2016 36 27+0+0+0+037 +0Q4+0+0+0+0+0 +0+0 332017 4819 Q1 8 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2017 Q1
MANAGEMENT COMPANY SATISFACTION KEY FACTORS (OUTER IS BETTER)*
Greater China Oceania Similar to 2016 Q4, overall aircraft owners (particularly in the Oceania Central Asia South & East Asia region) are satisfied with the ‘Operational Safety’ and ‘Quality of On-board Service’ but not satisfied with the ‘Value for Money’ (particularly in Greater Customer Service China) from their management companies.
Most Satisfied The Oceania region has the highest satisfaction levels compared to other
Operational Operational regions. Respondents in Greater China are mostly satisfied with ‘Quality Safety Efficiency of On-board Service’ but not satisfied with ‘Operational Safety’.
In South & East Asia, ‘Value for Money’ is the most satisfying factor while respondents are least satisfied with ‘Quality of On-board Service’.
Respondents in Central Asia have a relatively higher satisfaction level Quality of Value for compared to Greater China and South & East Asia. Maintenance Money (Price)
Quality of On-board Service
DO YOU OR YOUR CLIENT OWN OR CHARTER PRIMARY CHOICE WHEN SOURCING A PRIVATE AIRCRAFT? A CHARTER AIRCRAFT
Just Own (40%) Both Own and Charter (46%) Contact Operator (76%) Contact Broker (24%)
Just Charter (14%) 46+14+40+G 24+76+G
OVERALL SATISFACTION BROKER VS OPERATOR When asked “Do you or your client own or charter a private aircraft?”, (OUTER IS BETTER) 14% of respondents only charter an aircraft, while 40% just own a private aircraft. The remaining 46% would both own and charter an aircraft. For Operator Broker “Just Charter“, this is the 3rd consecutive quarter where the percentage of respondents has increased. Although just a modest increase of 4% Customer Service over 6 months, this could nevertheless indicate a growing trend towards 4.5 charter versus ownership. Regarding the primary source for charter 4.0 aircraft, there appears to be a growing trend towards contacting a broker Operational Operational 3.5 versus operator. Again, there has been 3 consecutive quarters now where Safety Efficiency 3.0 the percentage of respondents contacting a broker has increased: 18% in 2016 Q3 to 24% in 2017 Q1, indicating a trend towards the full concierge 2.5 service offered by brokers.
Quality of Value for Maintenance Money (Price) When asking our respondents to compare charter brokers and charter operators, we found that the overall satisfaction level of a charter operator is generally higher compared to a charter broker, but this difference is diminishing q-on-q and therefore more respondents are choosing brokers. Quality of On-board Service
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 9 MOOD & INTENTIONS: ASIA-PACIFIC REGION SURVEY 2017 Q1
PURCHASE INTENTION PURCHASE INTENTION 2015 Q4 - 2017 Q1 Contrary to the continued optimism towards the economy in 2017 Q1, 2015 Q4 2016 Q2 2016 Q4 only 23% (4% higher than 2016 Q4) of respondents are considering 2016 Q1 2016 Q3 2017 Q1 purchasing a new aircraft and only 23% of respondents are considering 58% 58% 56% purchasing a pre-owned aircraft, a 2% decrease compared to 2016 54% 48% Q4. Just over half (54% of respondents) are not sure or simply don’t 43% 30% 29% 28% 25% 23% 23% 22% 22% 22% 20% 20% have a plan to purchase an aircraft, which is a continuation of the 19% same sentiment shared in 2016 Q4, when 56% were unsure. This is a significant drop though in overall purchase intention (new and pre- Yes,2020+0+0+0 a+0+0+0+0 new22+0+0+0 28aircraft19+0+0+0+0+0+023+0+0+0+0+0+0+0+0 +0+0+0+0+0+0Yes, 22+0+0 22+0+0+0a+0+0+0+0+0 pre-owned 30+0+0+0+0+0 29+0 25+0+0+0+0+0+0 aircraft23+0+0+0+0+0+0+0+0 +0+0+0+0+0+0 58+0+0 58No+0 48+0/+0 I’m 43+0 not 56 sure54 owned) from 2016 Q3 when 57% of respondents indicated they would be buying an aircraft. are the medium-sized jets (Challenger 350, G280.), while compared to Central Asia (India, Pakistan), the most welcomed models are small jets The purchase intention by region is shown below. In Greater China, the (Hawker 850, Learjet 45). Different to all other regions in the survey area, most welcomed type of business jets are large jets (G650, Falcon 7X, Oceania has a much higher demand for turboprop / fixed wing aircraft, Global 6000.) and in South and East Asia, the most preferred model and models like the King Air 350, Cessna 208.
PURCHSASE INTENTION - REGIONAL DIFFERENCES (FIXED WING)
Corporate Airliner Large Jet Medium Jet Small Jet Turboprop / Piston Fixed Wing
Central Asia 19% 14% 24% 36% 8%
South & East Asia 18% 19% 28% 18% 18%
Oceania 6% 6% 13% 19% 56%
Greater China 17% 45% 32% 4% 2%
INFLUENCING FACTORS ON PURCHASE INTENTION - AIRCRAFT TYPE PURCHASE DECISION (OUTER IS PREFERRED) Corporate Airliner Influencing factors have been simplified into four major categories:
Need, Public Image, Aircraft Price and Interest – and there are significant Piston Helicopter Large Jet regional differences.
Greater China Single Turbine Medium Jet Due to the central government’s welcoming stance on developing Helicopter the general aviation market, Chinese aircraft buyers have gone from worrying about Public Image to realizing being concern now about finding the right aircraft to suit their interests their next concern is price Twin Turbine Turboprop/Piston Helicopter Fixed Wing followed by need when marking a purchase decision. Small Jet
Oceania With relatively low aircraft utilizatio, this region doesn’t feel the need PURCHASE DECISIONS - INFLUENCING FACTORS to replace or purchase a new aircraft. There is also a high concern (OUTER IS LIMITING)* regarding the public image of purchasing an aircraft. Greater China Oceania South & East Asia Central Asia
South & East Asia Need Respondents don’t believe there is need or interest to buy an aircraft. They are also less sensitive about the aircraft price, compared to China. Most Limiting
Central Asia The region’s (mostly from India & Pakistan) respondents are equally motivated by need, interest and price, but public image is not a main Public Image Interest concern.
Aircraft Price
10 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 EVOLVING CHINA’S INDUSTRY, ONE JET AT A TIME INTERVIEW WITH MR. CHANG QIU SHENG, AMBER AVIATION CHAIRMAN Interview by Litalia Yoakum
aving played a key role in bringing the first Gulfstream jet to China, obtained one of the country’s first air operator’s certificate (AOC) and established the first privately-owned aircraft management Hcompany in China through Business Aviation Asia (BAA), Mr. Chang Qiu Sheng has always been at the center of the evolution of China's business aviation industry.
In 2017, his determination to role with the company was Assistant General Manager of the Business develop the industry and further Jet unit, from 2003-2006. his own experience will once again emerge with the launch of his new In 2003, he engaged in a transaction that would pave the way for business aviation management Gulfstream to become the market leader in the Greater China region company: Amber Aviation. today. Mr. Chang’s involvement in bringing the first Gulfstream aircraft, a G-IV, to Mainland China proved to be a pivotal move. “I graduated from college in 1989 and immediately started my career in the operations center of Air China,” says Mr. Chang, explaining when “This was a very complex process,” recalls Mr. Chang. “Because there his 30 plus years of experience in the industry began. “At that time the was no previous experience, the government would take it as very Beijing Airport had no ground handling service for business jets, which troubling work. I didn’t know much about the document application caused a lot of chaos. The Civil Aviation Administration of China (CAAC) process. I knew we had a duty to help Gulfstream get the required then asked Air China if they could start a new branch, specializing in documents and certificates, which eventually made a big contribution business jets, which would include government-related flights. I was to the future development and sales of Gulfstream aircraft. All asked to lead the team.” other OEMs would have to face the same barriers and go through the process Gulfstream had already passed through. This helped Working with the state-owned company taught Mr. Chang the ins and Gulfstream occupy the Chinese market.” outs of the business jet sector from ground handling operations to government flights, including special flights for foreign dignitaries. Shortly after this feat, Mr. Chang took on another monumental task. During his time with Air China, he served as General Manager of Beijing In 2004, a Japanese client came to the Air China Business Jet unit, in Air China Aviation Service Corporation from 1997-2001 and Deputy hopes of importing his Bombardier Learjet 45 into Mainland China. Just Director of the company’s VVIP flight office from 2001-2003. His final
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 11 INDUSTRY INSIDER
as the effort to bring in the country’s first Gulfstream was troublesome, company ended up with three shareholders, one of which was so was this transaction, in dealing with the China Customs. This would Shenzhen Airlines. Mr. Chang and his team were therefore ready to turn out to be the first business jet imported into China, as well as the begin operations in April 2007, the local carrier provided credibility to first aircraft Air China Business Jet would manage. the business jet company, which was little known in the region.
As the years moved by, Mr. Chang continued to learn about the The air operator’s certificate (AOC), which took less than a year industry, just as he was helping to develop it. What stuck in his mind to obtain, was one of the first in Central and Southern China for a though was that one must keep up with the changing market and it's business jet management company. needs - one needs to keep moving forward. “Before BAA began to make profit in 2011, I was faced with a tough decision,” explains Mr. Chang. “At that time, our Hong Kong base operated N-registered aircraft, while the Mainland team managed As the years moved by, the B-registered aircraft, however, both suffered losses. The team in Hong Kong provided advanced service quality, but safety control Mr. Chang continued to management of pilots, maintenance and operations, was what the Shenzhen team excelled in. I then made a decision, which would learn about the industry, assure safety and quality service. I put all aircraft in one operational just as he was helping center and lowered the cost.” After coming to understand the market and the industry more and to develop it. more, Mr. Chang continued moving forward in the progressive way he had adapted. His team prided itself on continuous aircraft maintenance, preventing bigger issues in the long run, quality service Finally, in 2006, an opportunity presented itself that would trigger that saw the clients’ interest held in high esteem, and that they were a new company, with a new strategy. “A business friend, based in now a team full of experts. Hong Kong, was selling a Gulfstream 200 to a local client,” explains Mr. Chang. “I came to present myself to manage his jet. After our In a move to offer more to its clients, BAA announced in April 2016 a conversation, the client said: ‘Why don’t you set up your own business collaboration with one of the largest business jet companies in the jet management company and I will invest the money.’ He asked how world, offering fractional jet ownership. The partnership was one Mr. much I needed and he agreed.” Chang was familiar with, as his former company Air China had been in talks for a similar partnership in China, before the project was halted. Looking back, Mr. Chang, now an industry veteran, finds this For Mr. Chang, the Chinese market was becoming more aware and conversation to be unbelievable. This ‘leap of faith’ led to the more educated, which in his mind equated to a need for more options. establishment of Business Aviation Asia (BAA), in Shenzhen, miles This collaboration was intended to provide those options, serving the away from Air China Business Jet's headquarters in Beijing. The local needs.
12 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
Before Mr. Chang had the chance to see this new partnership flourish “The problems I faced before will be solved with Amber Aviation,” says though, he was once again faced with uncertainty regarding the Chang. “Amber Aviation will be like a supermarket with a lot of products direction the company was going. As new outside investors joined at various prices. You can buy all or a single product. We will have BAA, the company began to experience more disagreements amongst different management models and you can pick the one you like. You shareholders. Mr. Chang began to feel not enough time and effort was can hire your own pilots and flight attendants if that is what you wish. being spent solving the problems the company faced. Amber Aviation will develop a tailored product specific to each of it's clients.” Throughout his career, Mr. Chang has always believed that investing and focusing on significant issues such as safety will pay dividends in In previous years, aircraft owners have often accepted any product the long-run. “There must be a strong safety foundation,” says Chang. offered, but with education and awareness, owners have a better idea of what they want. “Amber will satisfy whatever need and request a client poses.” The one factor Amber Aviation will continue to control is Knowing the industry safety, “the standards of which can’t be changed by clients.”
and the market are Founded in February 2017, Amber Aviation will cater to HNWIs and large corporations, providing a highly customized management service growing, he is now including charter services, aircraft sales, consulting and maintenance. Based in Shenzhen, the new company boasts an experienced ready to provide the management team, with a solid understanding of regional regulations and laws. Amber Aviation’s dedication toward safety, its team local market with knowledge, financial strength and ideal geographic location will provide the base to develop with the market and deliver unsurpassed service personalized products. to all clients.
Ready to take on a new endeavor has made way for Amber Aviation, where Mr. Chang, taking the position of Chairman, will also bring onboard several key industry veterans to work with him. Mr. Chang is confident the team, which has about 10 years of experience working together and has formed a unique bond, will be the core of this new company.
Knowing the industry and that the market has matured, Chang is now ready to provide the local market with personalized products, including a fly sharing program.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 13 COUNTRY PROFILE SOUTH KOREA
Yangyang Gimpo International Airport International Airport & Avjet Asia (FBO)
Incheon Wonju Airport International Airport Seoul
Cheongju International Airport Hanseo University Flight Education Center
Pohang Airport Daegu Airport
Ulsan Airport
Sacheon Airport
Muan Gwangju Airport Yeosu Airport Gimhae International Airport International Airport
Domestic Airport
International Airport Jeju International Airport Training Field
14 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 COUNTRY PROFILE: SOUTH KOREA
SOUTH KOREA by Litalia Yoakum
After transforming itself from one of the poorest economies in the world Business Jet Fleet — Size Category Breakdown to one of the richest in just one generation, South Korea has positioned itself as an economic powerhouse. Preparing to keep up with the country’s swift development is the business aviation industry ready to Large 1 (5%) Long Range 6 (27%) cater to South Korea’s corporations and growing industry. Medium 1 (4%) Home to more than 50 million people, South Korea inhabits the southern portion of the mountainous Korean Peninsula, bordered by the Sea of Very Light 3 (14%) Japan and the Yellow Sea. After World War II, which coincided with the end of the Japanese occupation, the southern portion of the peninsula was created into the now-known democratic government (Republic of Korea, ROC), while the northern portion installed a communist-style 22 government (Democratic People’s Republic of Korea, DPKR).
Since its establishment under a democratic government, the country Light 5 (23%) Corp. Airliner 6 (27%) has thrived with innovation, manufacturing and technology becoming a competitive market with a highly-skilled workforce, opening the door for domestic and international business. Business Jet27 Fleet — OEM Breakdown +27231445+G Referred to as the “Miracle on the Han River”, for its rapid economic growth following the Korean War, South Korea now joins the ranks of the trillion-dollar club of world economies, an unofficial classification given to countries with a gross domestic product (GDP) of more than USD 1 Hawker 1 (4%) Cessna 8 (36%) trillion per year. As the fourth largest economy in Asia, Korea’s economy Airbus 1 (5%) is largely dominated by family-owned conglomerates (Chaebols) Bombardier 3 (14%) including the Samsung Group, Hyundai, LG Electronics and SK Group, though the country is now seeing the promotion of smaller enterprises and entrepreneurship and to break the Chaebol's grip on the economy.
