avbuyer magazine june 2016

AVBUYERB U S I N E S S A V I A T I O N I N T E L L I G E N C E

June 2016

Aircraft Comparative Analysis Pilatus PC-12 NG

GAMA Q1 2016 Analysis

International Flight Operations Europe

THIS MONTH

www.AVBUYER.com

See pages 32 - 33 for further details

O'Gara FC June 2016.qxp_FC December 06 25/05/2016 16:09 Page 1

Project1_Layout 1 03/06/2016 10:20 Page 1

eaders of this publication are engagedin an endeavor that contributes tosociety. As users of Business Aviationor as professionals providing their

knowledge and acumen to owners and operatorsof business aircraft, AvBuyers audienceparticipates in a unique form of transportationthat is essential to the ebb and flow of commercethroughout the globe.

Transportation is an enabling technology foreconomic growth and improved quality of life.History bears witness to the pervasive role thatimproved mobility of people and goods play inthe progress of societies. When a regionestablished roads in ancient times, commerceexpanded and people benefited.

The nautical abilities of European and Asiannations enabled commerce and culture to expandthroughout the globe before there were othermeans to travel long distances. Colonial Americabuilt canals and eventually the railroads tofacilitate growth. Today, long-range jets shrink thetime and effort needed to bring peoples andbusinesses into productive contact, enablingbetter understanding and cooperation betweendifferent societies and cultures. As described withdetailed introspection in the recently publishedbook Door to Door by Edward Humes, everypart of our daily lives is impacted and improvedby transportation.

Business Aviation is an essential component oftransportation today. The form of travel thatAvBuyer embraces with conviction and passionaugments the role of the Scheduled Airlines byenabling mobility between locations unserved byairliners. Entrepreneurs and business leadersrequire the mobility and scheduling flexibility ofBusiness Aviation to work their magic, therebycreating jobs by expanding a companys reachand facilitating commerce by returning dividendsto investors and shareholders.

Business Aviation contributes uniquely toeconomic growth and improved quality of life as itfacilitates the productive use of time by creativebusiness men and women. AvBuyer is dedicatedto serving the informational needs of those whoare engaged in the worthy profession of BusinessAviation.

To the many readers who participated in therecent Editorial Survey of this publicationscontent, we offer our sincere thanks. AvBuyer isfocused on serving you, the Business Aviationuser and professional. The more we know about

your needs for meaningful intelligence, the betterwe can do our job. We value your input andencourage your dialogue with this publication.

In This IssueAdding to Rolland Vincents insightful analysis oftodays Business Aviation marketplace, Mike Pottsprovides coverage of the Q1 2016 ShipmentReport from General Aviation ManufacturersAssociation. Mike Chase adds to that collection ofintelligence with his presentation of JETNET datato analyze new and used airplane sales trends.(Reader response to AvBuyer surveys consistentlyshow that articles such as those presented byVincent, Potts and Chase provide important datathat Business Aviation professionals use in pursuitof services to the owners and users of businessaircraft).

Ken Elliott presents the first of a two-part seriesupdating developments in the ongoing saga ofNextGen, this month concentrating on ADS-B andthe latest directives related to FANS. DaveHigdon continues his examination of operatingand equipment required throughout the globesFlight Information Regions, this month focusingon Europe. Readers tell us that AvBuyer coverageof government mandates and regulatory issuesare essential and greatly appreciated.

Articles on safety, such as Mario Pierobonsanalysis of a seemingly harmless incident involvingthe misidentification of a destination airport, alsoare sought by our readers while discussions ofnew technologies, such as Dave Higdonsperspectives on EFBs and the application of off-the-shelf commercial hardware (e.g., iPads),address current operational challenges facingAvBuyer readers.

For Aviation Managers, we present JodieBrowns feature on employee motivation, DavidWyndams treatment of financial tools forcommunicating with the companys CFO, andAndre Fodors discussion on the need to buy a jetwith the long view in mind. In continuing responseto Reader demand, we offer Mike Chases uniqueComparative Analysisthis month examining thePilatus PC-12 NG.

We trust you will find this issue, and all issuesof AvBuyer, essential reading as you seekBusiness Aviation Intelligence.

Jack Olcott - Editorial Director & PublisherAvBuyer -Your source for Business Aviation Intelligence

RA Worthy Profession

4 AVBUYER MAGAZINE June 2016 Aircraft Index see Page 153www.AVBUYER.com

WelcomeEditors EDITORIALEditorial Director / Publisher

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Editor Welcome June.qxp_JMesingerNov06 24/05/2016 10:32 Page 1

AMAC Aerospace Switzerland AG

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Telephone + 41 58 310 31 31

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Editorial Focus

GAMA Q1 2016 ShipmentAnalysis & Report:

With new business aircraft shipmentsdown from Q1 2015, what finer detailswill Mike Potts uncover in his analysis?

34


Time Value of Money:The Chief Pilot and CFO need to speak

the same language when discussing aircraft transactions, suggests David Wyndham.

