ASIAN SKY QUARTERLY SECOND QUARTER 2020 AIRCRAFT SPOTLIGHT BELL 505 COMMENTARY HFW | RECOVERY OF BUSINESS AVIATION GLOBAL MARKET UPDATE GLOBAL JET CAPITAL | AMSTAT ASIA-PACIFIC OUTLOOK METRICS & MOOD ASIA-PACIFIC FLIGHT ACTIVITY SECOND QUARTER 2020 SECOND QUARTER MARKET SUMMARIES JETS & HELICOPTERS ASM print ad 2020.pdf 2 7/10/20 4:44 PM CONNECTIVITY AT ITS FINEST DIGITAL PRINT EVENT CONTENT MARKETING ADVERTISING SUPPORT CREATION C M Y CM MY CY CMY K LITALIA YOAKUM Communications MAGGIE GU Director AYA LEUNG - Senior Graphic Marketing Turning Your Words Research Analyst Designer - into a Story - Producing Podcasts Illustrating Your as a Unique Medium BOWEN ZHANG Brand’s Story Marketing Research Manager MICHAEL WONG - Graphic Designer - Using Data to Using Video to Optimize Marketing Increase Engagement ASIAN SKY GROUP - MEDIA TEAM WE ARE THE AWARD-WINNING MEDIA DIVISION OF ASIAN SKY GROUP specializing in marketing services for aviation companies. We offer a broad range of marketing services to help better connect with your target audience in the Asia-Pacific region. Let us connect you with the right audience through the right strategy. www.asianskymedia.com | E-mail: [email protected] CONTENTS 04 ECONOMICS 32 GLOBAL MARKET UPDATE Overview of the Asia-Pacific’s region current status and Q1 GLOBAL JET CAPITAL specific country’s GDP versus their business jet and An analysis of the global market, including commentary on helicopter fleet size. the world economy, flight operations and OEM backlogs 10 MOOD & INTENTIONS 38 MARKET DYNAMICS Results of our survey on the Asia-Pacific region’s outlook on An analysis of APAC inventory levels, market trends and the economic status, aircraft utilization, purchase intentions and changing price signals for the business jet and helicopter fleets. influencing factors. 46 GLOBAL MARKET UPDATE 16 COMMENTARY JUNE 2020 AMSTAT RECOVERY OF BUSINESS AVIATION BY HFW An update on the pre-owned business jet market, including Gordon Gardiner of HFW discusses the impacts of Covid-19 the short-term impact of Covid-19 on transactions. on business aviation and how the industry will bounce back. 48 MARKET SUMMARY - JETS 20 AIRCRAFT SPOTLIGHT A look at market position and average days on market of BELL 505 featured pre-owned business jets. A look at the Bell 505 -- designed for safety, efficiency and reliability across mission types. 65 MARKET SUMMARY – HELICOPTERS A look at market position and average days on market of 23 SPECIAL FEATURE featured pre-owned helicopters. ASIA-PACIFIC FLIGHT ACTIVITY BY WINGX A look at the flight activity in Q2, including most popular flight routes and impact on flight activity from COVID-19. 27 PRE-OWNED MARKET ANALYSIS BELL 412 A comprehensive market performance analysis of the pre- owned Bell 412 market. PUBLISHER advice should be sought before taking action on any no representation about the accuracy, completeness matters to which information provided in this report or any other aspect of information contained. The may be relevant. information, data, articles, or resources provided by any other parties do not in any way signify that ASG ASG shall not be liable for any losses, damage, costs EDITORIAL & MARKET RESEARCH endorses the same. or expenses howsoever caused, arising directly or Litalia Yoakum indirectly from the use of or inability to use this report Bowen Zhang or use of or reliance upon any information or material ADVERTISING/AIRCRAFT SALES ENQUIRIES: Maggie Gu provided in this report or otherwise in connection with [email protected] DESIGN any representation, statement or information on or Aya Leung contained in this report. 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ASG information should not be regarded as a substitute is not responsible for such information and makes for professional advice. Independent professional SECOND QUARTER 2020 — ASIAN SKY QUARTERLY | 1 PUBLISHER’S NOTE Oh, what a difference a quarter makes as hope grows and a recovery from Covid-19 starts to take hold in the aviation industry. In China, the commercial airlines flew 26M passengers in May, down only 53% y-o-y; still a 16% improvement from April. Some projections even see a full recovery to pre-Covid-19 levels by the end of August and “possibly even see a slightly positive y-o-y growth”. The Asia-Pacific region did not fare as well as the huge domestic China market, but was only 43% down in June versus 2019, with projections of just 12% down in August. For business aviation, likewise, improvements took hold in Q2 of 2020, To help you see