In coming years, South Korea’s government faces challenges due 22 to a high reliance on exports, which comprise about half of Korea’s GDP, as well as a rapidly aging population, growing inequality and an inflexible labor market. Boeing 5 (23%) Gulfstream 4 (18%)
* Data Source: Asian 36Sky Group Fleet Report (Year-End 2016) +23181454+G While the country undergoes a period South Korea’s current turbulent political climate has caused widespread international attention, as the country’s first female president underwent of transformation impeachment over a corruption and influence-peddling scandal. An election for her replacement will take place 60 days from the March politically and 10th decision date for Korea’s Supreme Court to uphold or not her impeachment. Ongoing tension with the North has also left South Korea economically, several nervous, although the United States has affirmed its commitment to defend the country. industries are taking While the country undergoes a period of transformation politically and part in changes of economically, several industries are making changes of their own. In the business aviation sector, the country has the potential to expand further to cater to traffic brought on by the country’s vast business their own. opportunities. In 2018 the South Korean city of Pyeongchang will host the Winter Olympics, providing a prime opportunity for the country and the industry to illustrate this capacity to the world.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 15 COUNTRY PROFILE: KOREA
Business Jets — Top Operators by OEM
11 2 2 2 2 1 1 1
11+2 +2 +2 +2 +1 +1 +1 Total Center Korean Air Korean Corporation SK Telecom Hyundai Motor Star AeroSpace Star AeroSpace LG International International LG Flight Inspection Hanseo University Hanwha Chemical Hanwha
Airbus 1 1 Boeing 2 2 1 5 Bombardier 2 1 3 Cessna 6 1 1 8 Gulfstream 1 2 1 4 Beechcraft 1 1 Total 11 2 2 2 2 1 1 1 22
Civil Helicopters — Top Operators by OEM
46
18 18 17 46+18+18+17+15+12+11+9+9+815 12 11 9 9 8 Total UI Helojet HeliKorea Fire Dept. Korean Air Korean Hongik Air Aero Peace Aero Coast Guard Forestry Dept. National Police Star Aerospace
Airbus 4 8 1 4 7 8 3 35 Bell 9 2 7 9 2 2 1 2 34 KAI 2 2 Kamov 30 4 2 8 2 46 Leonardo 3 3 3 2 4 4 19 MD 2 1 1 4 Mil 3 7 10 Sikorsky 3 1 3 1 1 4 13 Total 46 18 18 17 15 12 11 9 9 8 163
% of the total Korean fleet 73%
16 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 COUNTRY PROFILE: SOUTH KOREA
STATUS QUO Though a relatively small business aviation market, South Korea is actively Helicopter Fleet — Size Category Breakdown seeking to make a name for itself among the bigger markets in the Asia- Pacific region.
Heavy 14 (6%) Medium 121 (54%) At year end 2016, there were 22 business jets based in South Korea, up from 19 in 2015. Long range jets and corporate airliners each hold 27% of the fleet, suggesting most use is over longer distances. However, the Light Twin 29 (13%) shorter-range Cessna models are still the most popular, with 36% of the market share in the country. Overall, the fleet is young, with the majority manufactured in the past decade. Single 59 (27%) Korean Air is the largest operator in the country by far (50% of the fleet), with 223 11 aircraft including two BBJs, two Global Express XRS’, six Cessnas and one G650. Samsung Group previously held the largest fleet in the country, but sold their entire fleet to Korean Air. Samsung is now exclusively using charter services provided by Korean Air.
As far as jet charter, Aviation Business International Services Korea (ABIS.KOREA) explained that business jet charter services in Korea are 54+27136+G geared towards the large companies based in the country, however larger conglomerates including SK Group, Hyundai, Hanwha and LG Electronics Helicopter Fleet —OEM Breakdown have their own aircraft. 2016 also saw a new charter company join the market. Star Aerospace established a charter business with the purchase of a Cessna Citation 500. KAI 2 (1%) Enstrom 2 (1%)
“Most business jet charter passengers are foreigners coming out of Korea, MD 8 (4%) not Korean residents,” says ABIS.KOREA. “However, the Seoul Gimpo Mil 12 Airbus 56 (25%) Business Aviation Center (SGBAC), the first business aviation terminal, (5%) opened in March 2016. It was developed by the Korea Airports Corporation. Leonardo 21 (9%) This will help to develop the business jet market, charter and business aviation within the country.”
Sikorsky 27 (12%) 223 Helicopter Fleet — Mission Breakdown
Bell 45 (20%) Kamov 50 (23%)
Offshore 3 (1%) Charter 2 (1%) EMS 9 (4%) 25+2320129541+G Law Enforcement 15 (7%) Multi-Mission 154 (69%) At year end 2016, there Corporate 17 (8%) were 22 business jets SAR 23 (10%) based in South Korea, 223 up from 19 in 2015. Long range jets and corporate airliners each
* Data Source: Asian69 Sky Group Fleet Report (Year-End 2016) +108741+G hold 27% of the fleet.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 17 COUNTRY PROFILE: SOUTH KOREA
At present, Taiwan’s economic, commercial, cultural, technological, agricultural and tourism are inseparable from China.
INFRASTRUCTURE CHALLENGES military-operated airports require a 7-day notice. Air congestion often occurs at Incheon and Jeju and it is often difficult to secure slots for There are over a dozen airports in Korea, however only a few adequately overnight parking.” serve business aviation needs. These are Seoul’s Incheon International Airport and Gimpo International Airport, as well as Jeju International Korea’s business aviation industry could also be more successful Airport and Busan’s Gimhae International Airport. with a domestic aircraft management company. “There’s no aircraft management company in Korea,” says Son. “Therefore, a person or Although the fleet only saw minimal growth, 2016 was an important corporation needing a corporate jet or company commute, must year for the industry. establish their own aviation team. To operate an aircraft, they need at least 10 employees, including three pilots and it will cost at least $2.5M “Korea Airports Corporation (KAC), a government investment company, USD annually for employees alone. Once an aircraft management opened the first business jet dedicated facility on June 16 2016,” explains company is established, that company can manage the aircraft and Mr. Kyung Ho Kim, Ph.D from Korea Aerospace University and member the aviation team. More prospects would then be more willing to buy of the Korea Aerospace Policy Research Institute. “Operating 14 Airports jets, without having to worry about management, hiring employees and in Korea, KAC invested approximately 4.5M USD into the Seoul Gimpo aviation law.” Business Aviation Center (SGBAC). The facility was constructed by the Ministry of Land, Infrastructure, and Transport (MOLIT) and KAC to meet the needs of an increasing number of flights to Korea as well as ROTARY MARKET to develop the nation as the business aviation hub in northeast Asia. At year end 2016, the civil helicopter fleet stood at 223. This is significant It includes a VIP terminal which has available on-site CIQ clearance, growth from 2014, when the fleet was 206 and year end 2015 when the and a 10,260㎡-large hangar that can accommodate up to 10 G550, with fleet was 210. Most of these helicopters are involved in multi-mission parking as well as maintenance support offered.” operations, making up 69% of the fleet, followed by those used for SAR operations, with 10% of the fleet. The new terminal will be a catalyst for growth in Korea’s business aviation market. Still, the industry needs more than one airport dedicated Of the 223 helicopters based in South Korea, nearly 40% of the aircraft to the industry. are operated by the Government Forestry Department, Regional Fire Department and Coast Guard for firewfighting, agriculture spraying and As aviation consultant Hyunbae Son explains, “The expansion of Jeju SAR operations. and Busan airports is quite an urgent situation. Most business jet flights have to relocate to Gimpo because [business jet] parking slots “For civil operators, all major markets including firefighting and cargo are limited due to commercial flights.” lifting are saturated,” says HeliKorea Managing Director, Scott Min. “Firefighting operations remain the largest market in Korea, in terms Kim agrees, stating “The main destinations for business jet travelers of sales but supply and demand is currently met within this segment. to Korea are Incheon International Airport, Gimpo and Jeju. For the Although, the Government is now requiring medium and heavy- permit, civil-operated airports need at least a 2-day notice, while sized helicopters.”
18 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 COUNTRY PROFILE: SOUTH KOREA
The transaction timeline is often lengthy though. “Although the Korean helicopter fleet has the potential to expand, replacement costs for these helicopters is high and requires a long process to pass the budget for purchasing new aircraft,” explains Min.
There are 17 operators with three or more helicopters in their fleet. The largest operator remains the Ministry of Forestry, operating 46 helicopters, of which 30 are Russian built Kamov helicopters. HeliKorea and the Fire Department remain in their top spots, with 18 helicopters each. HeliKorea is the largest private operator, followed by Korea Airlines and Hongik Air.
Airbus Helicopters holds the largest share of helicopters in the country, with 56 (25% of the fleet). Kamov follows with 50 helicopters (23% of the fleet.) Out of all the Asia-Pacific countries, Russian-designed helicopters in South Korea have the strongest presence, in terms of the number of helicopters in operation.
TOURISM
According to South Korea’s Ministry of Land, Infrastructure and Transport (MOLIT), as of December 2016, “The country’s air passenger traffic reached 50 million in 2007, 20 years after it reached over 10 million in 1987. And now, just nine years since reaching the 50 million mark, the country’s air passenger traffic has reached over 100 million.” The increased traffic levels are attributed to both international and domestic travel.
For years, Chinese tourists have flocked to the country, driving up traffic levels while enjoying the sights of Seoul, Busan and other areas Although the Korean throughout the country. But times have changed, as Korea-China relations are on edge over the planned deployment of the American helicopter fleet has missile defense system, Terminal High Altitude Area Defense (THAAD).
the potential to “As the placement of THAAD is scheduled for September, trade restrictions from China have started to materialize,” explains Hyunbae expand, replacement Son. “The number of Korea-China travelers has decreased by 27% costs for these from September 2016 to January 2017. Amid this tension, the Korean tourism sector is expected to see heavy helicopters is high. economic effects. Korean state media has since reported that China’s national tourism administration has advised travel agencies to stop selling group packages from Beijing to South Korea.
Agreeing with this is MasterTech International President, Sam Chae, whose company works with Sikorsky to provide helicopter services for Korea’s commercial helicopter market and spare parts for the military, as well as providing flight training services.
“Several commercial companies in Korea are heavily targeting the government forestry standby business,” explains Chae. “These companies often work with the Korean Government, including national and provincial governments, who hire helicopters for firefighting standby. This business is booming and companies are making good profit from this. “
While forestry operations do particularly well in Korea, other operational segments are picking up too, as part of a government plan to expand search and rescue (SAR) and emergency medical service (EMS) operations. Additionally, helicopters for VIP and corporate use are often utilized by large Korean conglomerates including SK Group, LG Electronics and Hanwha.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 19 COUNTRY PROFILE: SOUTH KOREA
FUTURE EXPECTATIONS
For a country amidst scandal and turmoil, the upcoming 2018 Winter The notion that Olympics in Pyeongchang is a chance for the country to showcase its capacity. business aviation “With the opening of the dedicated facility last year at the Gimpo and business jets Airport, the interest in business aviation is gradually rising, including policy makers that are managing the industry, potential customers for are exclusively for business jets and suppliers that provide the products and services,” says Kim. “We predict a substantial increase of potential customers, including the wealthy must major enterprise business owners, but also small and medium-size enterprises, especially in the manufacturing field, IT and service.” be erased. For the industry to continue to grow, Kim believes the notion that business aviation and business jets are exclusively for the wealthy must be erased and business aviation needs to be seen as “an industry contributing to creating jobs and creating economic growth. Business jet use should be nurtured in Korea, and considered as an efficient tool for business.”
“Investment from the government should continue, and regulations for business jets should be developed further,” claims Kim. “This is to build a foundation for an environment that the public will be exposed to, so that they will fully understand the industry and acquire an increased awareness. When this happens, we will grow fast like Mainland China and Hong Kong has.”
Fleet by Age 223 in Total
20
18
16
14
12
10
8
6
4
2
0 1957 1960 1964 1970 1974 1980 1984 1990 1994 1958 1962 1972 1982 1992 2000 2004 2010 2014 1966 1969 1976 1979 1986 1989 1996 1999 2002 2012 1958 1961 1971 1981 1991 2006 2009 2016 1965 1975 1985 1995 2001 2011 1963 1968 1973 1978 1983 1988 1993 1998 2005 2015 1967 1977 1987 1997 2003 2008 2013 2007 Year of Manufacture
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FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 21 DEVELOPING THE INDUSTRY WITH KOREA’S FIRST FBO
INTERVIEW WITH MR. WOOKSANG CHO, AVJET ASIA CEO & PRESIDENT Interview by Litalia Yoakum
roviding 35 years of world-class, executive jet charter, aircraft Opening in June 2016, the Seoul-Gimpo Business Aviation Centre management, completions and sales management services to (SGBAC) functions as a VIP terminal, with private lounges and where Pclients across the world, Avjet entered the Asia market in 2008. customs, immigration and quarantine (CIQ) clearance is done. Established by Mr. Marc J. Foulkrod, former owner of Avjet Corporation, KAC operates the Business Aviation Centre to control regulations along with Mr. Wooksang Cho, former Executive VP of Samsung’s and procedures, specifically for CIQ. Adjacent to the terminal is the Business Jet Operations Team, the duo saw the importance of the maintenance hangar operated by Avjet Asia. China market and the potential of the Korean market. From there, Avjet Asia was born, offering multi-lingual, multi-national operational support Korea now has the potential of being a major transit stop within around-the-clock. Northeast Asia because it is located two hours from major cities such as Beijing and Tokyo. We see good growth prospects for business aviation In 2016, the Avjet Asia team was at the forefront of opening Korea’s here in Korea. first fixed-based operation (FBO) in Seoul. Working with Korea Airports Corporation (KAC), the FBO has allowed Korea to become a business What services does Avjet Asia provide? aviation hub, as well as providing the country with the right tools to continue to develop its industry. As the first and only FBO in Korea, Avjet Asia provides services that are dedicated to business jets. To fulfill this, we have continuously put in effort to develop a well facilitated FBO. Why did Avjet come to Asia and specifically Korea?