Heres how

60

112

82International Business

Aviation Operations: Dave Higdon continues a new series ontransiting the worlds airspace with an

overview of Europe

Aircraft Comparative Analysis Pilatus PC-12 NG:

How does Pilatus PC-12 NG square upagainst Dahers TBM 900? Find out here

Contents Layout Jun16.qxp 24/05/2016 15:38 Page 1

ContentsVolume 20,

Issue 6June2016

June 2016 AVBUYER MAGAZINE 9Advertising Enquiries see Page 4 www.AVBUYER.com

B U S I N E S S A V I A T I O N I N T E L L I G E N C E

BizAv Intelligence20 Business Aviation Market

Summary: Market trends, indicators, assessments and forecasts, introduced by Rollie Vincent

48 Q1 2016 Business Aircraft Market Update: Using JETNET data, Mike Chase and Marj Rose assess the Q1 2016 new and used Business Aviation market trends

50 Business Aviation Market Insights: Discover the perspectives and thoughts on the BizAv Market of Welsch Aviations Hunter Weiss

Boardroom56 Chinas Exciting BizAv Market:

Whats it like to operate busi-ness aircraft in China? Global Jets David Mezenen speaks with Rani Singh to illustrate

64 The BizJet Insurance PolicyTime-Bomb: When insuring your business aircraft, being too casual can result in painful surprises. Stuart Hope offers an example

Flight Department68 2016 NextGen Update (Part 1):

Ken Elliott provides an updateon NextGen beginning thismonth with a summary of ADS-B, FANS and more

78 The Benefits & Risks of EFBs:What are the benefits and cautions of using an ElectronicFlight Bag? Dave Higdon investigates

88 How to Motivate in ChangingTimes: Jodie Brown offers acase study in successful flightdepartment management.

92 Buying a Jet The Need for the Long View: When buying a business aircraft, experience and commitment matter, notes aviation director, Andre Fodor. Heres why

96 Managing Flight Dept. Interfaces Well: Highlighting anairport misidentificationincident, Mario Pierobon high-lights the need to handle third-party interfaces well

98 Retail Price Guide: 20-yearMedium jet price guide fromThe Aircraft Bluebook

102 Specifications: Medium jet performance and specificationscomparisons

Community120 BizAv Review: News; OEM

Bites; Arrivals & Events

Next Month Aircraft Comparative Analysis

Dassault Falcon 7X International Business Aviation

Ops Series (South America) Part NCC & CAMO

Contents Layout Jun16.qxp 25/05/2016 09:32 Page 2

Avpro June.qxp_Layout 1 23/05/2016 15:10 Page 1

FREESTREAM AIRCRAFT LIMITED

London+44 207 584 [email protected]

FREESTREAM AIRCRAFT (BERMUDA)LIMITED

Hamilton, Bermuda+441 505 [email protected]

FREESTREAM AIRCRAFT (H.K.)LIMITED

Hong Kong+852 2724 [email protected]

FREESTREAM AIRCRAFT USA LIMITED

New York+1 201 365 [email protected]

1998 Boeing BBJ S/N: 29273 Price reduced to $21,950,000 Total Time Airframe: 3814.54 Hours Landings: 938 APU TT: 3552 Delivered with a Fresh A2 Check C1 check completed 2014 HUD (Heads Up Display) SATCOM Pats 9 Tank Fuel System Basic Operating Weight: 95,096 Lbs SFR88 Mod CVR/FDR Airshow Network 18 Place Interior One Owner Since New

2014 Gulfstream G650 S/N: 6085 Price reduced to $64,950,000 Customized 15 Passenger Layout Honeywell L5Z-860 Lighting System Part 135 Certified Enhanced Soundproofing Secureplane 500 System 7220 CabinView Passenger Flight InformationSystem

7720 Honeywell SwiftBroadband Data System External Color Camera System Forward Galley and Crew Rest Honeywell INMARSAT Satellite CommunicationsSystem

2007/2009 Boeing BBJ S/N: 36714 Reg: VP-BFT Make Offer Into Service 2009 Total Time Airframe: 2849 Hours Landings: 741 Fresh out of 6 year 2C check Basic Operating Weight: 101,611 Lbs Pats 6 Tanks, 5 aft, 1 fwd Airshow Network- Aero H+ Satcom Swiftbroadband- Iridium

5 external cameras - EFB 18 Passenger Interior/ Andrew Winch Design

Freestream June.qxp 26/05/2016 10:30 Page 1

2008 Gulfstream G550 S/N: 5176 Price now only $22,495,000 Total Time: 3483.5 hrs Landings: 964 Engines on RRCC APU on MSP Honeywell APP & Parts Programs Securaplane External Camera System Airshow 4000 18 passenger interior Forward crew rest Currently at Gulfstream Savannah Delivered with Fresh 12/24/36/48/96 Monthinspection on the N Register

2011 Gulfstream G450 S/N: 4211 Total Time: 1060.3 hours Total Landings: 545 APU: 1552 hours 1530 cycles Delivered with fresh Savannah 5C Inspection onUS FAA register

Engines Enrolled on Rolls Royce Corporate Care Honeywell HD-710 High Speed Data System(Swift Broadband Capable)

