ASIAN SKY QUARTERLY FIRST QUARTER 2018 ASIA-PACIFIC OUTLOOK PRE-OWNED MARKET METRICS & MOOD DASSAULT FALCON 2000 SERIES UPCOMING AIRCRAFT DASSAULT FALCON 6X INTERVIEWS ALAN HUNG ASIAN SKY GROUP INDUSTRY EVENT HIRONORI ABE SINGAPORE AIRSHOW SETOUCHI SEAPLANES COUNTRY PROFILE VIOLET KWEK INDOCHINA FOURTH QUARTER 2017 FOURTH GLOBAL JET CAPITAL MARKET SUMMARIES JETS & HELICOPTERS SA18_Visitor01_AustDefence_210x297mm.pdf 1 8/8/2017 10:01:37 AM SA18_Visitor01_AustDefence_210x297mm.pdf 1 8/8/2017 10:01:37 AM PUBLISHER’S NOTE For this quarter’s edition of Asian Sky Quarterly, there seems to be two lines, and sellers are hanging on to their aircraft longer waiting for that stories unfolding. From our “Market Dynamics” section, we are seeing better deal i.e. days on market are rising. the market cheer as we move further and further into a seller’s territory with the percent of the fleet for sale decreasing and prices rising. But Another “right moment’ is the arrival of the Falcon 6X which is on our “Mood & Intentions” survey highlights optimism flattening out and the covers of this edition of Asian Sky Quarterly and featured as the purchase intention subsequently diminishing. “Upcoming Aircraft”. Falcon’s 2000 series of aircraft also gets our scrutiny in the “Pre-Owned Market Spotlight”. The “Country Profile” this The latter first. Optimism has flatten out because frankly it couldn’t climb time is of the Indochina region including Cambodia, Laos, Myanmar & much higher. It has been on a constant rise since 2Q/3Q 2016 and now Vietnam. And, as always, we are featuring a number of interviews, this sits at around 90% for most areas in the Asia Pacific region. Optimism time of Hironori Abe from Setouchi Holdings Inc, Violet Kwek from Global was also overall pulled down by a poor mood in the quarter from Jet Capital and ASG’s own Alan Hung. Australia which, as one can see from our “2017Q4 Economics” section, can be attributed to falling GDP. As to purchase intention, the changes have only been in the range of 1 – 3% (statistically insignificant?) which one could therefore simply cast off as being merely a “start of a new year” pause or fluctuation. The reason I take such a flippant view of the “Mood & Intentions” this time is because of the former. As you can see from our “Market Dynamics” section everything seems to be going right at the moment. The over supply that existed in the market is getting burned down further now – good aircraft at good prices are selling – and with less supply, Sincerely, asking prices are firming up and even increasing. Consequently, we are Jeffrey C. Lowe moving deeper into seller’s territory, as seen from our “Market Trend” Managing Director, Asian Sky Group SPECIAL THANKS TO OUR CONTRIBUTORS: DHT A�ia�i�� M��� y��� �i�h� ��r�ec� FIRST QUARTER 2018 — ASIAN SKY QUARTERLY | 1 CONTENTS 04 ECONOMICS 24 MARKET DYNAMICS Overview of the Asia-Pacific region’s current status and An in-depth analysis of inventory levels, market trends specific country’s GDP versus their business jet fleet size. and the changing price signals for the business jet and helicopter fleets in the Asia-Pacific region, given the 06 MOOD & INTENTIONS continual fluctuations in supply and demand. Results of the survey on the Asia-Pacific region’s outlook on current economic status, aircraft utilization, purchase 32 INTERVIEW: intentions and influencing factors. HIRONORI ABE, VICE PRESIDENT OF AVIATION COMPANY, SETOUCHI HOLDINGS INC. 12 INTERVIEW: Speaking on the company’s use of seaplanes to revitalize ALAN HUNG, DIRECTOR, BUSINESS DEVELOPMENT cities, including its newest venture bringing the Kodiak 100 ASIAN SKY GROUP to the Philippines. Discussing his breadth of experience in the aviation industry and his eagerness to find the best solutions for 35 PRE-OWNED MARKET SPOTLIGHT clients including transactions, consulting and through DASSAULT FALCON 2000 SERIES ASG’s media services. A comprehensive analysis of the pre-owned Falcon 2000 market. 14 COUNTRY PROFILE - INDOCHINA Overview and examination of Indochina’s business aviation 40 INTERVIEW: industry, its business jet operating environment and VIOLET KWEK, SALES DIRECTOR, GREATER CHINA potential for the future. & NORTH ASIA, GLOBAL JET CAPITAL Insight into aircraft financing and the benefits of 18 UPCOMING SPOTLIGHT using a specialized business jet finance company over DASSAULT FALCON 6X traditional banks. An introduction to the French manufacturer’s recently launched 6X, with a first look at its specifications and 43 MARKET SUMMARY - JETS capabilities. A look at the market performance of featured pre-owned business jets over the last 12 months. 