With a growing number of business jets in the Asia-Pacific region, we We offer all the necessaries for a smooth flight, all done under believed a dedicated facility was needed in the Korea. experienced experts from the Flight Support Team and Aircraft Maintenance Team. Requests for permits and permissions, flight plan Operating 14 Airports in Korea, KAC agreed to the construction of an FBO filing and slot coordination are responded to 24/7 and secured at a but was new to the concept and operation. They requested concrete and suitable time. For ground handling, we provide all the requirements abstract assistance from Avjet Asia, because our staff has extensive including full ramp services, VIP escort, aircraft cleaning and refueling, experience with ground handling and flight support services. Avjet Asia in-flight catering, hotel booking, and transportation arrangement. was fully involved in the process — from the conceptual ideas of the FBO, to the required environment and equipment, operational issues, and safety measures.
22 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
We have our own equipment designated for business jets available, including a towbarless tractor, oxygen, nitrogen, LAV, and POT. We have secure parking spots committed to business jets in front of our hangar. Before the FBO Apart from supervisory agents, we also provide end-to-end services by allocating our staff to crew and passengers respectively. opened, there was no Our maintenance hangar is available for aircraft parking and minor facility designated for maintenance work. Fully integrated, the 5,130m2 hangar can accommodate six G550s, as well as overnight or long-term hangar business jet travelers, storage. We also have FAA AMP-licensed engineers. meaning that one-stop What challenges were business jet travelers faced with, prior to the new FBO? FBO services were not Before the FBO opened, there was no facility designated for business available in Korea. jets travelers, meaning that one-stop FBO services were not available in Korea. Speedy, private CIQ procedures were unavailable, so passengers and crew had to clear CIQ at the commercial terminal with commercial passengers. Also, amenities that are available in FBO terminals such as crew/passenger lounges, conference areas, and relaxation rooms were not available.
There was no ground support equipment for business jet and no other option but to use airline facilities and equipment for ground handling. Parking spots purposed only for business jets were limited, making it hard for ground handlers and agents to secure spots for the aircraft.
How has the new FBO improved Korea’s business aviation industry?
Functioning as a VIP terminal, the SGBAC improved the business aviation industry by giving a positive flight What are some of Avjet Asia’s latest successes in the experience to travelers. Time-effective CIQ procedures with privacy market? guaranteed, as well as the aircraft in safe hands led to an improvement With the dedicated facility, we have been able to handle all flights in customer experience. The reaction from the local aviation industry including private jets with a larger number of passengers, including and customers is very positive. China’s national football team. We’ve also provided a high level of privacy to celebrities and other highly recognizable individuals that need such What can business jet travelers expect from the FBO? services fast, particularly efficient CIQ clearance.
From the fixed structure, travelers will be provided a less than 10-minute We have initiated a program to develop maintenance work for business CIQ clearance through the FBO. Other amenities include an open lounge, jets. With an FAA-certified maintenance team, we provide maintenance three private lounges for crew and passengers, shower and relaxation support and space, and are in the process of expanding our rooms, conference rooms and a refreshment stand. maintenance capacity by cooperating with local aviation companies. The FBO was specifically constructed at the Gimpo International Airport (RKSS) because of its ideal location just 30 to 40 minutes What are some of the ongoing partnerships Avjet Asia from Seoul’s downtown district, making it easy to access the city. The has developed? airport also provides ample parking stands and plenty of slots. Avjet Asia has a partnership with KAC under a ten-year contract, Clients that are traveling at length in Korea and require parking can operating the maintenance hangar. We are planning to attend 2017 also use the FBO at RKSS. Unlike other airports in Korea, hangar space ABACE (April 11-13, 2017) with a joint operating booth to promote the is available for overnight and long-term. SGBAC and FBO services.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 23 INDUSTRY INSIDER
Avjet Asia is expecting to join the Air Elite Network during the first We know we have the half of this year. We are proud to be the next to join in Northeast Asia, potential to be more. following Deer Jet, to add to the value of the network. Avjet Asia also collaborates with five-star hotels in Korea for in-flight With our expertise and catering. We provide the best of services to travelers, and consider the catering experience important as well. We offer a wide-range of menu wealth of experience, choices to meet specific tastes, requirements and dietary restrictions. we will show how What can the industry expect from Avjet Asia over the Korea’s business next few years? As the first and only FBO in Korea, Avjet Asia is becoming more involved aviation market will with the planning of other FBOs, and continuing to expand and develop within the region. We aim to provide the best quality ground handling develop. services by advancement in both human resources and maintenance/ GSE equipment. We also expect a demand for aircraft to be based in Korea from nearby regions, and will provide the required services and requirements for assistance.
We anticipate our business will expand to aircraft maintenance and management. We know we have the potential to be more. With our expertise and wealth of experience, we aim to lead the development of Korea’s business aviation market.
www.avjet.kr
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FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 25
GJCP 21270 - Asian Sky Ad - Dec 2017.indd 1 1/5/17 11:46 AM ENSURING ALL YOUR CHARTER NEEDS ARE MET INTERVIEW WITH MR. SEONGBAE CHO, KOREAN AIR BUSINESS JET SENIOR VICE PRESIDENT Interview by Litalia Yoakum
ffering flexible schedules, hassle-free boarding, maximum Global Express XRS provides 12-13 spacious seats which include a and ultimate safety, Korean Air Business Jet was convertible sofa-bed which allow passengers relief from fatigue during O established in 2007 to cater to the growing demand long-distance travel. from clients, including foreign dignitaries, senior executives and celebrities. Today, the charter division of Korean Air has grown Our newest aircraft, a G650ER, is one of the most beloved business to become one of the largest operators in the country, and in jets in the world for its extended long-range performance as well as its Northeast Asia. Clients can now expect an easy-to-access charter spacious and sophisticated interior, featuring panoramic windows and service committed to meeting every need. 12-13 seats, including convertible bed seats that offer passengers the utmost comfort. These aircraft ensure passengers will have the most How did the business jet division of Korean Air come premium experience from Korean Air. about? What are some of the requirements for a charter operator Korean Air, as the national carrier of the Republic of Korea (ROK), is in Korea? performing a pivotal role in enhancing Korea’s growing reputation in the aviation industry. As of 2016, Korean Air owns 160 aircraft and operates In Korea, it is more common for operators to use commercial aircraft scheduled flights to 131 cities in 46 countries worldwide. The airline than small aircraft for charter operations. Therefore, the related established the Private Charter Business Department in 2007, which regulations are similar to those of commercial aircraft charter. exclusively manages the commercial charter sales and operations. At that time, the company only owned one corporate G-IV jet, and today In addition, most of the charter operations are international flights and Korean Air is one of the leading operators in Northeast Asia with five thus, the entry barrier tends to be very high. Currently, there are eight business jets and seven helicopters. international carriers registered, including Korean Air, and five operators who are registered with small aircraft of less than 50 seats. How large is the business jet fleet and what aircraft models are included? Moreover, due to the special circumstance that South and North Korea are divided, most of the small domestic airports are controlled by the Korean Air currently operates a fleet of five business jets for customers ROK Air Force, and therefore only pre-registered aircraft, such as Korean – two BBJ, two Global Express XRS, a brand-new G650ER. Air Business Jets, can depart and arrive for domestic routes. Our BBJ has a special seating feature which can be customized to accommodate 16 seats or 26 seats, per our clients’ needs. The
26 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
Under this requirement, Korean Air is one of the operators that Confidence in airline safety: With a history of 48 years and experience in can provide international-domestic services that connect the main extensive training, Korean Air has strong background and experience to international airports, such as Incheon, Gimpo and Gimhae, directly offer passengers safe flights with the utmost comfort. with local cities using our business jets and helicopters. Recently, we are seeing an increase in customer inquiries for jet services to the Excellence of Service: At the airport, our dedicated staff will directly cities located near Pyeongchang, where the 2018 Winter Olympic assist VIP customers from check-in to boarding to ensure their travel Games will be held. experience is simple and quick. Our unsurpassed in-flight service is well- supported by a group of attentive cabin attendants, all specially trained What is the target market for Korean Air Business Jet? to offer customers the best service.
CEOs and senior executives of global companies are our key customers, In-flight dining: Delicious and memorable, our award-winning meals are while famous international celebrities and leaders of nations also use created by a team of chefs de cuisine using the finest ingredients to our business jets to travel around Asia attending special events. Korean tantalize the palates of our customers. Air is always continuing to develop possibilities for new markets and customers.
How does the business jet division differ from some of the other charter companies on the market? Incomparable professionals: Our well-experienced pilots are what we As a premium airline, define as the critical differentiator. They are trained not only for business jets but also for other aircraft, which creates an all-rounded crew for Korean Air puts service the airline. They can handle different situations flexibly, regardless of whether it is a short-haul or long-haul flight. As a leading airline quality as the most company, which houses a well-reputed infrastructure for training and maintenance, Korean Air can assure travelers will have a pleasant trip important factor. We delivered by our professionals. are very responsive to Cost-effective and seamless connection: Passengers can schedule their journeys smartly by combining our business jet service and regularly customers’ feedback scheduled flights, enabling them to experience our seamless one-stop connection. For instance, if a passenger wants to travel from New York and are always ready to Hong Kong, he or she may choose to fly with our scheduled flight from New York to Incheon in our first-class cabin, well-known for its to listen. luxurious service and spacious seats. In no time, the passenger can continue his or her journey with our business jet, which will be waiting at the airport for the passenger. This is a cost-effective and timesaving option, optimized to fit our clients’ needs.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 27 INDUSTRY INSIDER
What does Korean Air Business Jet do to ensure that a client is satisfied on each flight?
Korean Air Business Jet puts service quality as our most important factor. Therefore, we are very responsive to customers’ feedback and are always ready to listen. We believe that satisfying our customers is a top priority and the ultimate goal for the company.
What is the company doing to keep up with hi-tech and constantly connected clientele?
We have a dedicated desktop and mobile website for Korean Air Business Jet, which provides customers easy access to Biz Jet charter service offerings. Our mobile site has specific information about our fleet including pictures and specifications in six different languages –Korean, Japanese, Chinese (Mandarin and Cantonese), Russian and English. Additionally, customers can easily send their inquiry by clicking just one button on our mobile site, ensuring the utmost convenience. This way, we can stay connected to our customers of diverse global markets and the growing needs of the industry.
Korean Air is the only business jet operator in the Korean market and it is a key driver contributing to the expansion of the What does the future hold for Korean Air Business Jet?
business jet market. Korean Air is the only business jet operator in the Korean market and is a key driver contributing to the expansion of the whole business What are some of the successes the company has jet market. We expect the demand for business jet operations in achieved over the last year or two? Northeast Asia will continue to grow constantly.
Providing a one-stop solution covering all processes from aircraft bizjet.koreanair.com maintenance, ground service and to operation, Korean Air has been providing long-term charter contracts with our regular customers for several years. These are encouraging results for us to establish a fixed and stable passenger demand and driving further business. Recently, we introduced our latest aircraft, G650ER, which strengthened our competitiveness in the market.
Are there any challenges that the business aviation industry in Korea faces?
Unlike the advanced business aviation markets in North America and Europe where there is stable demand, the Korean market is likely to be influenced by external factors such as political and economic factors. Furthermore, Korea has a relatively low domestic demand due to the small territory and it is also lacking in airport infrastructure and dedicated facilities for business aviation .
28 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 ADVOCATING FOR CLIENTS’ INTERESTS INTERVIEW WITH PAUL JEBELY, PILLSBURY WINTHROP, MANAGING PARTNER Interview by Litalia Yoakum
he son of a Captain and a Flight Attendant, Paul Jebely is rated as the top business aviation lawyer in Asia by Chambers & Partners (and one of T the top four worldwide). He is counsel to some of the world’s wealthiest business aircraft owners and their financiers. With hundreds of transactions and even numerous repossessions under his belt, the 36 year-old Managing Partner at Pillsbury Winthrop is described by his peers as someone who “knows the industry on a global scale.”
Tell me a bit about your background and how you ended In terms of the legal profession, I made my way up the ranks extremely up at Pillsbury Winthrop? quickly as I worked in Toronto, Kuwait, London and Hong Kong. I made equity partner at a major law firm in less than 6 years, and was global I grew up around aviation, but not around white collar work. I played practice head by the following year. I did a part-time executive education competitive sports and wanted a professional athletic career, but program over two years at Stanford, which I credit/blame for implanting somewhere around the time that I saw my name listed next to the in me the desire to build something from the ground up. So, in May number 318 in the professional (American) football draft I realized that 2016 my team and I launched the Hong Kong office of a venerable 150 I had definitely made the right decision going to law school. I also did year old American law firm, Pillsbury Winthrop. Arguably, the mental some multi-engine flight training and could have easily gone that route state needed to make equity partner by the age 31 or to leave a very like my father, but I instead parlayed my love of aviation into a career as comfortable situation at 35 to launch a new “start-up” enterprise are not an aviation lawyer.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 29 INDUSTRY INSIDER
palatable for most but, simply put: I love what I do. To me, this is a hobby desired outcomes while preserving goodwill between the commercial first, a business second, and a job third. parties. It also includes ensuring that the client is afforded actual legal advice and has the full situational awareness of the transaction terms necessary to sign on the proverbial dotted line. What range of services can you personally provide for business aviation clients? A very close but firm second to advocacy is ensuring execution – with the highest transaction velocity the situation permits in order to get the Business aviation is at the core of my legal practice, and I am privileged deal closed on favorable terms. I am aware that some may prefer if enough to get to do a wide range of work that I enjoy for major clients lawyers take the reverse view of priorities, taking a purely mechanical all over the globe on a constant basis. execution role. I generally respond by saying something like “no domo Being among a rare breed of aviation lawyers that are both English and arigatio, Mr. Roboto!” New York law-qualified, I typically serve as lead counsel on any variety of business aircraft purchase, sale, management, lease and finance What is the biggest hurdle that you face in your own transactions. If an aircraft-owner client wishes, this can include what I business? call “tip to tail legal service” that also covers advice on optimal ownership structures, choice of aircraft registry, warranty/maintenance contracts, To quote Oscar Wilde: “Nowadays people know the price of everything, aircraft charter and other shared use arrangements, pilot contracts, and the value of nothing.” The value that a strong and seasoned review of insurance policies and so on. I also handle restructuring, business aviation lawyer can add on behalf of his or her client commercial disputes and enforcement scenarios when the need arises should not be understated, though it increasingly is. There can be a – as it increasingly has over the past few years. dismissiveness and/or fear of the involvement of such lawyers on transactions by counterparties or intermediaries, sometimes diffuse, sometimes virulent, usually misguided. It is, therefore, often necessary When representing a client on the purchase, sale or to spend time ingratiating with, and calming the nerves of various types finance of an aircraft, what is your main goal? of characters in order to be more effective in advocacy and execution on I like to say that the best lawyers are the ones who live in the blank white behalf of clients. spaces in between the lines and at the edges of contracts. In that light, my main goal on such transactions is good old-fashioned advocacy. What is the best advice you can offer business jet “Advocacy” does not mean playing a zero-sum game – indeed effective purchasers publically? negotiation is often not just about what you take from the table, but also My best advice for any purchaser is: “Please Be Advised.” Just as it is what you leave on it. It all should come packaged in as diplomatic and often better to wait for the common sense of the morning to prevail courteous a wrapper as the situation demands in order to attain the before doing something drastic, it is often better to seek professional advice before signing something drastic. In that light, do not sign The best lawyers are Letters of Intent on the assumption that they do not constitute legally binding obligations, because very often they do. I have seen, from both the ones who live in the sides of the table, many situations where an owner has not sought professional advice (be it from an experienced broker or lawyer) before blank white spaces in legally committing him or herself to the purchase of a new or used aircraft in this manner. In my experience, those scenarios can result between the lines and at in a calamitous failure to ensure a “meeting of the minds”, which then results in a cascade of misinformation, misunderstanding and the the edges of contracts. occasional misdemeanor.