ADS-B 14 passenger aft galley interior

2015 Gulfstream G650 S/N: 6159 Make Offer Delivery hours only Freestream Supervised Completion Engines on Rolls Royce Corporate Care Part 135 and EASA Validated Enhanced Soundproofing Honeywell SwiftBroadband Data System ViaSat Ku-Band Broadband Data System Forward Galley and Crew Rest Available to View at Groton, CT (KGON)


2001 Falcon 900EX S/N: 87 New Asking Price $10,950,000 Aircraft to be delivered with engines on 100% JSSI TTAF: 5652.40 TTAC: 3079 Honeywell Avionics Protection Plan (HAPP) Engines & APU: JSSI All three Engines: 3000/6000 Fresh MPI Eng No. 2 New 3rd Stage high pressure turbine ENG No. 2 Fresh 2A, Fresh 2A+ Dual GPS Honeywell HG2021GD02 Airshow 400/Genesis Securaplane Back up Batteries

2009 Challenger 605 S/N: 5824 Reg: N304KR Price Reduced Total Time: 1847 Hours Landings: 762. TAPU: 1558 Engines on GE OnPoint Rockwell Collins Pro Line 21 Dual FMC-6000 flight management systemw/ 3DMAP and long range cruise

MNPS and RNP-5 navigation compliance Aircell ATG 5000 Aircell GoGo Biz wifi 11 Passenger Interior

2006/2007 Global Express XRS S/N: 9223 $23,950,000 JSSI Tip-to-Tail has $2.4M Total Time: 3658:07 hrs Landings: 1177 Engines on 100% JSSI Enrolled on JSSI Tip-to-Tail Triple FMS FANS 1/A+ and RNP 4 SBAS with LPV APRH Batch 3 ADS-B Forward and Aft lavs Fresh paint September 2015


2000 Eurocopter EC 135P2 S/N: 0193 Reg: ZK-HLH Price reduced to $1,950,000 USD Manufactured in 2000 and delivered in 2001 TTAF 527.4 Very Low Time 2000 EC-135P2 No Damage History Pop-out Floats Air Conditioning Dual Controls

2009 Sikorsky S-76C++ S/N: 760757 New asking price $6,495,000 USD

TTAF: 211.54 hours

Lowest Time Pre-Owned S-76C++ On The Market

Excellent Condition

Single Pilot IFR

EGPWS

CVR & MPFR

Emergency Float System

TRADE-IN WELCOME (rotary or fixed-wing)

2001 Learjet 45 S/N: 167 Make Offer AFTT: 6763 hours. Landings: 5403 Engines on MSP Gold Smart Parts Plus APU on MSP Honeywell Primus 1000 TCAS II with Change 7 EGPWS Airshow 400 Forward and Aft Monitors


BIZAV INTELLIGENCE MARKET INDICATORS


ith the closing of 2,300 wholeretail business jet transactionsthrough the end of April on atrailing 12-months (TTM) basis,pre-owned jet sales continue to

outpace new business jet deliveries by more than3-to-1, according to JETNET records.

Dealers, brokers, financiers, lawyers, title andescrow agents, and other professionals whoparticipate in the business of business jet sales arecollectively a very busy bunch, with worldwidepre-owned transaction levels remaining at theirhighest levels yet, measured on a TTM basis. Withall that activity, it is important to note that this istruly a buyers market, with exceptional qualityaircraft available at prices that offer unsurpassedvalue-for-dollar.

New Aircraft MarketsAs always, GAMAs highly anticipated aircraftshipments report (Q1 2016) providednumerous insights into the state of the market.Factoring in an estimate for missing DassaultFalcon Jet deliveries (they have shifted toreporting shipments only twice per year), newbusiness jet shipments are essentially flat Year-over-Year (YoY). Recognizing that shipmentdata are mostly lagging indicators of pastorder activity, we note that aircraftmanufacturer book-to-bill performance wasbelow 1.0 for the industry in Q1 2016,implying backlog erosion.

Based on regulatory filings, the Big 5OEMs (Bombardier, Dassault, Embraer,Gulfstream and Textron) collectively hadUS$37bn of firm orders in backlog at the endof 2015, which was down 18% YoY. Q1 2016book-to-bill performance was improved overthat for the entire year 2015, but was stillbelow 1.0. Bombardier (which accounts foralmost half of the industry backlog) had agood order experience in Q1 2016, notablybooking 20 Challenger 350s from anunidentified customer.

Used Aircraft InventoryTaking a look at the market from a 50,000-footperspective, pre-owned inventory for sale

levels have been creeping upwards acrossalmost all aircraft size categories, although thetraditional mid-size and large jetsegments are among the hardest hit over thepast 6-12 months. Compared to pre-2008crisis conditions, there is now considerably lessdistinction among business aircraft sizecategories in terms of available inventory (seeChart B, opposite).

Large cabin and long range jet categorieshave been the absolute darlings of the marketup until recently, with very limited availabilityof aircraft in these segments prior to 2008.Collectively, inventory for sale has nowincreased into the 9-12% range for large cabinbusiness jets, with the ultra-long-range jetcategory having the least availability within thehigh-end of the market. Attractively pricedaircraft are presenting some tempting step-upopportunities for owners and operators eagerto see themselves in a larger aircraft.