22 INDUSTRY EVENT: SINGAPORE AIRSHOW REVIEW 56 MARKET SUMMARY - HELICOPTERS An overview of Asia’s largest aerospace and defence show, A look at the market performance of featured pre-owned held biannually at the Changi Exhibition Centre. helicopters over the last 12 months. PUBLISHER The materials and information provided by Asian Sky or expenses howsoever caused, whether arising Group Limited (“ASG”) in this report is for reference directly or indirectly from any error or omission in only. Any information we provide about how we may compiling such information. This report also uses interpret the data and market, or how certain issues third party information not compiled by ASG. ASG EDITORIAL may be addressed is provided generally without is not responsible for such information and makes Litalia Yoakum considering your specific circumstances. Such no representation about the accuracy, completeness Iris Zhou information should not be regarded as a substitute or any other aspect of information contained. The for professional advice. Independent professional information, data, articles, or resources provided by DESIGN advice should be sought before taking action on any any other parties do not in any way signify that ASG Michael Wong matters to which information provided in this report endorses the same. Aya Leung may be relevant. MARKET RESEARCH & DATA ANALYSIS ASG shall not be liable for any losses, damage, costs ADVERTISING/AIRCRAFT SALES ENQUIRIES: Bowen Zhang or expenses howsoever caused, arising directly or [email protected] Candice Yue indirectly from the use of or inability to use this report Casper Zhuang or use of or reliance upon any information or material Enoch Cheung provided in this report or otherwise in connection with Jersey Wu any representation, statement or information on or Michelle Shen contained in this report. Asian Sky Group Veronica Zhang Suite 3905, Far East Finance Centre, 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 of whatever nature for any losses, damage, costs www.asianskymedia.com 2 | ASIAN SKY QUARTERLY — FIRST QUARTER 2018 FIND OUT WHY SMART BUSINESSES ARE TURNING TO OPERATING LEASES. 找出为什么精明的商家正在转向经营租赁。 An operating lease is a popular financing tool that can provide you with the benefits of a private aircraft without the traditional risks of aircraft ownership. There are several different options, but in each case you do not take ownership of the aircraft, but have the full use of it as if you did. Plus instead of a large down payment, you put down a more modest security deposit and return the aircraft at the end of the lease term to Global Jet Capital. You can choose to: · Enter into a sale and leaseback arrangement for your current aircraft · Identify a new or pre-owned aircraft for us to purchase · Assign your purchase contracts to us for your new, on-order aircraft Balance Sheet Loan Assets: Liabilities: Lease Easily adjust to Allocation of Capital Lower Residual Value Risk Predictable Costs Off Balance Sheet changing needs Visit us at ABACE - Booth P224 If you’re thinking about a true operating lease, give us a call at +1 (844) 436-8200. We’ll get you in the air. globaljetcapital.com LEASING & LENDING SOLUTIONS FOR PRIVATE AIRCRAFT GJCP 22442 - Asian Sky - April 2018-2.indd 1 3/15/18 3:11 PM 2017Q4 ECONOMICS Australia Malaysia Australia’s GDP growth slipped to 2.4 percent in Q4, falling from The Southeast Asian nation of Malaysia expanded at 5.9 percent 2.8 percent the previous quarter. The household sector, including in Q4, compared to 6.2 percent the previous quarter. Services, consumption and income, were major drivers of the country’s GDP, while manufacturing and the agriculture sectors have been the greatest net exports — particularly in rural goods and tourism — contributed to contributors on the production side, with all sectors posting growth the drag. except mining and quarrying. Mainland China Japan China’s economy grew 6.9 percent in 2017, ending on a positive note. Japan’s economy ended 2017 on a weaker note because of negative 2017 topped the previous year when growth was 6.7 percent — the contribution from net exports, a consequence of a surge in imports lowest in 26 years. An increase in consumer spending and a rebound in Q4. Still, the country continued its streak of expansion for now the in the property market added to the final quarter’s growth. Signals from eighth consecutive quarter. Overall growth in the October-December 2017 show the country’s growth is moving away from manufacturing quarter grew at 1.2 percent, revised up from a preliminary reading of and investment-led growth. 1.0 percent growth. Hong Kong India Growth in the final quarter of the year expanded 3.4 percent year-on- India’s economy expanded 7.2 percent (y/y) in the last three months of year (y/y), for a full-year growth of 3.8 percent up from 2.1 percent in 2017.