What is the current forecast for this industry in Asia Pacific?
Cloudy, with a chance of charlatans.
What are some of the challenges facing the industry in the Asia-Pacific region?
The Asia-Pacific region today is an intoxicating place and time for this industry. The party can and does end quickly, however. The main challenge we face is the enormous amount of systemic uncertainly that can swiftly and severely impact the industry. Compare, for example, new sales activity in China today versus even three years ago. No one could have forecasted the degree to which such activity has slowed.
30 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
While such macro-level economic trends are outside of the control of market finally does truly take off and say “I totally called that!” I have done even the most powerful in the industry, the key micro-level challenge a not-insignificant number of African transactions in the interim, but the as I see it remains the lack of seasoned human capital. This itself is signs of market distress are clearly evident to me at this juncture, in nothing new, but what is new and particularly challenging is that the gap large part due to the fall in commodities prices that has had a significant between what some market participants actually know and what they impact on African wealth. Compounding this are infrastructure issues say (and maybe even think) they know is growing alarmingly wide. What that continue to plague African business aviation and African aviation is more, business aviation in the Asia-Pacific region is not, for example, more generally. Still, the African continent has plenty of (mostly paved) basketball, where the game is played by the same basic rules by those runway ahead of it. who play the game. Still, it does not serve anyone’s interest to dwell on or be overly public about such complexities What are some of the successes the firm has seen since you opened in Hong Kong, and what are your expectations for the firm in the next few years? Asia-Pacific today is I take extreme ownership of everything in this respect. Our Hong Kong office, in the SoHo district, has been open for less than a year, and the an intoxicating place tiring but fulfilling work of systematically building a profitable law office is already well-advanced. We have, for example, already assisted on over and time for this $1 billion worth of business and commercial aviation transactions for existing and many new clients, including some of the most well-known industry. corporations and individuals in Asia and elsewhere. Our office’s other key practice areas are private wealth and white collar crime, and we are growing both areas alongside our team of five aviation In 2015 you received a lifetime achievement award lawyers. We have great support from our peers across Pillsbury’s two for “Outstanding Contribution to African Aviation offices in Mainland China, our office in Tokyo, and our 17 other offices Development”. Where do you see business aviation in cross the US, UK and UAE. There can be no leadership where there is no team, and I am blessed that today I can surround myself with a Africa going? squadron that is both first class and first in its class. In 2010 I was quoted by the Financial Times as saying “I’m certainly quite bullish about African business aviation.” While I do not think any www.pillsburylaw.com will ever accuse me of suffering from a lack of confidence generally, I was perhaps a bit too early in my confidence in this respect. That said, it is one of those quotes that I can point to even in 10 years if/when the
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 31 MARKET DYNAMICS
PRE-OWNED BUSINESS JETS FOR SALE
INVENTORY VALUE (USD)
$8,244M APR 2016
WORLDWIDE $7,772M $7,206M NOV 2016
$1,536M $6,512M JUN 2016 ASIA PACIFIC $1,234M $991M
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2015 2016 2017
The Inventory Value Line represents the number of aircraft actively being marketed for sale in USD terms.1
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 as 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 TREND
NEUTRAL ZONE
SUPPLY IMBALANCE
AIRCRAFT SOLD 34 30 25 26 25 26 25 24 24 22 21 21 21 20 19 18 16 17 14 15 13 15 11 10
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2015 2016 2017
1 ASG’S INVENTORY VALUE LINE IS CALCULATED BY TAKING THE TOTAL NUMBER OF AIRCRAFT FOR SALE FROM A SELECTION OF 26 DIFFERENT MODELS, MULTIPLIED BY THEIR AVERAGE ASKING PRICES.
Source: JETNET & ASG 32 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET DYNAMICS
AVERAGE ASKING PRICE
28
27
26 MILLION USD MILLION ASIA PACIFIC 25
24
23
22
21 WORLDWIDE 20
19
18 Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
% OF FLEET FOR SALE
14%
13% ASIA PACIFIC
12%
11 %
10% WORLDWIDE
9%
8% Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
AVERAGE DAYS ON MARKET
420
400
380 ASIA PACIFIC
360
340
320
300
280 WORLDWIDE
260
240
220 Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 33 MARKET DYNAMICS
SUPPLY / DEMAND INDICATORS BUSINESS JETS 2017 Q1
SUPPLY VS. DEMAND RATIO AVERAGE DAYS ON MARKET
SUPPLY > DEMAND TIME ON MARKET % OF FLEET MODEL FOR SALE
NO TRANSACTIONS 20.0% ACJ318
8.5% AIRBUS ACJ319
12.1% BBJ
9.1% BBJ2 BOEING
11.0% CL604
8.7% CL605
8.8% CL850
8.4% GL5000 BOMBARDIER
5.5% GL6000
20.1% L600
15.1% L650
NO TRANSACTIONS 20.7% EMBRAER L1000 AVERAGE
12.2% F2000LX
11.9% F7X
NO TRANSACTIONS 4.2% F900DX
11.9% F900EX AVERAGE DASSAULT
10.0% F900EXe
17.0% F900LX
12.2% G200
6.1% G280
8.2% G450
6.9% G550 GULFSTREAM 7.0% G650
6.6% G650ER
400% 300% 200% 100% 0 9.7% 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 This has been seen most acutely in certain Gulfstream models, in terms of supply and demand balance (based on a ratio of completed including the G450, G550, and G650, as well as the Falcon 7X and the transactions compared to the number of sellers, and average number Bombardier Global 6000 and C605, with each seeing more transactions of days on the market for a transaction to take place). relative to the number for sale, and requiring less time on the market for sellers to complete a transaction. While the market indicators shown on the previous page continue to show negative trends, the decline in pre-owned asking prices These pockets of market stability are reflected in the continuing appears to have stimulated increased demand for certain models, decline in the overall amount of inventory for sale in the market and the leading to an increase in transactions and a more balanced state of percentage of the available fleet for sale. supply and demand. However, even as certain models are stabilizing, the remaining supply These indications do not necessarily mean prices will be higher in the of inventory is taking longer to sell and experiencing declines in future, but it does indicate that sellers of these particular models are asking prices. more likely to find willing buyers in a shorter period of time than the overall average.
Source: JETNET & ASG 34 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET DYNAMICS
MARKET POSITIONING BUSINESS JETS
SUPPLY IMBALANCE Balanced DEMAND IMBALANCE Supply & Demand
ACJ318
AIRBUS ACJ319
BBJ 1
BBJ 2 BOEING
CL604
CL605
CL850
GL5000 BOMBARDIER
GL6000
L600
L650
EMBRAER L1000
F2000LX
F2000LXS
F2000S
F7X
F900DX DASSAULT F900EX
F900EXe
F900LX
G200
G280
G450
G550 GULFSTREAM G650
G650ER
The above chart provides a visual representation of the Supply / When taking into account these four factors, the Bombardier Global 6000 Demand Ratio of each aircraft model relative to the overall market, and and Challenger 605, the Falcon 2000 class and the various Gulfstream resulting from a ‘Marketability’ calculation for each particular model models appear well positioned to find buyers available. based on the following four market indicators: * ASG chose 26 popular aircraft models as described in this report 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: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 35 MARKET DYNAMICS
PRE-OWNED CIVIL HELICOPTERS FOR SALE
INVENTORY VALUE (USD)
$1,244M
WORLDWIDE
$775M $1,536M $120M JUN 2016 ASIA PACIFIC $119M
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2015 2016 2017
The Inventory Value Line represents the number of aircraft actively being marketed for sale in USD terms.1
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 as 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 TREND
NEUTRAL ZONE
DECLINE
SUPPLY IMBALANCE
AIRCRAFT SOLD 15 12 11 10 10 8 8 7 7 7 7 7 7 6 5 5 6 6 5 4 4 4 2 2
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2015 2016 2017
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: JETNET & ASG 36 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET DYNAMICS
AVERAGE ASKING PRICE
7
6.5 MILLION USD MILLION ASIA PACIFIC
6
5.5
WORLDWIDE 5.0
4.5
4 Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
% OF FLEET FOR SALE
5.5%
5.0% ASIA PACIFIC
4.5%
WORLDWIDE 4.0%
3.5%
3.0% Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
AVERAGE DAYS ON MARKET
600
550
500 ASIA PACIFIC
450
400 WORLDWIDE
350
300 Mar Jun Sep Dec Mar Jun Sep Dec Mar 15 15 15 15 16 16 16 16 17
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 37 MARKET DYNAMICS
SUPPLY / DEMAND INDICATORS CIVIL HELICOPTERS 2017 Q1
SUPPLY VS. DEMAND RATIO AVERAGE DAYS ON MARKET
SUPPLY > DEMAND TIME ON MARKET % OF FLEET MODEL FOR SALE
20.0% S76C+
8.9% S76C++ SIKORSKY
1.8% S92A
3.7% BELL 412EP
2.9% BELL 412HP
4.3% BELL HELICOPTER BELL 429
13.7% AW109E PWR AVERAGE
4.1% AW109SP GN LEONARDO
AVERAGE 2.9% AW139
6.0% AS332L1
4.2% H225
8.4% EC135P2
2.1% EC135T2
1.5% EC145 AIRBUS HELICOPTERS
30.0% EC155B
9.1% H155
350% 300% 250% 200% 150% 100% 50% 0 5.3% 0 100 200 300 400 500 600 700 800 Average Average AC for sale / Total sold in last 12 months
The above chart reflects where certain aircraft models are positioned in to increase, the supply and demand ratio for certain helicopter models terms of supply and demand balance (based on a ration of completed reflects a positive balances. transactions compared to the number of sellers, and average number of days on the market for a transaction to take place). This can be seen most acutely in the Sikorsky S92 (heavy), the Bell 429 and Airbus EC145 (light twin). While the market indicators shown previously continue to show negative trends, and the supply of inventory available for sale continues
Source: JETNET & ASG 38 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET DYNAMICS
MARKET POSITIONING CIVIL HELICOPTERS SUPPLY IMBALANCE Balanced DEMAND IMBALANCE Supply & Demand
S76C+
S76C++ SIKORSKY S92A
BELL 412EP
BELL 412HP
BELL 429 BELL HELICOPTER
AW109E PWR
AW109SP GN LEONARDO AW139
AS332L1
H225
EC135P2
EC135T2
EC145 AIRBUS HELICOPTERS
EC155B
H155
The above chart provide s a visual representation of the Supply / The S92 has benefited from the grounding of its closest competitor, Demand Ratio of each aircraft model relative to the overall market, while the B429 and the EC145 models have retained a favorable ratio resulting in a ‘Marketability’ calculation of each particular model based due to their use outside the oil and gas industry, and the model’s on the following four market indicators: popularity with Governments and EMS providers.
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: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 39 参加亚洲公务航空大会及展览会 (ABACE2017) 、与数以千计 的公务航空领导者、企业家和其他采购决策者齐聚一堂。无论 是对于将公务航空视为商机的投资者或计划使用公务飞机的公 司来说，还是对于长期将飞机作为高价值商业工具的航空部门来 说， ABACE2017 都是最佳的理想去处。请您预留出参展时间， 您也可访问 ABACE 官方网站以获取更多信息。
Join thousands of top business aviation leaders, entrepreneurs, and other purchase decision-makers for the Asian Business Aviation Conference & Exhibition (ABACE2017). This is the perfect venue for investors considering aviation as a business opportunity; companies thinking of using an aircraft for business; and flight departments who have long used aircraft as a valuable business tool. Visit the website to learn more and register today.
REGISTER TODAY www.abace.aero
40 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 AIRCRAFT SPOTLIGHT GLOBAL XRS/GLOBAL 6000
With over 50 years in the industry, aircraft manufacturer Bombardier boasts one of the largest lines of business jets of any original equipment manufacturer (OEM), with three leading aircraft families - Learjet, Challenger and Global. In 2005, Bombardier added to the fleet with the Global Express XRS, upgraded from the already successful Global Express.
After introducing the Global 5000, Bombardier then launched a rebranded version of the Global Express XRS — the Global 6000. Similar to the 5000 variant, the Global 6000 immediately makes customers aware of its range through its name.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 41 AIRCRAFT SPOTLIGHT
GLOBAL XRS AND 6000 MARKET CONDITIONS - PAST 12 MONTHS Global 6000 Global XRS 700
600 $518M 500 $439M 400 $349M $421M 300 No. for Sale X Avg. Asking PriceNo. for Sale X Avg. Inventory Level 27 28 28 26 26 26 25 23 22 22 24 22 19 13 13 15 13 10 12 11 12 8 8 6 6 No. for Sale 5
Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17
FLEET AGE DISTRIBUTION 8+0+00+23+0 6+0+0 0+22+0 6+0+00+22+0 5+0+0 0+24+0 8+0+00+26+0 10+0+0 0+26+0 12+0+0 0+26+013+0+0 0+27+011+0+0Global0+25+013+0+0 XRS 15+0+00+28+0 0+28+0 Global 13+0+00+22+0 6000 12+0+00+19+0 60
50
40
30
20
10 No. of Aircraft in Operation 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The ultra-long-range Global Express XRS is powered by two Rolls- Specifically designed to provide a highly productive working Royce Deutschland BR710A2-20 turbofan engines, allowing it to fly environment, the 6000 offers more cabin volume and floor space transcontinental and intercontinental flights with a 6,100+ nautical-mile than any other business jet in its class. With one of the widest cabins, range. Its long-range speed is Mach .85, while its high cruise speed is measuring almost a foot (30cm) wider than the nearest competitor, the Mach .89. 6000 aircraft provides plenty of room. Maximum seat configuration allows up to 19 passengers and two crew members. Passengers have Measuring 6.25-feet high, 8.17-feet wide and 48-feet from front to back, access to Wireless Access Virtually Everywhere (WAVE), leveraging the XRS’ cabin provides ultimate space and comfort in any configuration, the latest satellite communication technology to provide in-flight, high- with a maximum seat configuration of 17. The XRS is typically outfitted speed internet access. Bombardier WAVE also comes as a retrofit option with an aft stateroom, a separate main cabin and ample galley. for Global XRS as well. Passengers have access to an Ethernet-based Cabin Electronic System with on-board LAN & wireless LAN. Announced in 2010, the Global 7000 and Global 8000 are now under development by Bombardier. The 7000 will deliver speeds of up to Mach Keeping in mind the importance and comfort of the flight crew, the Global 0.925 with a range of 7,400nm, while the 8000 can travel up to 7,900nm. XRS is equipped with the Rockwell Collins Proline Fusion avionics suite and includes Bombardier’s 3rd Generation Enhanced Vision System With plans for the Global 7000 to start deliveries finally in the 2nd half (BEVS), a head-up flight display system and Synthetic Vision System. of 2018 and the 8000 indefinitely delayed, after initial market entry expectations for 2016 and 2017 respectively, Gulfstream’s comparable After introducing the Global 5000, Bombardier then launched a G650 and G650ER, as well as the Falcon 8X, now have the market rebranded version of the Global Express XRS — the Global 6000. covered where initially the new Bombardier models had hoped to reign. Until the Globals arrive on the scene, the 6000 will continue production, Including the same and enhanced features as the XRS, the 6000 albeit at reduced production rates, with prices likely to drop even further boasts the same Rolls-Royce engines, as well as advanced avionics closer to the final unveiling of the new models. Whether Global 6000 and cabin communications. production will continue past the arrival of the 7000 is unknown at this time. This announcement would further depress short term sale prices At a maximum operating speed of up to Mach 0.89, the Global 6000 and subsequently impact long term residual values. The two model supersedes the high-speed range capability and mission flexibility serve different market segments though with different price points so delivered by other business jets in its class, with the ability to link for expectations are the 6000 will be around still for many years to come. instance, Moscow to Los Angeles non-stop.