In some cases, though, buyers should beaware of, and consider the total costs ofownership and operation before making such acommitment. As always, we recommend thatbuyers seek out the services of reputabledealers, brokers and other transaction advisorsto guide them through these decisions. Whatmight look like an attractive buy could end upbeing a poor fit and essentially the wrongaircraft for a customers primary missions, withhigher operating costs and potentialmaintenance gotchas that could lead tobuyer remorse.

A Note on Model Retirements...Besides aircraft transaction trends, we alwayskeep a high-watch on aircraft operations as anindicator of industry health. Based on thelatest FAA data through the end of Q1 2016,total business jet cycles were up about 1.4%YoY on a TTM basis, buoyed by higherdomestic flying (up 2.2%) offset by lessinternational operations (down -2.8%).

US domestic flying accounted for about84% of all FAA business jet cycles in the mostrecent 12-month period, up marginally YoY. At4.3 million cycles, US business jet operations

With inventory for sale on the increase, and asking/transaction prices continuing toslide, the market for pre-owned business jets remains active as we near the halfway

mark in 2016, notes Rollie Vincent, Editor, Market Indicators...

WRollie Vincent is President ofRolland Vincent Associates.His aviation market analysis issecond to none, and he is the creator/director of theJETNET iQ program. With a solid background in marketresearch, economics andstatistics, he has more than 30years of experience in business,regional and internationalaviation, including positionswith Bombardier, Cessna,Learjet, Flexjet, and ICAO.Contact him [email protected]

Business Aviation Market Summary

MarketIndicators June16.qxp_Layout 1 24/05/2016 09:27 Page 1

have only just recently returned to 2003levels, despite the fact that theunderlying fleet has grown 50% (from8,500 jets to more than 12,800 jetstoday). We are clearly in anoversupplied market, and pressures aremounting for both lower new aircraftproduction rates and higher retirementrates of older aircraft.

With such reduced flight activity in theworlds most significant business jetjurisdiction, it seems clear that olderaircraft that have not flown much if at allrecently may be ripe for the (boneyard)

pickin. For manufacturers, we suspectthat this will be a very tough call adecision that impacts the entire supplychain, top line revenues, paybackperiods on prior investments,employment levels, and market share ifcompetitors do not follow.

This is a most unfriendly market fornew entrants, particularly those withaspirations of an early payback. In aworld no longer accustomed to long-range strategic planning,capital-intensive industries like aircraftmanufacturing are an exception to the

rule of early returns and quickpaybacks. With the industry still in itsinfancy stages more than 60% of theworld fleet of business jets is in just onecountry that has only 25% of theworlds wealth prospects for growthare everywhere.

This is an important investmentconsideration in what is absolutely adramatically cyclical market. As always,opportunities come to those who areactively prepared to find them.

MI www.rollandvincent.com


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BizAv Activity -EuropeThere were 63,602 Business Aviationdepartures in Europe in April 2016according to WINGXs latest monthlyBusiness Aviation Monitor, representing0.1% YoY growth in activity. Business jetflights were up 2.0%, althoughTurboprop and Piston activity declined2-3%. Year-to-Date (YtD) 2016 still trails2015 by -1.6%.Relatively strong growth was seen inWestern Europe, with activity up in allleading markets except Switzerland, andan overall YoY trend of 1.6%. Germanyand Spain were the strongest marketswhilst most of Europes growth in Aprilcame in AOC flights, up 2.8% forbusiness jets.

Several smaller markets also sawsome growth this month, with flightsfrom Norway up 8%, Czech Republic up10%, and Belgium up 15%. From each ofFrance, Turkey, Sweden and Russia,Aprils activity was down by at least 100flights YoY.

Flights from South and East Europedeclined -2%, deteriorating on 12 monthtrends. Arrivals from Russia into Europewere down -11%, an improvement onthe recent trend, while transatlanticflights were up 5%, and Middle Eastconnections were up 2%.

Aircraft SegmentsThe strongest growth came in the VeryLight Jet segment with activity up 22%YoY. Both Mustang and Phenom 100flights were well up, especially forCharter activity. The Light Jet segmentwas up 2.5% overall, ahead of the 12-month trend of 1.3%. Most of thedecline in Turboprop activity came inAOC flights, down by -6% althoughprivate flights on PC-12 and PiaggioAvanti aircraft continued to make stronggains in activity.

Richard Koe, Managing Director ofWINGX noted, The declining trend inQ1 did not extend into April, withstabilization in the UK market andgrowing activity in Germany making for asmall recovery The longer term activitytrend is still pointing to a cool-off inlarge cabin activity, growth in lightaircraft flights, and more resilience in themidsize jet segments.