your own way forward, as always, we here at Asian Sky with China the busiest business aviation market with 280 domestic Group have strived to provide you with relevant commentary, special flights. The Asia-Pacific region as a whole saw business jet flight features & market updates. activity stop its decline and the curve flatten but flights of five hours or more saw the biggest increase as Europe and the United States Enclosed in the Q2 issue of Asian Sky Quarterly you’ll find commentary reopened. by Gordon Gardiner and James Jordan of HFW on the Recovery of Business Aviation, a market update on the global business jet fleet - These positive trends were reflected in our survey with optimism including OEM backlogs by Global Jet Capital, an update on pre-owned significantly bouncing back in the Q2: overall optimism was up 8%, transactions on a worldwide scale by AMSTAT, Q2 Asia-Pacific flight with China registering a whopping 20% improvement. activity courtesy of WINGX, a look at the flexibility and efficiency of the Bell 505, and analysis of the Bell 412 pre-owned market. Lastly, we But people’s intentions in the end are still tempered as recent events hear from AsBAA Chairman Wu Zhendong in our foreword, discussing have demonstrated the fragility of any recovery, with an outbreak in the importance of regulators and associations during such periods of Beijing in June and as we here in Hong Kong experience a “third wave”. uncertainty. So, despite renewed optimism, the percentage of the “I’m not sure” respondents grew 10% in Q2 to 59% - almost 2/3rds. And with this growing uncertainty, the higher percentage of the fleet for sale, due to the drastic economic impacts of Covid-19, sits unsold longer, with Seller’s having few options but to eventually lower prices. Sincerely, Thus, this is the current state of affairs, but by no means where we Jeffrey C. Lowe will end up. Managing Director, Asian Sky Group SPECIAL THANKS TO OUR CONTRIBUTORS: 2 | ASIAN SKY QUARTERLY — SECOND QUARTER 2020 FOREWORD Dear all, As Covid-19 continues to impact many industries including business aviation, our thoughts remain with the communities and individuals most affected by the pandemic, and with those working around the clock to alleviate the situation. AsBAA will continue to remain vigilant in monitoring and working with relevant government authorities in the region to help resolve our members' and the industry's challenges during this historic time. The Covid-19 crisis underscores the importance of regulators and associations working together. Last month, the AsBAA Singapore Chapter reached out to the CAAS on the subject of support for the business aviation community as a result of the pandemic. 3 November 2020 at Saujana Hotel, Subang, just ahead of our 6th Subsequently, the association received a response from CAAS in which Icons of Aviation Awards gala on 5 November 2020, which coincides the Authority clarified details and provided a contact for technical with the association's 20-year anniversary. The Philippine Safety Day clarifications going forward. The AsBAA Malaysia Chapter has also is tentatively scheduled for 11 November 2020 with venue details to recently met with the new CEO of Civil Aviation Authority of Malaysia follow. More events are in the pipeline and we will be sharing details (CAAM) to discuss key operational and infrastructural issues affecting with all of you through our weekly email digests and social media business aviation in Malaysia. The CAAM has suggested regular channels. dialogue with AsBAA going forward in order to continue working towards resolving challenges. AsBAA continues to be in close dialogue As the situation evolves rapidly, we will continue to adapt. Business with other government authorities in representing our members' and aviation is fundamentally strong, and this disruption to our industry is the industry's interests. only temporary. Remember aircraft take off into the wind, and together we will overcome this turbulence. On behalf of the association, allow Within the association, we have continued to improve and streamline me to give our sincere thanks to our members and supporters for their our own capabilities and resources to better serve our members. In contributions. Stay safe and healthy. addition to bringing on board our COO Jeff Chiang earlier this year, we have also invited former business aviation magazine editor-in-chief Anthony Lam in-house to spearhead the association's marketing and external affairs going forward (replacing the external agency).