42 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 AIRCRAFT SPOTLIGHT
PRE-OWNED GLOBAL XRS & 6000 FOR SALE
REF YOD ASKING PRICE (USD) ASKING PRICE (USD) AFTT DAYS ON MARKET* PAX 1 6000 2016 $44,900,000 60 145 13 2 6000 2015 $48,900,000 100 104 13 3 6000 2014 $32,250,000 444 504 16 4 6000 2014 $42,000,000 325 186 14 5 6000 2013 Make Offer 911 39 16 6 6000 2013 $39,500,000 119 9 144 16 7 6000 2013 $34,700,000 1900 310 13 8 6000 2013 $34,950,000 519 278 15 9 6000 2012 $31,900,000 2766 122 14 10 6000 2012 $33,750,000 1474 151 13 11 6000 2012 $28,500,000 115 0 788 16 12 6000 2012 $31,500,000 1530 238 14 13 XRS 2 011 $24,000,000 1685 290 15 14 XRS 2 011 $24,950,000 2150 1064 15 15 XRS 2 011 $22,000,000 2760 439 12 16 XRS 2 011 Make Offer 112 5 249 14 17 XRS 2010 $25,000,000 1695 517 13 18 XRS 2010 $22,000,000 4397 133 13 19 XRS 2010 $23,000,000 2479 298 14 20 XRS 2010 $20,950,000 2450 365 13 21 XRS 2010 Make Offer 117 0 542 14 22 XRS 2009 $22,000,000 4343 69 13 23 XRS 2009 $22,000,000 1620 405 14 24 XRS 2009 $21,000,000 2350 256 13 25 XRS 2009 $24,000,000 1544 27 13 26 XRS 2008 Lease Only 3483 333 15 27 XRS 2008 $15,250,000 3850 319 13 28 XRS 2008 Make Offer 3525 447 14 29 XRS 2007 Lease Only 3860 195 14 30 XRS 2007 $19,800,000 2937 711 13 31 XRS 2007 $21,950,000 3658 712 14
PRE-OWNED GLOBAL XRS & 6000 PRICE VS AGE - TIME SCORE
50 2
ASKING PRICE 45 1 ESTMATED ASKING PRICE
4 40 6
35 8 5 7 3 12 9 30 16 11 21 25 14 17 13 25 Asking Price (M USD) 19 15 23 18 22 31 20 24 20 30 28
15 27
10 Age Time Score (2x Year of Manufacturing + Airframe Time)
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 43 AIRCRAFT SPOTLIGHT
GLOBAL MARKET CONDITION BY REGION
Global XRS Global 6000
Europe
47 94 North America 10 9 16 7 78 92 4 141 10 67+33+G 5 6 170 Currently Currently Sold Past 54+46+G for Sale In Operation 24 months Currently Currently Sold Past for Sale In Operation 24 months
Asia Pacific & Middle East 18 13 Sub-Saharan Africa 31 4 2 3 2 2 2 42+58+G Latin Amer. & Carib 4 Currently Currently Sold Past for Sale In Operation 24 months 15 16 50+50+G 31 Currently 1 3 In Operation 53+47+G Currently Sold Past In Operation 24 months
GLOBAL XRS & GLOBAL 6000 BUYERS’ LOCATION DISTRIBUTION
The worldwide Global XRS and 6000 fleet stands at 377, with 7.7% (29) Latin Amer. & Carib 4 (8%) North America 26 (51%) of those currently for sale. Five of these are pending contracts, which Asia Pacific & Middle East 5 (13%) comes after weak trading over the past four quarters. The relatively low inventory number for sale in today’s market is on par with comparable business jets, including the G650, which suggests owner satisfaction and good utilization of 6000 and XRS models. Of those for sale, 10 of PAST 24 these are based in the US, five in Russia and four in the UK. MONTHS
The average asking price of the Global XRS, as of February 2017, was Western Europe 16 (31%) 22M USD, a decrease 2M USD from March 2016, which is typical when considering the annual depreciation rate for the XRS is about 8-10%. An 51+31108+G the market. The lowest amount of time spent on the market since then Global XRS spends an average of 308 days on the market, down from was 189 days, in November 2016. 339 in March 2016.
Since its introduction in 2011, Bombardier annually upped production The XRS has enjoyed almost a decade of sales, meaning the fleet is 6000 units. In 2015 though, with new competitors coming onto starting to undergo 10-year inspections and gear overhauls. Prices may the market, delivery numbers decreased. The 6000 will likely trade now begin to depreciate faster therefore depending on how inspections more actively once seller expectations align better with updated go. Typically, once these aircraft reach the 10-year mark, owners are depreciation forecasts. Buyers are beginning to see value in the low- likely to sell for a newer aircraft. Most activity will likely be in the 16M- mid 30M USD inventory. 20M USD range. For an XRS around 10 years old, 22M USD is the expected asking price, with 20M USD being the expected final sale price. In the past 24 months, a combined 51 XRS’ and 6000s have been purchased. Over half of those transactions are from buyers based in Currently, the for-sale aircraft are showing an average year of manufacturer North America, while only 10% are in Asia Pacific and the Middle East. (YOM) of 2009-2011. These current listings are younger, compared to the recently sold aircraft. This indicates that the 10-year old fleet is more The last 12 months have seen a combined 23 XRS and 6000 models popular, leaving the younger models on the market for a longer time and sold, but with eight of those in the past three months. The G550 with a consequently having to readjust prices to be competitive. worldwide fleet of 534 and 6.9% for sale, has seen 34 units sold in the past 12 months, but with only four selling in the past three months. So A similar pattern can be seen with the G550, with aircraft right around 10 although Bombardier’s inventory for sale is slightly higher, the XRS and years having seen recent transactions in the sub-20M market. 6000 are selling quicker. The average asking price for the Global 6000, as of February 2017, was www.businessaircraft.bombardier.com 37M USD, a decrease of 5M USD from March 2016 when the average price was 43M USD. A 6000 spends an average of 277 days on the market, up from March 2016 when it spent an average of 216 days on
44 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017
GLOBAL XRS & GLOBAL 6000 BUYERS’ LOCATION DISTRIBUTION
in more than 27 countries, and a fleet of more than 135 aircra on lease, coupled with a large ved. ese r C. All rights r es L vi c asing Se r e aypoint L W
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 45 Copyright © 2015 DEVELOPING AN UNKNOWN REGION
INTERVIEW WITH LYNTON VAN ASWEGEN, ASIAN SKY GROUP, SALES DIRECTOR, AFRICA Interview by Litalia Yoakum
ased in Johannesburg, South Africa, Lynton Van Aswegen that NAC had just been appointed as the Gulfstream Representative is the newest addition to Asian Sky Group (ASG), expanding for several countries in Africa. He knew of my love for aviation, and B operations into the relatively unknown African business asked if I would like the opportunity to focus on Gulfstream sales for aviation market. Lynton’s adoration for aviation and a bit of luck led NAC. The rest is history! him into the industry, starting out with as a Gulfstream Representative for a number of African countries. Over the course of his 15 years in The aviation world is very connected, and through the interaction the industry, Lynton has come to see and understand the development with the EMEA Gulfstream Sales Team during my time at NAC, two of business aviation in Africa, the challenges the continent faces and people – Colin Steven and Tarek Ragheb, both at Gulfstream at the its future potential. time, resulted in me being presented with opportunities that further developed my love for aviation. Colin appointed me as the Sales Director for Africa, for Embraer Business Jets at the very beginning of Tell me about your background and how you ended the Business Jet division in 2006. up with ASG? On completing university in South Africa, I entered the corporate world Over the past 15 years, I developed a friendship with Tarek Ragheb, and followed what I thought was my dream, working in corporate who through his role as VP Sales for Gulfstream, and being an African finance and private banking. Life though, often leads you to places that himself, had firsthand knowledge of the challenges faced in selling the soul secretly yearns for. It’s a story that I tell often: Out of the blue, business aircraft in Africa. Africa is a large continent made up of 54 I was offered a role at the well-known National Airways Corporation countries, with many specific challenges, particularly for business (NAC), based in South Africa. I visited NAC Sales Director, Steve Hartley aviation. Tarek is the Founder and Chairman of the African Business on a Monday during 2003, and during that conversation, he told me Aviation Association (AfBAA), an organization set up to help overcome
46 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
some of these challenges. I have been a member of AfBAA since its inception, and through this organization I was introduced to ASG’s Managing Director, Jeffrey Lowe, who eventually paved the way for me to become a member of the growing ASG family. OEMs have been very successful in Nigeria What is the current outlook of business aviation in Africa? with the sale of large The economies in Africa are driven primarily through commodities and are affected by commodity cycles. The collapse of the oil price long-range jets, for instance has severely impacted the economies of those countries dependent on oil. For business aviation, this is most evident in Nigeria which has resulted and Angola, two of the countries that have shown exponential growth in recent years. OEMs had been very successful in Nigeria with the in increased activity sale of large long-range jets, which resulted in increased activity for all elements of business aviation. However, the decrease in the oil price, in all elements of and a new President who is trying to tackle corruption and regulate the aviation industry, these have brought the Nigerian aviation sector to a business aviation. halt.
Political instability in many African countries, the collapse of commodity prices, and the lingering hangover from the financial crisis of 2008-2009 have all resulted in depressed business aviation activity. Compounding this, demo tours to Africa have decreased, leaving the local offices of the OEMs with limited resources to help market their wares. Typically, these tours stimulate interest not only for a particular aircraft, but also in the larger business aviation discussion. While Africa is seen as a growth market of the future, OEMs are forced to allocate resources elsewhere. This has had a significant effect on overall interest in the industry.
While the oil price remains depressed, there seems to be an increase privately owned jet in Nigeria. He quickly outgrew the Premier, and in the demand and price of other commodities, which points to an upgraded to a Hawker 800XP. He now owns and operates six aircraft improving scenario for global and developed economies. African GDP in Nigeria, and owns a company that was one of the first to be formally growth often lags that of developed economies, and so hopefully in granted a fully regulated AOC. He has set up an AMO for one OEM the coming years, we will see this growth becoming evident in Africa. and is also now the Representative for another OEM. Since the arrival Most African countries are intent on making their economies less of his Premier 1, the business jet fleet in Nigeria has grown to more dependent on commodities and exposure to the commodity cycle, and than 100, and it is not uncommon to arrive at Abuja’s airport to find the with the aim of increased industrialization, should follow with a more ramp packed with more than 50 business jets. predictable GDP growth in the future, which will translate into growth in the business aviation sector. This rapid growth was a catalyst for aviation-related businesses, such as FBOs, MROs and charter operations. As is always the case with rapid sales activity, other support activities lagged, and How has the industry evolved in Africa over the this caused some frustration to owners and operators. In addition, course of your work here? regulations for charter operations were non-existent, and then An excellent example of this is the growth of business aviation in once regulated, were not easily enforced, which allowed for a “grey Nigeria. In 2003, NAC delivered a brand new Beechcraft Premier 1 market” to develop. This had an adverse effect on the regulated to a well-known Nigerian businessman, who is now also a founding operators who had higher costs. member of AfBAA. His is a wonderful story: On a commercial flight from Nigeria to the US, he was reading a magazine and came across an article for the Eclipse Light Jet, and the market of the very light jets. What are some of the other challenges the industry This sparked his interest, but on investigating, he found out that the faces in Africa? Eclipse was several years away from certification, and he had decided When people talk of Africa, it is often referred to as one place – but he wanted an aircraft immediately. Of the aircraft that were available, there are 54 countries, and all have different regulatory environments, he chose the Premier 1. When it was delivered to him in Nigeria, there cultures, languages etc. That makes it a challenging continent to were only seven business jets based in Nigeria, and those seven were operate in. all operated by the Government and related agencies. His was the first
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 47 INDUSTRY INSIDER
Business aviation infrastructure is also severely lacking. It would be difficult to sell a light jet in Kenya, for example, when the closest With much of business service center may be in South Africa, which may be as many as three stops away. This often results in a classic “Chicken & Egg” aviation still in its scenario: A buyer may want a service center in country before making a commitment to buy, and an OEM may need critical mass (or a single infancy in many African sale) before considering this. It is not often that a first time buyer, (which will be the scenario in order to see growth in the business countries, it can be aviation market in Africa) will buy a $50 million long-range aircraft as his first purchase. Most will likely start small and move up, but this will challenging to find require more service centers around the continent. Given the size and scale of Africa, this is going to be a challenge that will take time and qualified crew. considerable investment to solve.
The ability to finance aircraft that are based in Africa can also be a challenge. Most financial institutions insist on the aircraft being managed by a reputable management company, and such companies are few and far between. One possibility of solving this is via a digital platform that can track all matters related to the aircraft, thus providing data that can be relied upon by the financiers. In addition, there is not enough information about country risk such as to reduce the perceived risk by banks. This lack of information is relatively easy to solve, but will require collaboration.