MI www.wingx-advance.com

BizAv Activity - North AmericaApril Business Aviation flight activityposted its usual Month-over-Month(MoM) decrease from March, down -4.7%, notes ARGUS. Reviewing Year-over-Year (YoY) flight activity(April 2016 vs. April 2015), April 2016posted a slight decrease of -0.6%;snapping a 13-month streak ofcontinuous YoY increasesMonth-over-Month results byoperational category were all in thered for April. Fractional operatorsposted the largest monthly decline,down -6.9% while the Part 135 andPart 91 markets recorded monthlydecreases of -4.9% and -4.2%respectively.

Looking at the aircraft category, thetop and bottom of the market postedthe largest drops, with turboprops andlarge cabin jets down -5.1% and -6.0%respectively. The small and mid-sizecabin markets posted decreases of -4.0% and -4.4%, in that order. Thelargest monthly change, for anindividual segment, occurred in thefractional large cabin segment, down -8.8% from March.

Year-over-YearReviewing YoY flight activity (April2016 vs. April 2015), the results byoperational category were mixed withthe Part 91 market recording the onlyYoY increase, up 0.3%. The Part 135market posted a slight decrease, off

-0.5% from April 2015. The Fractionalmarket saw red for the month, postinga decrease of -4.7%.

Flight activity for the aircraftcategory was more negative thanpositive, with large cabin aircraftrecording the only YoY increase, up1.4%. Small cabin and turbopropaircraft posted slight decreases, down -0.2% and -0.4% respectively. Mid-sizeaircraft recorded the largest YoYdecrease, down -2.1%. The largest gainfor an individual segment occurred inthe fractional large cabin segment,which saw an increase of 8.3%.

MI www.argus.aero


Charlie Bravo June.qxp_Layout 1 23/05/2016 15:16 Page 1



AMSTAT Q1 2016 Resale Market UpdateAccording to AMSTAT, Resale RetailTransaction activity was essentiallyunchanged in Q1 2016 versus Q1 2015...The Light Jet Resale Retail Transactionactivity was brighter than the othersegments covered, with Q1 performanceat 2.7%, up from 2.4% in Q1 2015 and2.5% in Q1 2014. Otherwise, 1.8% of theHeavy Jet fleet turned over (versus 1.6%in Q1 2015) and 2.2% of the Medium Jetfleet turned over in Q1 (versus 2.5% inQ1 2015). In each year since 2013,Turboprop transaction activity in Q1 hasdeclined year-to-year. This trendcontinued in Q1 2016 with 1.7%turnover (versus 1.9% in Q1 2015).Quarterly activity in this segmentremains below a 20-Year QuarterlyAverage of 2.8%.

InventoryHeavy Jet inventory: has largelyplateaued of late, up only modestly to10.6% by April from 10.4% at the start ofthe year and 10.5% a year ago. HeavyJets are currently the only jet segmentabove its 20-Year Monthly Average.

Medium Jet inventory: is up to 11.6%from the start of year and up almost 1%since April 2015. The percentage ofthese aircraft for sale has been steadilyincreasing since the start of 2015, butcurrently remains below its 20-YearMonthly Average (12.2%).Light Jet inventory: remained flat sincethe start of year but is up modestly to11.5% from 11.3% a year ago. The trendin this market has been upward sinceearly 2015 although the rate of increasehas slowed since mid-2015 and currentlevels remain below the 20-Year MonthlyAverage (14.3%).Turboprop inventory: rose since the startof 2015 having previously plateauedaround 8%. Its currently at 8.5% up from8.2% at the start of the year and 8.1% ayear ago. Inventories have been slowlyincreasing since early 2015 but alsoremain below their 20-Year MonthlyAverage (10.8%).Heavy Jet Average Asking Prices: havebeen trending upward since mid-2011.Perhaps reflecting recent transaction

softness and an increased inventory,since the start of 2015 this trend hasreversed. This continues into 2016 withAverage Asking Prices down -3.1% sincethe start of the year.Medium Jet Average Asking Prices:peaked around the start of 2015 andthen contracted through the summer ofthe same year. This trend has continuedinto 2016, with Medium Jet AverageAsking Prices down -6.4% since the startof the year.Light Jet Average Asking Prices: havebeen trending upward since the start of2015. This positive direction hascontinued into 2016, with AverageAsking Prices up 4.5% since the start ofthe New Year.Turboprop Average Asking Prices:trending downwards since mid-2013prices picked up in 2015. So far theAverage Asking Prices for Turbopropsare up 0.8% since the start of the yearand are up 4.3% since last year.

MI www.amstatcorp.com

JETNET Q1 2016 Used Aircraft Market ReviewKey worldwide trends across all aircraftmarket segments, comparing March2016 to March 2015, reveal thatgenerally inventories are up and askingprices are down, notes JETNETBusiness Jets showed the largestincrease in the For Sale numbers, with155 (6.8%) more jets at the end of Q12016 compared to Q1 2015. Turbinehelicopters increased by 122 (9.1%) andBusiness Turboprops by 109 (9.5%) inFor Sale numbers. Across all aircraftsectors, there were 6,657 more aircraftFor Sale in Q1 2016 compared to 2015 -the first increase in the number ofbusiness jets For Sale since 2009.

