ASIA PACIFIC REGION YE 2019 BUSINESS JETS NEW FEATURES AIRCRAFT REGISTRY OVERVIEW ENGINE OVERVIEW SPECIAL FEATURE FALCON SPECIAL MISSION AIRCRAFT PRODUCT SPOTLIGHTS & INTERVIEWS Sponsored by: ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2019 I Country Profile Access - Fleet Report.pdf 4 4/2/20 5:44 PM COUNTRY PROFILES IN-DEPTH ANALYSIS AND DATA ON MAJOR ASIAPACIFIC BUSINESS JET MARKETS HISTORICAL DATA ON 1 FLEET SIE GROWTH C M BREAKDOWN BY OEM, Y 2 SIE CATEGORY REGISTRATION CM MY CY OPERATIONAL CHALLENGES CMY 3 GOVERNMENT INITIATIVES K 4 OPERATOR ANALYSIS 5 DELIVERIES DEDUCTIONS ACCESS AT www.asianskymedia.com CONTENTS 02 PUBLISHER’S NOTE 04 EXECUTIVE SUMMARY 06 REGIONAL OVERVIEW 12 AIRCRAFT SPOTLIGHT: DASSAULT FALCON 6X 16 MARKET TREND 20 SPECIAL FEATURE: 20 FALCON SPECIAL MISSION AIRCRAFT 22 AIRCRAFT REGISTRY OVERVIEW 26 COMPANY PROFILE: SINO JET (BEIJING) 29 OPERATOR OVERVIEW 33 INTERVIEW: METROJET 36 OEM OVERVIEW 42 AIRCRAFT SPOTLIGHT: GULFSTREAM G700 48 ENGINE OVERVIEW 55 APPENDIX PUBLISHER’S NOTE s it turns out 2019 45. But in terms of aircraft value, this represents a decrease of wasn’t as bad as US$671M in value since 2017 and, if you don’t include the two A I thought it was new widebody deliveries in 2019, the decrease increases to going to be in regard to US$1.312B – a 48% decline over two years. We are talking big number of aircraft. Yes, numbers here. I knew the business jet market in Greater China, the The experience in the pre-owned market is the same, where from biggest in the Asia Pacific 2018 to 2019 the value of transactions declined US$885M – a and representing 40% of 35% decline. the total fleet, was severely contracting. But, much to So, as we move into 2020, we head into a market experiencing my surprise, to the rescue marginal growth, with the trend indicating a small contract for the have come some unlikely year and the value of the business jet market greatly diminished. regions – Oceania and East Asia – and with some very unlikely, unsexy heroes in the form of light and very light jets. This Fleet Report also delves deeper into the Asia-Pacific Who thought China and its big fleet of long-range, large cabin engine market and the performance and market shares of aircraft would be usurped by the likes of Australia and some its OEMs, as well as a detailed breakdown of the region’s used Lear 35s and 36s? But this is what happened. business jet fleet by country, size category, operator, registration and age. As always, adding insight to the data The Asia Pacific Business Jet fleet in 2019 still managed to eke are a number of profiles and commentaries: MetroJet shared out very marginal growth of 0.9% at year end. It was, however, information on its new maintenance facility in the Philippines the worst growth for the last five years and growth has worsened and Sino Jet, discussing its efforts to increase market share every subsequent year for those five years, which doesn’t bode in Asia. Also included are profiles on the latest aircraft on the well for YE 2020. market Dassault Falcon 6X, Dassault Falcon Special Mission Aircraft and the Gulfstream G700. This 0.9% growth represented a net addition of just 11 aircraft to the fleet. Greater China lost 16 aircraft overall – the majority being 550s, 7Xs, G450s & L650s. But Oceania and East Asia more than compensated for China’s loss by adding 10 aircraft each – the majority of which were Learjets, PC24s, HondaJets and Cirrus Jets. The revenge of the little guy! Sincerely, But this success meant in terms of dollars of aircraft – Jeffrey C. Lowe transaction values – 2019 was worse than I expected. 2019 Managing Director, Asian Sky Group saw the number of new aircraft transactions drop from 54 to Your unique business aviation financing needs. Our flexible solutions. \ Since your business is unique, we understand that your business aviation financing needs are as well. Which is why we’re relentlessly focused on providing flexible solutions designed to meet your needs. From cash preservation to meeting accelerated delivery schedules, our process is transparent, straightforward and most importantly, flexible. You’ve got a business to run. 844.436.8200 \ [email protected] \ globaljetcapital.com Business Aviation Simplified. GJCP 24304 - Asian Sky BJF Report - April 20.indd 1 3/12/20 2:20 PM EXECUTIVE SUMMARY THE ASIA-PACIFIC BUSINESS JET FLEET STOOD AT 1,213 