With much of business aviation still in its infancy in many African
48 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 INDUSTRY INSIDER
countries, it can be challenging to find qualified crew. This means that expat pilots are often recruited, creating its own set of challenges. As Africa is a developing the demand for pilots increases in developed countries across the world, many Africa-based pilots leave for more lucrative opportunities market that is in its abroad. Pilots have become commodities that are easily relocated, and their salaries are linked to the USD, making pilots an expensive infancy. This is the resource in most African countries. biggest challenge, and Regulatory challenges also abound – over-flight clearances can take days to arrange, making the very reason for the convenience yet also the biggest of business aviation less attractive. AfBAA is now working with the African Union to see how to streamline this process. But for now, it is opportunity. Africa’s a source of much frustration. sheer size is often What does the worldwide industry need to overlooked and certainly understand about the growing African market? As far as business aviation is concerned, Africa is a developing misunderstood. market that is in its infancy. This is the biggest challenge, and yet also the biggest opportunity. Africa’s sheer size is often overlooked and certainly misunderstood. It takes about 10 hours to fly from North to South, and at its widest point, the East to West flight is more than eight hours. Although Africa is one continent, there are 54 different countries, with different cultures, languages and regulatory authorities.
While the GDP growth rates of several countries in Africa are among the best performing economies in the world, this is off a low base. Additionally, business aviation growth usually lags behind economic growth by several years. Overall economic growth depends on the movement of people. Business aviation can move company executives around Africa far more efficiently than by utilizing airlines. But despite this obvious case highlighting its benefits, most business jets in Africa are owned by HNWIs, and many corporates still shy away from airplane ownership due to what would be perceived as negative publicity.
Transportation infrastructure in Africa is severely lacking. The most What are you hoping to achieve with ASG in your efficient way to get anywhere in Africa is via air transport. However, new role? connections between some African cities are infrequent, and The challenges being experienced in Africa, are very similar to those sometimes the quickest way between two cities that are only an hour that were and are faced in Asia, and in China, in particular. When I or two apart by air, may involve flying via Europe at huge costs. But learned more about ASG, and the philosophy and patience with which then a number of African airlines are below par in safety and therefore they approached the market in Asia, I knew that the same approach banned from flying into Europe. would work in Africa. Results may not be immediate, but as the ASG brand becomes more known and respected in Africa, as it has become Due to the lack of suitable aircraft in many countries, charter is very in Asia, I believe that success in Africa will follow and mirror that which expensive, as such requests often involve two dead-leg flights for the has been achieved in Asia. pick-up and drop off. Many of these dead legs are several hours long. Many times aircraft are sourced in Europe or the Middle East. Even in During my first visit to ASG in Hong Kong, I was simply blown away by relatively developed markets such as South Africa or Nigeria, fractional the skills and dedication of the ASG team in that office, and I wanted ownership models are challenging, lacking critical mass. to be part of it. I am fully aware of the challenges of this market, but with ASG we will seek to establish good working relationships with With that said, I believe that business aviation presents good all parties that share our vision for Africa. I may be the first employee opportunities in Africa. It’s a market that will develop slowly, based in Africa, but I am planning on building a successful team in requiring investment in all related activities and services, and Africa to replicate ASG's team in Asia. such ancillary activities will present excellent opportunities also. It will most likely require a collaborative approach, with like-minded www.asianskygroup.com parties as partners, and help from organizations such as AfBAA that is tacking regulatory challenges, in order to fast track a healthy business aviation community.
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 49 rolls-royce.com
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50 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 AIRCRAFT POSITIONING
BUSINESS JETS Aircraft Estimated Total Yearly Cost vs Maximum Range
24 1 ACJ318 62 Beechjet 400 23 2 ACJ319 63 Cit. Bravo 22 3 ACJ320 64 Cit. CJ2 21 4 ACJ321 65 Cit. CJ2+ 5 BBJ 66 Cit. CJ3 20 6 BBJ2 67 Cit. CJ3+ 19 7 BBJ3 68 Cit. CJ4 18
Corp. Airliner 8 CL850 69 Cit. Encore 17 9 CL870 CS 70 Cit. Encore+ 4 10 CL890 CS 71 Cit. Excel 7 16 11 Lineage 1000E 72 Cit. Ultra 15 73 Cit. VII 3 12 F7X Light 6 2 13 F8X 74 Cit. XLS 14 75 Cit. XLS+ 14 G550 13 15 G650 76 Diamond 1A 77 H400XP 5 16 G650ER 1 12 17 Global 5000 78 L40XR 18 Global 6000 79 L45XR
Long Range 11 19 Global Express 80 L70 15 16 20 Global Express XRS 81 L75 18 10 21 G-V 82 Nextant 400XTi 14 83 Phenom 300 22 CL604 11 23 CL605 84 Cit. CJ1 13 9 24 CL650 85 Cit. CJ1+ 17 12 86 Cit. M2 25 F2000 8 26 F2000DX 87 Cit. Mustang 36 27 F2000EX 88 Eclipse 550
Very Light Very 89 HondaJet 28 F2000LX 33 7 90 Phenom 100E 29 F2000LXS 20 30 F2000S 91 Premier IA 31 F900EX
Large 32 F900EX EASy 40 6 29 33 F900LX 8 10 24 34 G300 39 35 35 G350 9 30 48 19 36 G450 32 46 37 G-IV 53 21 23 38 G-IVSP 28 39 Legacy 600 61 40 Legacy 650 41 Astra SP 47 31 26 38 4 42 Cit. Latitude 45 25 34 43 Cit. Sovereign 37
44 (MILLION USD/YEAR) COST YEARLY TOTAL 44 Cit. Sovereign+ 60 42 27 22 45 Cit. X 49 46 Cit. X+ 51 52 47 CL300 54 48 CL350 43 3 81 75 49 F50EX 50 G100 51 G150 80 52 G200 58 Mid - Size 53 G280 57 54 H4000 73 55 H800 68 59 56 74 79 56 H800XP 83 55 67 50 57 H850XP 71 2 58 H900XP 66 41 59 L60XR 70 78 60 Legacy 450 69 65 61 Legacy 500 82 76 63 86 72 62 77 85 64 91 84 90 89
87
88
1 500 7000 7500 2500 3500 5000 5500 1500 6000 6500 3000 4000 4500 8000 1000 2000 MAX RANGE (N.M.)
* Total Yearly Cost estimated using Conklin & de Decker 2016 industrial cost figures for aircraft acquisition cost on 10 years, plus yearly operating cost, plus adjustments to account for regional differences and financing.
Source: Conklin & de Decker & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 51 MARKET SUMMARY -- JETS MARKET SUMMARY PER MODEL — BUSINESS JETS
AIRBUS AVERAGE ASKING PRICE & NO. OF AIRCRAFT FOR SALE ACJ318
$42.2
$33.5 $31.2
SPECS Max Range 4,253 N.M. / 7,877 km (with ACTs) Max Speed Mach 0.82 Typ. Passengers 19 6 Total Aircraft for Sale 5 4 FOR SALE 2017 Q1 No. for sale 4 (20.0%) Avg Asking Price 31.2M USD Avg Days on Market 1,227
SOLD Feb May Aug Nov Feb Past 12 Months 0 2016 2017 Past 3 Months 0
ACJ319
$64.8
$52.3 $49.5 $52.7
SPECS Max Range 6,000 N.M. /11,112 km Max Speed Mach 0.82 Total Aircraft for Sale Typ. Passengers 19 6 5 5 FOR SALE 2017 Q1 No. for sale 6 (8.0%) Avg Asking Price 52.3M USD Avg Days on Market 400
SOLD Feb May Aug Nov Feb Past 12 Months 1 2016 2017 Past 3 Months 1
Source: JETNET & ASG 52 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET SUMMARY -- JETS
BBJ BOEING
$43.7
$40.7
$39.3 $39.3 SPECS Max Range 6,235 N.M. / 11,547 km (with 9 ACTs) Max Speed Mach 0.82 16 Typ. Passengers 19 15 Total Aircraft for Sale 15 FOR SALE 2017 Q1 No. for sale 16 (12.0%) Avg Asking Price 39.3M USD Avg Days on Market 437
Feb May Aug Nov Feb SOLD 2016 2017 Past 12 Months 4 Past 3 Months 0
FEATURED AIRCRAFT 2015 BBJ SN61040
609 HOURS SINCE NEW 133 CYCLES SINCE NEW
• NEWEST BBJ ON THE MARKET WITH UNDER 400 HRS
• ONE OF THE LONGEST RANGE BBJS: 8 AUXILIARY FUEL TANKS AND SPLIT SCIMITAR WINGLETS (6,000 N.M) • ENROLLED ON BBJ COMPONENTS EXCHANGE PROGRAM • CABIN EQUIPMENT SABENA TECHNICS WARRANTY PROGRAM • MAINTENANCE CONTROL: CAMP MTX SYSTEM • HUD WITH SVS • 16 PASSENGER INTERIOR WITH VIP BEDROOM AND LAVATORY
ASKING PRICE: MAKE OFFER
[email protected] +852 2235 9222
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 53 SIKORSKY BELL HELCIOPTERS BOEING BBJ2 MARKET SUMMARY --JETS 54 $55.6 2016 Feb |ASIANSKY QUARTERLY — 3 Total Aircraft for Sale May $67.0 Aug FIRST QUARTERFIRST 2017 $62.0 Nov 2 $62.0 2017 Feb 2 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Past 3Months Past 12Months Typ. Passengers Max Speed Max Range
601 62.0M USD (9.1%) 2 0 1 19 Mach 0.82 5,620 N.M./10,408km(with7ACTs)
Source: JETNET &ASG BOMBARDIER 65 $5.5 6 $11.6 Feb Feb 2017 2017 $9.0 70 $11.9 7 $5.8 Nov Nov $11.0 | 55 ASIAN SKY QUARTERLY Aug Aug MARKET SUMMARY -- JETS -- SUMMARY MARKET CL605 CL604 May May Total Aircraft for Sale for Aircraft Total Total Aircraft for Sale for Aircraft Total FIRST QUARTER 2017 — 2017 FIRST QUARTER 15 62 Feb Feb 2016 2016 $6.6 $8.9 $13.7
25 (8.7%) 11.6M USD 261 23 3 CL605 4,000 N.M. / 7,408 km Mach 0.82 9
13 0 CL604 4,027 N.M. / 7,458 km Mach 0.82 9 5 1 6 (8.8%) 9.0M USD 2,811 N.M. / 5,206 km Mach 0.80 14 817 40 (11.0%) 5.5M USD 306
CHALLENGER 850 CHALLENGER 604/605 CHALLENGER Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. Max Range Max Speed Passengers Typ. Past 12 Months Past 3 Months Past SOLD SPECS SOLD SPECS No. for sale No. for Avg Asking Price Avg Days on Market Avg Avg Asking Price Avg Days on Market Avg No. for sale No. for Source: JETNET & ASG JETNET Source: 2017 Q1 2017 Q1 FOR SALE FOR FOR SALE FOR BOMBARDIER MARKET SUMMARY --JETS 56 GLOBAL 5000 $19.5 2016 Feb 23 |ASIANSKY QUARTERLY — REDUCED PRICE FEATURED AIRCRAFT Total Aircraft for Sale May $15.3 Aug FIRST QUARTERFIRST 2017 $19.6 Nov 21 2017 Feb $19.9 18 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Past 3Months Past 12Months Typ. Passengers Max Speed Max Range +852 2235 9222 +852 22359222 [email protected] 16.7M USD ASKING PRICE: • ANDWIRELESS LAN • • • IRIDIUMTELEPHONE • DISPLAY SYSTEM • JSSI PLATINUM ANDHONEYWELLMSP • • 932 CYCLES SINCENEW 3,643 HOURSSINCENEW SN9250 2007 GLOBAL XRS BESTPRICED2007XRSONTHEMARKET NEW CARPET ANDDADO CHANGEDIN2013 14 PAX INTERIORWITHGLOBAL OFFICEPACKAGE, 99,500 LBSMTOW SBINSTALLED EASA OPS1APPROVED SATCOM 6100WITHHST-2100HIGHSPEEDDATA AND ENHANCED VISIONSYSTEM ANDHEADUPFLIGHT AIRCRAFT ENROLLEDONBOMBARDIERSMARTPARTS,