Accordingly, Fleet For SalePercentages for business jets, businessturboprops, and commercial turbopropsare showing the largest increases of allmarket sectors in the quarterlycomparison, at 11.7% (up 0.4 pt.), 8.5%(up 0.6 pt.), and 6.2% (up 1.0 pt.),respectively.

Business Jet retail sale transactionsshowed a 4.4% increase, and are takingmore time to sell (11 days) than last year,

with a 12.8% decrease in average askingprice. However, Business Turbopropsshowed a decrease of 12.1% in saletransactions, with a 9.1% decrease inasking price, and are selling in less time(30 days). Turbine and Piston Helicopterssaw declines in sale transactions in Q12016, at 19.8% and 19.0%. They tookfewer days to sell. However, the averageasking price for turbine helicopters

decreased by 25.5%.Business Jets (at 540) and Commercial

Jets (at 433) accounted for 52.7% of thetotal full sale transactions (1,846). Whilepre-owned Business Jets saw an increaseof 23 (4.4%) full sale transactions, newBusiness Jet deliveries decreased by 6units (4.7%).

MI www.jetnet.com

SOURCE:JETNET


Aircraft Sales, Maintenance, Avionics, Paint & Interior, Executive Charter, 24/7 Line Service

After hours contact Dennis Dabbs +1 803 822-5533 Dan Hartley +1 803-822-5550 Nicole Wright +1 803-822-5584 Ralph Lacomba +1 803 822-5578

2861 Aviation Way, West Columbia, SC 29170The Citation Specialist

2009 CITATION CJ3, S/N 525B-0296

2004 CESSNA T182T, S/N T182083081982 CONQUEST I, S/N 425-0108

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Phone International: (803) [email protected] or visit www.eagle-aviation.com

Eagle June.qxp 26/05/2016 10:11 Page 1



Gulfstream Quarterly Market Update

The following Q1 2016 Gulfstream Quarterly Market Updateis presented by Hagerty Jet Group, a leading brokerage firmproviding aircraft sales, marketing and acquisitions servicesDeutsche Banks aerospace and defense analyst, Myles Walton,recently downgraded General Dynamics stock citingalarming inventory and sales trends surrounding itsGulfstream business jets. He said the G650 inventory and pricetrends are quickly becoming a problem, noting thatproduction has been as much as 20-30% ahead of truedemand.

The article prompted a buzz in the Business Aviationcommunity, but the news wasnt a surprise to those who havebeen closely watching the G650 market over the past 12months. Less than a year ago pre-owned G650s demanded asizable premium, earning several order holders $10m+ fromtheir initial contract price. Demand came primarily from buyerswho did not participate in the introductory 2008 lottery.

In April 2008, buyers signed contracts for G650s before theGreat Recession started. Placing a non-refundable depositwith Gulfstream for a few million dollars appeared to be a safeand smart bet. The first airplanes wouldnt deliver until late2012 and for most order-holders, large deposits wouldntcome due until 2014/2015. Further, Gulfstream increased thebase price by nearly 10% for all subsequent orders, so mostspeculators thought they had some cushion.

The first G650 resale closed in September, 2013. Pricesstarted in the high $60millions, quickly crept into the low$70millions, and topped out in the mid-$70millions in January,2015. There was little or no supply of aircraft for sale in thesecondary market and the manufacturer was the only optiondue to backlogs of over three years. Position-holders who nolonger needed or wanted their G650s proceeded with theircontractual obligations and took delivery of their airplanes withintent to re-sell them for premiums. It worked for a while untilthe supply started to increase in mid-2015.

There have been approximately 36 G650 resale transactionssince 2013 which means that nearly 20% of the current fleethas been re-sold over that period; an average of one permonth. The current supply of 21 aircraft for sale means wehave almost a two-year absorption rate.

Slowing TransactionsToday, transaction levels are slowing substantially. Demand hasdiminished because the majority of the buyers who werefrustrated by the wait between 2013 and 2015 have alreadypurchased used G650s.

There are nine Ferry Time Only aircraft currently on themarket, none of which have sold since last September. Its timeto acknowledge that buyers no longer need to pay a premiumfor a new G650 and they dont need to get in line at the OEM.

Very large deposits come due one-year ahead of deliveryfor original order-holders. If an order-holder is uncertainwhether they plan to put the aircraft into service, they willneed to make a decision to forfeit their liquidated damages orcomplete their contractual obligations and face a potentiallymore competitive re-sale market?

Speculative order-holders look to the strength of the

secondary market as a basis to determine whether selling is aviable option. Therefore, with increased market weakness,theres a good chance that Gulfstream will begin to see a trendof cancelled orders. Keep in mind, the majority of G650 order-holders intend to put their aircraft into service. However, 20%of speculators or those whose financial situation has changedwill continue to list their aircraft and bring this market down -thus making it harder for the OEM to sell new positions.

Duetsche Bank estimates that two thirds of the profit in theaerospace segment is coming from G650 deliveries. GDalready reduced production for the G550 and G450 modelsciting weak foreign demand. Although initial demand for thenew G500 has been good, the first airplane wont deliver until2018. Its also possible that potential G500 and G600 buyerswill be cannibalized by pre-owned G650s that will sell for lessand offer greater cabin size and capability. General Dynamicshas three options to address the over production of G650s.