AT YEAR END 2019, AN INCREASE OF JUST 0.9% FROM YEAR END 2018 AND THE LOWEST ANNUAL GROWTH TO DATE SINCE ASG’S FIRST ASIA PACIFIC FLEET REPORT IN 2014. THIS MARKS THE FIFTH CONSECUTIVE YEAR OF DECLINING ANNUAL GROWTH FOR THE REGION. OVERALL, THE FLEET HAD A NET GROWTH OF ONLY 11 AIRCRAFT IN 2019 – THE CULMINATION OF 45 NEW DELIVERIES AND 50 PRE-OWNED ADDITIONS, OFFSET BY 84 DEDUCTIONS. THESE FIGURES FOR DELIVERIES, ADDITIONS AND DEDUCTIONS REPRESENT A SIGNIFICANT DECLINE IN TRANSACTION VOLUME AND VALUE OVER RECENT YEARS. NET FLEET GROWTH Positive Negative No Change OEM Size Category 93+0+0 90+0+0 91+0+0 32+0+0 23+0+0 11+0+0 10+0+0 5+0+0 0+0+0 93+0+0 77+0+0 63+0+0 39+0+0 21+0+0 20+0+0 0+97+0 0+75+0 0+65+0 0+40+0 0+22+0 0+18+0 0+98+0 0+90+0 0+32+0 0+22+0 0+12+0 0+10+0 0+6+0 0+1+0 0+0+100 0+0+72 0+0+68 0+0+38 0+0+22 0+0+19 0+0+100 0+0+92 0+0+88 0+0+29 0+0+22 0+0+11 0+0+10 0+0+7 0+0+2 ombardier claimed top honours and 309 351 6% 5% remained the most popular OEM in the BOMBARDIER 327 LONG RANGE 368 2% 3% B region, adding a net eight aircraft and 335 380 achieving a market share of 28%. Its most popular 299 292 model was the Global 6000. A net increase of <1% -2% seven business jets helped Gulfstream overtake GULFSTREAM 300 LARGE 285 2% -3% Textron as the second most popular OEM in 307 276 the region, with a market share of 25%. As in 303 238 previous years, the G550 remained the most -1% 3% TEXTRON 301 LIGHT 244 popular Gulfstream in the region. Textron and -2% 5% Dassault come in third and fourth, with market 295 256 shares of 24% and 8% respectively, with the 106 147 Falcon 7X being the most popular Falcon model 0% 3% DASSAULT 106 MEDIUM 152 and Citation CJ1 from Textron. -8% -5% 97 145 Long-range jets continue to be the most popular 78 81 of all size categories in the region, with a 31% -4% CORP. 1% EMBRAER 75 AIRLINER 82 market share. Large size jets are next, with a 1% 1% 76 83 market share of 23%. 37 76 Although Mainland China saw its fleet decrease 5% -7% BOEING 39 VERY LIGHT 71 for the second consecutive year, with 332 -8% 3% 36 73 operational business jets, it still has the largest fleet in the region. Australia, India and Hong Kong 34 come in second, third and fourth with 199, 138 -6% AIRBUS 32 and 122 business jets, respectively. Collectively 9% 35 these four regions account for 65% of the Asia Pacific’s total operational business jet fleet. 1 200% HONDAJET 3 The regions of Oceania and South East Asia were 133% 7 the fleet growth drivers for 2019 – both regions TOTAL experienced a net fleet growth of 10 jets each. The 18 2017 (1,185) individual country with the highest net fleet growth 6% OTHERS* 19 2018 (1,202) was Australia – a growth of 10 business jets. 32% 25 2019 (1,213) Others*: Other OEMs include British Aerospace, Cirrus, Dornier, Eclipse, Fokker, IAI, Nextant, North American and Pilatus. 4 ASIA PACIFIC BUSINESS JET FLEET REPORT – YEAR END 2019 Note: Historical fleet data is based on Asian Sky Group's ASIA PACIFIC BUSINESS JET FLEET GROWTH adjusted and updated fleet numbers. Historical & Forecast 1250 1,213 1,202 0.9% -0.5% 1,207 1.4% 1200 1,185 2.2% 1,159 3.1% 1150 1,124 5.4% COMPOUNDED 1100 1,066 GROWTH FROM 2014 TO 2019 1050 2.6% 1000 950 2014 2015 2016 2017 2018 2019 2020 Est. East Asia (Japan & South Korea) saw the highest growth rate for The most dollars were lost is in transaction activity for long-range 2019, with the region’s fleet increasing by nine jets for a growth sized aircraft – decreasing from 87 transactions (32 brand-new rate of 12% over year end 2018. Japan’s fleet grew by eight and 55 pre-owned) in 2018 to 57 transactions (20 brand-new and aircraft (15% growth, second only to Vietnam) and the most 37 pre-owned) in 2019. popular models were the F2000 and the Honda Jet. For Asia-Pacific owners and operators, Offshore Registries At the bottom of the table, Greater China which represents 40% continue to increase their appeal. The offshore registered fleet of the total Asia Pacific fleet, saw a reduction of 16 aircraft, a grew by 20 aircraft – from 145 in 2018 to 165 in 2019 – and from decrease of 3% versus year end 2018. The largest contributor year end 2017 have grown by 23%. The majority of the offshore was Mainland China which witnessed a reduction in its fleet registered aircraft belonged to the long-range size category, at of 13 aircraft (a decrease of 4%) representing the largest 65%.