299 19.9M USD 18 (8.4%) 13 Mach 0.89 5,200 N.M./9,630km 2 13
Source: JETNET &ASG BOMBARDIER 12 $36.6 Feb 2017 13 $37.4 Nov | 57 ASIAN SKY QUARTERLY Aug MARKET SUMMARY -- JETS -- SUMMARY MARKET FIRST QUARTER 2017 — 2017 FIRST QUARTER May Total Aircraft for Sale for Aircraft Total 60 MONTH (4C CHECK) COMPLETED DEC. 9, 2016 TWELVE (12) PASSENGERS INTERIOR WITH AVOD, ASXI, WITH AVOD, INTERIOR (12) PASSENGERS TWELVE AND SIX 10.4-INCHTHREE 21.3-INCH MONITORS COMPLETED BATCH 3 AVIONICS UPGRADE , ADS-B OUT, 3 AVIONICS COMPLETED BATCH 1/A+ AND EVS/HUD FANS KU-BAND HIGH SPEED CONNECTIVITY, GLOBAL OFFICE OFFICE GLOBAL KU-BAND HIGH SPEED CONNECTIVITY, ICS-100 IRIDIUM AND W/ WIFI, SAT-6100 PACKAGE 12 PASSENGERS EXECUTIVE CONFIGURATION 12 PASSENGERS
MONITORS • • • • ASKING PRICE: PRICING FOR CALL 2011 GLOBAL XRS 2011 GLOBAL SN9422 2,642 HOURS SINCE NEW SINCE NEW 815 CYCLES • [email protected] +852 2235 9222 8 Feb 2016 $43.6
12 (5.5%) 36.6M USD 277 9 1 6,000 N.M. / 11,112 km Mach 0.88 13
Past 12 Months Past Past 3 Months Past Max Range Max Speed Passengers Typ. SOLD SPECS No. for sale No. for Avg Asking Price Avg Days on Market Avg 2017 Q1 FOR SALE FOR FEATURED AIRCRAFT FEATURED REDUCED PRICE Source: JETNET & ASG JETNET Source: GLOBAL 6000 GLOBAL DASSAULT $30.2 MARKET SUMMARY --JETS 58 FEATURED AIRCRAFT FALCON 7X 1,882 Hours, 12Pax 2016 Feb |ASIANSKY QUARTERLY — 21 2008 FALCON 7XSN32 and stay updated on thelatest aircraft for sale. subscribeto code ASG’sthe to Scan newsletter May Total Aircraft for Sale FIRST QUARTERFIRST 2017 Aug Contact us:[email protected] $27.3 Nov 26 24,700,000 USD 2017 Feb $25.5 31 1,237 Hours, 12Pax 2010 FALCON 2000LX SN223 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Typ. Passengers Max Speed Max Range Past 3Months Past 12Months WeChat
+ 852 2235 9222 852 22359222
253 25.5M USD 31 (11.6%) 4 16 12 Mach 0.90 5,950 N.M./11,018km Email Subscription
Source: JETNET &ASG MAKE OFFER DASSAULT 16 Feb $15.0 2017 13 3,950,000 USD Nov $14.5 21,800,000 USD $27.9 | 59 ASIAN SKY QUARTERLY Aug $19.5 MARKET SUMMARY -- JETS -- SUMMARY MARKET FALCON 2000LXS FALCON May Total Aircraft for Sale for Aircraft Total FIRST QUARTER 2017 — 2017 FIRST QUARTER $29.0 852 2235 9222 FALCON 2000LX FALCON + 16 Feb 2016 $18.9 2007 FALCON 900EX SN181 2007 FALCON 2000 FALCON 2000 SN105 2000 FALCON REDUCED PRICE 3,560 Hours,11 Pax 3,560 Hours,11 6,480 Hours,10 Pax 6,480 Hours,10 6,208 km 2000S 3,350 N.M. / Mach 0.83 10 0 (0.0%) N/A 0 0 0 MAKE OFFER MAKE OFFER
7,408 km 2000LXS 4,000 N.M. / Mach 0.83 10 0 0 0 (0.0%) N/A 0
II SN128 Contact us: [email protected] Contact 7,408 km 8 2 2000LX 4,000 N.M. / Mach 0.83 10 16 (12.2%) 15.9M USD 282
2003 FALCON 900EX EASy 2003 FALCON 2010 FALCON 900LX SN248 2010 FALCON 4,440 Hours,14 Pax 4,440 Hours,14 1,675 Hours, 13 Pax 1,675 Hours, Past 12 Months Past 3 Months Past Max Speed Passengers Typ. Max Range SOLD SPECS No. for sale No. for Asking Price Avg Days on Market Avg 2017 Q1 FOR SALE FOR FEATURED AIRCRAFT FEATURED Source: JETNET & ASG JETNET Source: FALCON 2000LX/LXS/S FALCON DASSAULT $30.8 $13.8 $10.4 $18.6 FALCON 900DX/EX/EX EASy/LX MARKET SUMMARY --JETS 60 39 2016 Feb |ASIANSKY QUARTERLY — FEATURED AIRCRAFT F900LX F900DX F900EX EASy F900EX May Total Aircraft for Sale $31.1 FIRST QUARTERFIRST 2017 Aug $13.0 $16.4 $8.7 $25.1 Nov 34 $15.7 $25.6 $8.5 2017 Feb 34 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Past 3Months Past 12Months Typ. Passengers Max Speed Max Range
ASKING PRICE: +852 2235 9222 +852 22359222 [email protected] 617 CYCLES SINCENEW 2,295 HOURSSINCENEW CALL FOR PRICING • • SUITEUPGRADE • • • • DECEMBER2015BYHAWKER PACIFIC • • • SN258 2011 FALCON 900LX ONEOWNER SINCENEW CPDLC ADS-B OUT HONEYWELL 2NDCERTEASY IIAVIONICS FALCONCARE PROGRAMCOVERAGE HONEYWELL MSP CAMP MAINTENANCETRACKING PROGRAM A/2A/A+/2A+/Z INSPECTIONS - AVAILABLE FOR VIEWINGINWILMINGTON, U.S. 478 Make Offer 1 (4.2%) 7,593 km 0 1 12 Mach 0.83 4,100 N.M./ F900DX
343 8.5M USD 14 (11.9%) 0 8 8,334 km 12 Mach 0.83 4,500 N.M./ F900EX
712 15.7M USD 12 (10.0%) 0 5 8,334 km 12 Mach 0.83 4,500 N.M./ F900EX EASy Source: JETNET &ASG
313 25.6M USD 9 (17.0%) 8,800 km 0 4 12 Mach 0.83 4,750 N.M./ F900LX
MARKET SUMMARY -- JETS
LEGACY 600/650
Legacy 650 $20.6
$18.1
$14.6
$9.0 Legacy 600 $8.4 SPECS Legacy 600 Legacy 650 $7.5 Max Range 3,400 N.M. / 6,297 km 3,640 N.M. / 7,112 km Max Speed Mach 0.80 Mach 0.80 Typ. Passengers 13 13
FOR SALE 49 49 2017 Q1 No. for sale 35 (20.1%) 14 (15.1%) 35 Avg Asking Price 7.5M USD 14.6M USD Total Aircraft for Sale Avg Days on Market 407 272 EMBRAER
SOLD Past 12 Months 10 6 Feb May Aug Nov Feb Past 3 Months 1 2 2016 2017
2011 FALCON 900LX FEATURED AIRCRAFT 2008 LEGACY 600 SN258 SN14501069
586 HOURS SINCE NEW 373 CYCLES SINCE NEW
• ENGINE ENROLLED ON ROLLS ROYCE CORPORATECARE • AIRFRAME ENROLLED ON EMBRAER STANDARD EEC (INCLUDING AVIONICS, AIRFRAME, APU ) • COMPLETED 72-MONTH INSPECTION IN NOV 2014 AND RVSM COMPLIANCE • ADS-B OUT INSTALLED • CAT II, RVSM CERTIFICATION • DUAL FLIGHT MANAGEMENT SYSTEM • DATALINK CAPABILITY
ASKING PRICE: CALL FOR PRICING
[email protected] +852 2235 9222
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 61 EMBRAER LINEAGE 1000/E MARKET SUMMARY --JETS 62 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Past 3Months Past 12Months Typ. Passengers Max Speed Max Range |ASIANSKY QUARTERLY —
19 Mach 0.82 4,400 N.M./8,149km Lineage 1000 FIRST QUARTERFIRST 2017 681 681 35.6M USD 6 (20.7%) 0 0 19 Mach 0.82 4,600 N.M./8,520km Lineage 1000E $35.6 2016 Feb 4 Total Aircraft for Sale May Aug $33.0 Nov 5 Source: JETNET &ASG $31.8 2017 Feb $35.6 6 GULFSTREAM 36 $5.1 Feb $15.4 2017 MAKE OFFER 6,900,000 USD 46 Nov $4.9 $16.3 | 63 ASIAN SKY QUARTERLY Aug MARKET SUMMARY -- JETS -- SUMMARY MARKET MARKET SUMMARY -- JETS -- SUMMARY MARKET G200 G280 FIRST QUARTER 2017 — 2017 FIRST QUARTER May Total Aircraft for Sale for Aircraft Total
852 2235 9222 + 38 Feb 2016 $5.9 $20.4 2007 G200 SN156 2000 G200 SN009 NEW ARRIVAL 2,229 Hours, 9 Pax 2,229 Hours, 5,992 Hours, 10 Pax 5,992 Hours, 214 Hours, 9 Pax 214 Hours,
MAKE OFFER 5,500,000 USD 3 0 G280 3,600 N.M. / 6,667 km Mach 0.84 8 145 6 (6.1%) 15.4M USD
Contact us: [email protected] Contact 41 10 G200 3,050 N.M. / 5,651km Mach 0.81 8 30 (12.2%) 5.1M USD 358
2004 G200 SN102 2006 G200 SN154 3,929 Hours, 9 Pax 3,929 Hours, 3,411 Hours, 10 Pax 3,411 Hours, Past 3 Months Past Past 12 Months Past Max Range Max Speed Passengers Typ. SOLD SPECS No. for sale No. for Asking Price Avg Days on Market Avg 2017 Q1 FOR SALE FOR Source: JETNET & ASG JETNET Source: FEATURED AIRCRAFT FEATURED G200 & G280 G200 & GULFSTREAM 214 Hours, 9Pax G450 MARKET SUMMARY --JETS 64 FEATURED AIRCRAFT $18.3 214 Hours, 9Pax 2016 4,516 Hours, 14Pax Feb 34 |ASIANSKY QUARTERLY — 2013 G280SN2025 2005 G450SN4024 Total Aircraft for Sale May Aug FIRST QUARTERFIRST 2017 Contact us:[email protected] Nov $16.7 31 MAKE OFFER MAKE OFFER 2017 Feb $15.4 28 5,024 Hours, 13Pax 3,027 Hours, 14Pax 2002 G-IVSPSN1494 2008 G450SN4101 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Typ. Passengers Max Speed Max Range Past 3Months Past 12Months + 852 2235 9222 852 22359222
10 41 260 15.4M USD 28 (8.2%) 13 Mach 0.85 4,350 N.M./8,056km
Source: JETNET &ASG MAKE OFFER MAKE OFFER GULFSTREAM Feb 37 2017 $21.7 Nov 43 $24.4 | 65 ASIAN SKY QUARTERLY Aug MARKET SUMMARY -- JETS -- SUMMARY MARKET Total Aircraft for Sale for Aircraft Total May FIRST QUARTER 2017 — 2017 FIRST QUARTER Feb 2016 37 $29.9
6,750 N.M. / 12,501 km Mach 0.87 18 37 (6.9%) 21.7M USD 263 34 4
Past 12 Months Past 3 Months Past Max Range Max Speed Passengers Typ. SOLD SPECS No. for sale No. for Asking Price Avg Days on Market Avg 2017 Q1 FOR SALE FOR Source: JETNET & ASG JETNET Source: G550 GULFSTREAM G650 &ER MARKET SUMMARY --JETS 66 $68.2 $66.5 2016 Feb 16 |ASIANSKY QUARTERLY — FEATURED AIRCRAFT Total Aircraft for Sale May $69.0 Aug FIRST QUARTERFIRST 2017 $60.1 Nov 17 $63.6 12 2017 Feb $61.0 $59.0 15 FOR SALE 2017 Q1 Avg DaysonMarket Avg AskingPrice No. for sale SPECS SOLD Typ. Passengers Max Speed Max Range Past 3Months Past 12Months
+852 2235 9222 +852 22359222 [email protected] • • • CONFIGURATION • • • AUTO BRAKEINSTALLED -ASC055 • • • • • 139 CYCLES SINCENEW 423 HOURSSINCENEW MAKE OFFER ASKING PRICE: SN6109 2014 G650 1A/1C2CINSPECTION COMPLETE U.S.BASED®ISTEREDSINCENEW ENROLLED ONGCMP TRANSFERABLE MANUFACTURER WARRANTIES 15 PASSENGER, FORWARD GALLEY CUSTOM RUNWAY AWARENESS ADVISORY SYSTEM (RAAS) FANS 1/A,CPDLC/ADS-B OUTV2/RNP ENHANCED NAV &SYNTHETIC VISION HONEYWELL DBSSATELLITE TELEVISION HONEYWELL SWIFTBROADBAND HIGHSPEEDDATA 1 12 279 59.0M USD 11 (7.0%) 18 Mach 0.90 7,000 N.M./12,964km G650
0 5 259 61.0M USD 4 (6.6%) 18 Mach 0.90 7,500 N.M./13,890km G650ER Source: JETNET &ASG
FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 67 AIRCRAFT POSITIONING
CIVIL HELICOPTERS Aircraft Acquisition Price vs Maximum Range
1 AS332 L1e 23 AW119 Kx 8.00 2 AW189 24 H130 3 AC313* 25 Bell 407GXP
Heavy 4 H225 26 AC311* 5 S-92 27 H125 28 Bell 407 6 H175 29 MD 600N 7 Bell 412EPI 30 Bell 206L4 3 8 S-76D 31 MD 520N 9 AW139 32 MD 530F 10 H155 Single Tubine 5 4 33 H120 11 H145 34 MD 500E 12 S-76C++ 35 S-333 13 AC312* 1 (Super) Medium 36 EN480B 14 EC145 4.00 37 R66 15 AW109 GN 16 H135 (P3) 38 R44 Raven II 17 Bell 430 39 R22 Beta II 2 Piston 18 Bell 429 6 19 MD 902 20 AW109 Power 9 8 Light Twin 21 AW169 10 22 H135 (T3) 7 12 13
11 17 14 2.00 21 15
19 20 18
22 16
23
24 29 25 28 27 1.00 26 30 (MILLION USD) PRICE ACQUISTION AIRCRAFT 31 32 33 34
35 36
37
0.50
38
39
0.25 200 250 300 350 400 450 500 550 600 650 700 750 MAX RANGE (N.M.)
* Aircraft Purchase Price estimated using ASG database for aircraft acquisition cost and Conklin & de Decker 2016 industrial figures for range.