1) They can cut production at the expense of theirshareholders but increase values for their customers;

2) They can continue current production rates and flood themarket with unwanted aircraft, which will drive values downand eventually cannibalize their new product line with usedG650s; or

3) They can pray that the Global Economy has a dramaticrecovery in the next 24 months.

MI www.hagertyjetgroup.com


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In-Service AircraftMaintenance Condition & PriceAn Asset Insight Quarterly Market Analysis was conducted on April29, 2016 covering 91 fixed-wing models and 1,908 aircraft listed ForSale. Here are the findings.The analysis revealed: Excellent Asset Quality; record low averageAsk Price; a better/lower than average Maintenance Exposure value;and, a 2.2% worse/higher Maintenance Exposure to Ask Price (ETP)Ratio.

Asset Insight Quality Rating (AIQ Rating): The Asset InsightQuality Rating worsened slightly, falling 1.7 AI2 basis points, to 5.344from last months 5.361, on the AIQ Rating scale of -2.5 to 10.

Maintenance Exposure (ATFE Value):Maintenance Exposure (anaircrafts accumulated maintenance financial exposure) worsened by3.1% over the past month, increasing over $42k to $1.42m from$1.38m. By aircraft group, the Asset Quality Rating and MaintenanceExposure figures were as follows...

Large Jets: Outstanding asset quality (consistently the bestamong all groups) at 5.501, slightly worse than last months 5.531;Maintenance Exposure worsened over 5%, increasing from$2.885m to $3.033m.

Medium Jets: Excellent asset quality at 5.376 (versus lastmonths 5.386), keeps the group in third place; MaintenanceExposure worsened slightly, increasing to $1.262m from $1.235m.

Small Jets: Once again retained second place with Excellentasset quality at 5.385, versus last months 5.414; MaintenanceExposure improved $5k, decreasing to $710k the groups bestfigure for the past twelve months.

Turboprops: Very Good asset quality at 5.016, a slightdegradation from last months 5.024; Maintenance Exposureremained virtually flat at $556k, versus last months $558k.

Exposure to Ask Price (ETP) RatioSpread in the ETP Ratio (the aircrafts Maintenance Exposuredivided by its Ask Price) remained virtually unchanged since lastmonth, while the average ETP Ratio worsened slightly; increasingto 51.3% from 50.2%, with all four groups losing ground.Generally higher Maintenance Exposure figures and a slight AskPrice decrease resulting in a record low average Ask Price figure were the primary drivers.

Asset Insight considers any ETP Ratio over 40% to representexcessive Exposure in relation to Ask Price, so the increase eventhough slight is not a positive development for Sellers. Byaircraft group: Large Jets: ETP Ratio worsened 4.7%, increasing to 35.4% from

33.8%, but was still the best ETP Ratio among all groups. AskPrice fell to $14.39m from $14.89m a 3.3% change leading tothe groups lowest 12-mointh figure. For Buyers, this groupcontinues to offer great values. For Sellers, falling Ask Prices forhigh quality assets has to be creating consternation. Consideringthe pricing challenges faced by OEMs, we doubt that in-serviceaircraft Sellers will see much improvement any time soon especially if their aircrafts Quality Rating is in the lower half ofthe range.

Medium Jets: ETP Ratio worsened slightly, increasing to 54.0%

AEA Q1 2016 AvionicsMarket ReportIn the first three months of 2016, total worldwide Businessand General Aviation avionics sales amounted to >$566m,reports AEA...The Q1 2016 figure represented a -3.6% decrease in salescompared to Q1 2015, which was >$587m. The $566mreported for Q1 2016 (using net sales price) includes allBusiness & General Aviation aircraft electronic sales,excluding repairs and overhauls, extended warranty orsubscription services.Of the >$566m in Q1 2016 sales, 54.7% came from

forward-fit sales (avionics equipment installed by airframemanufacturers during original production). By contrast, theretrofit market (avionics equipment installed after originalproduction) amounted to 45.3% of Q1 sales.According to the companies that separated their total

sales figures between North America (US and Canada) andother international markets, 64.9% of the Q1 2016 salesvolume occurred in North America while 35.1% took place inother international markets.It's disappointing that total worldwide sales are off to a

slower start compared to the first three months a year ago,summarized AEA President Paula Derks. Sales in theforward-fit market were nearly identical to last year, so theoverall decline was mostly felt in the retrofit market. Withmore than 30 new avionics products and services introducedto the market at the recent AEA Convention, industry willhopefully see improved sales figures later this year.MI www.aea.net/marketreport

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from 53.3%, but remained noticeably below thegroups 12-month 57.0% average. With thegroups Ask Price decreasing another 1.5%,prospective Buyers can find good values and areencouraged to act.