Source: Conklin & de Decker & ASG 68 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET SUMMARY PER MODEL — CIVILMARKET HELICOPTERS SUMMARY -- HELICOPTER AVERAGE ASKING PRICE & NO. OF AIRCRAFT FOR SALE EC135T2 & P2
$2.7 $2.7 EC135P2 $2.6
$2.4
EC135T2 $1.8 $1.8 SPECS EC135T2 EC135P2 Max Range 332 N.M. / 614 km 332 N.M. / 614 km Max Speed 127 Knots 127 Knots Typ. Passengers 6 6 16 15 Total Aircraft for Sale FOR SALE 11 2017 Q1 No. for sale 3 (2.1%) 13 (8.4%) Avg Asking Price 1.8M USD 2.6M USD Avg Days on Market 880 605
SOLD Feb May Aug Nov Feb 2016 2017 Past 12 Months 4 5 Past 3 Months 1 2
FEATURED AIRCRAFT 2013 EC135 P2+ SN1107 2008 EC135 P2 SN660 AIRBUS HELICOPTERS
NEW ARRIVAL NEWNEW ARRIVALARRIVAL 1,450 Hours, 5 Pax, EMS/VIP 3,795,000 USD 780 Hours, 5 Pax, VIP 2,895,000 USD
2002 H120 SN1300
NEW ARRIVAL 2,999 Hours, 4 Pax, VIP MAKE OFFER Contact us: [email protected] +852 2235 9222
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 69 MARKET SUMMARY -- HELICOPTER
FEATURED AIRCRAFT 2008 EC130B4 SN4601
HOURS: 1,698, CYCLES: 3,465 SINCE NEW
• UTILITY CONFIGURATION • ALWAYS HANGARED • CARGO HOOK • AIR CONDITIONING SYSTEM • DUAL CONTROLS • EMERGENCY FLOATATION GEAR - FIXED PARTS • ALWAYS MAINTAINED BY AIRBUS HELICOPTERS
ASKING PRICE: MAKE OFFER
2005 EC135P2 SN0437
DELIVERY YEAR: 2006 HOURS: 875, CYCLES: 2,483 SINCE NEW
• AIR CONDITIONING • VIP CONFIGURATION • POP-OUT FLOATS • DUAL CONTROLS • ELT • SP/DP IFR • AUTO PILOT (SAS) • NO DAMAGE HISTORY
ASKING PRICE: 2,650,000 USD
2008 EC145 SN9226
HOURS: 2,483 SINCE NEW
• UTILITY CONFIGURATION • BLEED AIR HEATING • 40-AMP/HOUR BATTERY • LS & RS CLAMSHELL DOOR WINDOW AIRBUS HELICOPTERS AIRBUS ASKING PRICE: MAKE OFFER
2004 H155 SN6664 & 6669
TWO AIRCRAFT AVAILABLEFOR SALE LESS THAN 6,000 HOURS SINCE NEW
• CONFIGURATION: UTILITY, 9 PAX / 12 PAX • EMERGENCY FLOATATION GEAR (F.P.) • AIR CONDITIONING SYSTEM
ASKING PRICE: NEW ARRIVAL CALL FOR NEW PRICING Contact us: [email protected] +852 2235 9222
Source: JETNET & ASG 70 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET SUMMARY -- HELICOPTER
EC145
$4.9 $4.5 $4.1 $4.3
SPECS Max Range 461 N.M. / 855 km Max Speed 131 Knots 11 10 Typ. Passengers 9 8 Total Aircraft for Sale FOR SALE 2017 Q1 No. for sale 11 (1.5%) Avg Asking Price 4.3M USD Avg Days on Market 384
SOLD Feb May Aug Nov Feb Past 12 Months 8 2016 2017 Past 3 Months 3
AS332L1 & H225 AIRBUS HELICOPTERS
$25.5 H225 $25.5 $25.5
$8.4 $8.5 $8.5 SPECS AS332L1 H225 AS332L1 Max Range 452 N.M. / 837 km 452 N.M. / 837 km Max Speed 142 Knots 142 Knots Typ. Passengers 19 19 17
FOR SALE 2017 Q1 12 11 11 No. for sale 4 (6.0%) 7 (4.2%) Avg Asking Price 8.5M USD 25.5M USD Total Aircraft for Sale Avg Days on Market 657 332
SOLD Feb May Aug Nov Feb Past 12 Months 1 2 2016 2017 Past 3 Months 0 0
Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 71 MARKET SUMMARY -- HELICOPTER
EC155B & H155
$5.9 $5.6 H155 $5.6
$4.7
EC155B $3.3 $3.3
$2.5 SPECS EC155B H155 Max Range 516 N.M. / 955 km 516 N.M. / 955 km 22 Max Speed 135 Knots 150 Knots 21 Typ. Passengers 13 13 18 FOR SALE 2017 Q1 Total Aircraft for Sale No. for sale 9 (30.0%) 13 (9.1%) Avg Asking Price 3.3M USD 4.7M USD Avg Days on Market 449 848
Feb May Aug Nov Feb SOLD 2016 2017 Past 12 Months 4 5 Past 3 Months 2 2
FEATURED AIRCRAFT 2008 EC155B1 SN6825
HOURS: 3,984 SINCE NEW
• EMERGENCY FLOATS (FP+RP) • 12 SEATS OFFSHORE CONFIGURATION • 5 SEATS CORPORATE CONFIGURATION • WEATHER RADAR • AUTO PILOT AIRBUS HELICOPTERS AIRBUS • SSCVFDR ASKING PRICE: MAKE OFFER
2015 H225 SN2968
FERRY FLIGHT HOURS/LANDINGS ONLY
• C-CLASS UTILITY OPERATIONS • 19 PASSENGERS • EMERGENCY FLOTATION GEAR WITH • COCKPIT & CABIN AC AUTOMATIC FIRING • CARGO SLING W/ DYNAMOMETER • MULTIPURPOSE ENGINE AIR INTAKES (ANTI-SAND & ANTI-ICE FILTERS) ASKING PRICE: MAKE OFFER Contact us: [email protected] +852 2235 9222
Source: JETNET & ASG 72 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET SUMMARY -- HELICOPTER
BELL 429
$6.1
$5.5 $5.4 $5.4
12 10 SPECS Max Range 368 N.M. / 681 km Max Speed 130 Knots 4 Total Aircraft for Sale Typ. Passengers 7
FOR SALE 2017 Q1 No. for sale 12 (4.3%) Avg Asking Price 5.4M USD Avg Days on Market 197
Feb May Aug Nov Feb SOLD 2016 2017 Past 12 Months 8 Past 3 Months 0
FEATURED AIRCRAFT 2011 412EP SN36588
DELIVERY YEAR: 2012 HOURS: 4,203 SINCE NEW
• OGP / UTILITY CONFIGURATION: 12 PAX • IFR / VFR • FLOATS • DUAL CONTROLS • 5,000 HOURS INSPECTION COMPLETED
• NEXT D CHECK - AUG 2019 BELL HELICOPTER ASKING PRICE: MAKE OFFER Contact us: [email protected] +852 2235 9222
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Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 73 MARKET SUMMARY -- HELICOPTER
BELL 412EP/412HP
$5.6 $5.3 $5.1 BELL 412EP
BELL 412HP $3.8 $3.8
$2.9 SPECS Bell 412EP Bell 412HP Max Range 356 N.M. / 659 km 349 N.M. / 646 km Max Speed 140 Knots 133 Knots 22 Typ. Passengers 9 14 21 20 FOR SALE 2017 Q1 Total Aircraft for Sale No. for sale 20 (3.7%) 2 (2.9%) Avg Asking Price 5.6M USD 3.8M USD Avg Days on Market 415 686
SOLD Feb May Aug Nov Feb Past 12 Months 7 4 2016 2017 Past 3 Months 0 3
FEATURED AIRCRAFT 2005 412EP SN36396 2007 412EP SN36446
8,689 Hours, 12 Pax, Utility / Offshore MAKE OFFER 8,493 Hours, 12 Pax, Utility / Offshore MAKE OFFER
BELL HELICOPTER BELL 2009 412EP SN36533
NEW ARRIVAL 7,742 Hours, 12 Pax, Utility / Offshore MAKE OFFER Contact us: [email protected] +852 2235 9222
Source: JETNET & ASG 74 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 MARKET SUMMARY -- HELICOPTER
A109E POWER/A109SP GRANDNEW
A109SP GRANDNEW $4.8 $4.7 $4.8
$2.2 A109E Power $2.0 $2.1
SPECS A109E Power A109SP Grandnew Max Range 353 N.M. / 654 km 480 N.M. / 889 km 66 Max Speed 139 Knots 130 Knots 64 Typ. Passengers 7 7 61 FOR SALE 57 2017 Q1 No. for sale 51 (13.7%) 6 (4.1%) Total Aircraft for Sale Avg Asking Price 2.1M USD 4.8M USD Avg Days on Market 692 418
SOLD Feb May Aug Nov Feb Past 12 Months 6 21 2016 2017 Past 3 Months 1 10
FEATURED AIRCRAFT 2006 A109E POWER SN11657 2011 A109E POWER SN11784
2,915 Hours, 6 Pax, EMS 1,595,000 USD 1,179 Hours, 6 Pax, EMS 2,950,000 USD
Contact us: [email protected] +852 2235 9222 LEONARDO
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Source: JETNET & ASG FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 75 MARKET SUMMARY -- HELICOPTER
AW139
$9.2
$8.3 $8.3
SPECS Max Range 568 N.M. / 1,052 km 23 21 Max Speed 140 Knots Total Aircraft for Sale Typ. Passengers 15 17
FOR SALE 2017 Q1 No. for sale 23 (2.9%) Avg Asking Price 8.3M USD Avg Days on Market 587
SOLD Feb May Aug Nov Feb Past 12 Months 13 2016 2017 Past 3 Months 6 LEONARDO
Source: JETNET & ASG 76 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 SIKORSKY +852 2235 9222
MAKE OFFER ASKING PRICE: MAKE OFFER ASKING PRICE:
| 77 ASIAN SKY QUARTERLY 474 N.M. / 877 km 155 Knots 19 4 0 5 (1.8%) 23.3M USD 431
FIRST QUARTER 2017 — 2017 FIRST QUARTER MARKET SUMMARY -- HELICOPTER -- SUMMARY MARKET 852 2235 9222 + Max Range Max Speed Passengers Typ. Past 12 Months Past 3 Months Past SPECS SOLD No. for sale No. for Asking Price Avg Days on Market Avg 2017 Q1 FOR SALE FOR ENROLLED ON SBH & PAP OIL AND GAS PLATFORM COMPLIANT PLATFORM OIL AND GAS INTERIOR 12 PAX FREON AIR CONDITIONING UTILITY CONFIGURED & WINDOWS POP-OUT FLOATS EMERGENCY 2005 S-76C+ SN760592 10,357 HOURS SINCE NEW • • • 2001 S-76C+ SN760521 10,028 HOURS SINCE NEW • 12 PASSENGERS • • • Contact us: [email protected] Contact 5 Feb 2017 $23.3 5 Nov $23.3 Contact us: [email protected] Contact Aug May Total Aircraft for Sale for Aircraft Total FEATURED AIRCRAFT FEATURED Feb 4 2016 Source: JETNET & ASG JETNET Source: S-92 $23.3 SIKORSKY S-76C+ /S-76C++ FOR SALE 2017 Q1 MARKET SUMMARY --HELICOPTER 78 Avg DaysonMarket Avg AskingPrice No. for sale SOLD SPECS Typ. Passengers Max Speed Max Range Past 3Months Past 12Months |ASIANSKY QUARTERLY — NEW ARRIVAL FEATURED AIRCRAFT
FIRST QUARTERFIRST 2017 536 3.3M USD 29 (20.0%) 12 155 Knots 335 N.M./620km S-76C+ 0 5 Contact us:[email protected]
0 3 403 6.9M USD 19 (8.9%) 12 155 Knots 335 N.M./620km S-76C++
• POP-OUTFLOATS • CVR +FDR • HEALTH &USAGE MONITORING SYSTEM • 12PASSENGER SEATS • UTILITY/OGPCONFIGURATION 4,138 HOURSSINCENEW 2009 S-76C++SN760759 • AUTO FLIGHTCONTROLSYSTEM • POP-OUTFLOATS • CVR +FDR • HEALTH &USAGE MONITORING SYSTEM • UTILITY/OGPCONFIGURATION 6,621 HOURSSINCENEW 2006 S-76C++SN760614 $6.9 $3.8 2016 Feb 20 $7.5 + 852 2235 9222 852 22359222 May Total Aircraft for Sale S-76C+ S-76C++ Aug CALL FOR PRICING CALL FOR PRICING
ASKING PRICE: ASKING PRICE: $3.3 $4.1 Nov $6.9 27 Source: JETNET &ASG 2017 Feb $6.9 $3.3 29 SIKORSKY MAKE OFFER MAKE OFFER ASKING PRICE: ASKING PRICE:
| 79 ASIAN SKY QUARTERLY FIRST QUARTER 2017 — 2017 FIRST QUARTER MARKET SUMMARY -- HELICOPTER -- SUMMARY MARKET 852 2235 9222 + CVR + FDR CVR ENGINE INLET BARRIER FILTER HEALTH & USAGE MONITORING SYSTEM MONITORING & USAGE HEALTH SYSTEM WARNING ENHANCED GROUND PROXIMITY 12 PASSENGER SEATS 12 PASSENGER W/O LPV UNS-1FW FLIGHT SYSTEM WAAS
UTILITY / OGP CONFIGURATION INTERIOR (12) PASSENGER TWELVE • ENROLLED ON PBH & SBH • ENROLLED ON PBH & • • • • 2005 S-76C++ SN760756 2005 S-76C++ SINCE NEW 5,096 HOURS • • 2009 S-76C+ SN760599 7,658 HOURS SINCE NEW • • Contact us: [email protected] Contact FEATURED AIRCRAFT FEATURED Source: JETNET & ASG JETNET Source: OTHER FEATURED AIRCRAFT For inquiries, please contact [email protected]
2002 HAWKER SN258579 • MANUFACTURED YEAR: 2002 • SERIAL NUMBER: 258579 • TOTAL HOURS: 1,023 SINCE NEW • 8 PASSENGERS CONFIGURATION • ADS-B SYSTEM • COLLINS PRO LINE 21 AVIONIC SYSTEM MAKE OFFER
MODEL YEAR HOURS PAX ASKING (USD) Beechcraft - Hawker 4000 2011 N/A 8 For Lease Beechcraft - King Air B200 1994 6,507 8 Make Offer Beechcraft - King Air B200 2005 3,572 7 Make Offer Beechcraft - King Air C90B 1996 2,364 8 Make Offer Bombardier - Global Express 2000 5,612 12 Make Offer Bombardier - Challenger 604 1998 6,863 14 Make Offer Bombardier - Challenger 300 2010 834 8 Make Offer Bombardier - Learjet 45XR 2009 2,841 8 4 995 000 Bombardier - Learjet 60 1995 8,190 8 1,295,000 Bombardier - Learjet 60 2004 2,084 7 Make Offer Bombardier - Learjet 60 1995 8,589 7 1,595,000 Cessna - Citation CJ2 2004 3,641 6 Make Offer Cessna - Citation CJ2+ 2010 958 7 3,950,000 Cessna - Citation Encore 2002 5,274 7 2,995,000 FIXED WING Dassault Falcon - 900EX 1999 4,263 12 4,950,000 Dassault Falcon - 900B 1991 7,8 8 4 13 Make Offer Embraer - Phenom 100 2013 1,354 4 Make Offer Gulfstream - G200 2005 7,836 9 Make Offer Gulfstream - G400 2002 4,618 13 6,950,000 Gulfstream - GIV-SP 1998 4,547 15 6,496,000 Gulfstream - G-IVSP 1999 7,0 82 13 Make Offer Gulfstream - G-IVSP 2001 5,158 16 Make Offer Gulfstream - G-IVSP 1994 6,457 13 Make Offer Gulfstream - G-V 1997 8,300 14 Make Offer
MODEL YEAR HOURS CONFIG/PAX ASKING (USD) Leonardo - A119 2004+ 4000 + Utility: 6 1,280,000 Leonardo - AW139 2010+ 6000 + Utility: 12 10,500,000 Airbus Helicopters - AS350B2 1997+ 2800 + Utility: 5 968,000 Airbus Helicopters - AS355N 1995 1881 Utility: 5 Make Offer Airbus Helicopters - EC135 P2+ 2006 2450 + Utility: 5-7 2,700,000
ROTARY Airbus Helicopters - EC135T1 1998 3352 EMS: 5 1,100,000 Airbus Helicopters - EC145 2006+ 3225 VIP: 8 1,950,000 Airbus Helicopters - EC155 B1 2012 425 VIP: 6 Make Offer Sikorsky - S-76C+ 2005 2600 + Utility: 12 Make Offer Note: “*“ means multiple aircraft available. The earliest manufacturing year is shown. Price Reduced New Arrival
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80 | ASIAN SKY QUARTERLY — FIRST QUARTER 2017 FIRST QUARTER 2017 — ASIAN SKY QUARTERLY | 81