Small Jets: ETP Ratio worsened slightly for thisgroup too, increasing to 67.0% from Marchs 12-month low of 66.3%. Ask Price, on the otherhand, continued climbing, registering anotherrecord high at $2.21m. While this might be goodnews for some Sellers, Asset Insight does notbelieve the price increases are sustainable, andbelieves market saturation is approaching for anumber of popular models.

Turboprops: The groups ETP Ratio was secondbest among all sectors but worsened noticeably,increasing to 44.7% from last months 43.5% just below the groups 12-month 44.8% average while Ask Price increased under $10k to matchthe groups annual average. Over the past 12months, the Ask Price high/low differential hasbeen under $81k, making large value swings forthis group unlikely.

Market SummaryAsset quality of the For Sale fleet continues to beExcellent, with this months figure only slightly belowMarchs record best. With overall Ask Prices at an all-time low, great values are available within all groups with the possible exception of a few Small Jetmodels. Most Sellers that assumed their asset wouldincrease in value are probably not pleased rightabout now. For those not making that mistake, theiraircrafts Asset Quality Rating will play a major role inits marketability.

As for Buyers, it is statistically unlikely they will seeasset quality post a substantially better figure thanwhat is presently available, so there is every reasonto act but only after appropriate due diligence.Remember, a low price does not necessarily meangood value, and it could make you the assetsunintentional final owner.

MI www.assetinsightinc.com


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O'Gara Jets June.qxp_Layout 1 24/05/2016 17:05 Page 1

O'Gara Jets June.qxp_Layout 1 24/05/2016 17:06 Page 2

his was the lowest Q1 for unit deliveriessince 2012 and the fourth worst sincethe turn of the century. Deliveries inevery category of aircraft jets, turbo-

props and pistons were down, and total billingsfor the first three months of 2016 were listed at$4bn, down 9.5% from $4.4bn a year ago. Thereduction in billings indicates trouble in the high-end of the jet market, which had previously beenrelatively immune from the market difficulties ofless expensive aircraft in recent years.

As listed by aircraft category, jet deliveriestotaled 122 units, off 4.7% from 128 a year ago.Turboprops were reported at 109, down 6.8%from 117 in Q1 2015. Piston aircraft were essen-

tially flat at 191 units (off two units from 193 lastyear). GAMA President and CEO Pete Bunce citedretrenchment in the energy sector as well asglobal geopolitical and economic insecurity forthe markets difficulties.

Perhaps the soft market should not be toosurprising. Both Honeywell and JETNET iQ pre-dicted that the business jet market might not beas strong this year as it was in 2015. Based onthese Q1 results, the forecasters may prove to beaccurate.

Unfortunately, a change in how one jet makerreports its data is causing the GAMA report to bea less reliable indicator of subtle changes in themarket than it once was

GAMA Q1 2016 Shipment Analysis


Anyone looking for recovery in the business aircraft market will findthe Q1 2016 delivery numbers from GAMA a distinct disappointment,notes Mike Potts. GAMA reported new business aircraft shipmentstotaled 422 units, down 3.7% from the 438 shipped in Q1 2015....

T

BIZAV INTELLIGENCE OEM SHIPMENTS

Mike Potts is respect-ed industry-wide as anaviation journalist. Hehas worked in thecommunicationsdepartments of BeechAircraft, SinoSwearingen and M7Aerospace, and hasbeen analyzingGAMAs deliveryreports for AvBuyersince 2003 where hehas built an excellenttrack record for accu-rate shipment predic-tions. Contact him [email protected]

GAMA June16.qxp_GAMA DEC05 24/05/2016 09:33 Page 1

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The Jet MarketJet deliveries are off to their worst startsince 2004 when just 114 jets delivered inthe first three months. First, however, a littlehistory to help offer perspective:

The worst year for jet deliveries in the21st century was 2003, when just 101 jetswould be delivered in Q1, and 518 for thewhole year. The second weakest year was2004, although the market was picking upfairly strongly from 2003, so at the timethings will have seemed good. In fact 2004marked the beginning of the big turn-around. The market would explode overthe next five years, peaking at 1,313 jetdeliveries in 2008.

The over-heated market of 2007-2008was unsustainable. Accompanied by aworldwide financial crisis that began at theend of 2008, the jet market plummetedand never recovered. For a time there wasspeculation about when the market mightreturn to levels above 1,000 jets per year.The consensus now is that it wont happenin this decade and deliveries in the 1,200range may never recur at all.

Today, an 800-unit annual jet marketwould be considered a significant recovery.The last time we were there was 2009when deliveries reached 870. Since 2010jet deliveries have been in the high 600s tolow 700s, peaking in 2014 at 722. Basedon this years start we may do well to reach700 jet deliveries at the end of 2016.

This years jet market is actually a littlebigger than the 122 units GAMA is report-ing. Thats because Dassault is only report-ing its delivery total every six months ratherthan quarterly. The change is related tohow Dassault reports its overall financialresults, but the impact will affect the GAMAreport from this point forward, causing thejet market for Q1 and Q3 to be somewhatunderstated.

To keep the YoY numbers comparable,at least for this past quarter, GAMA hasreduced the 2015 jet total in its comparisonreport removing the Dassault Q1 2015delivery total (6 units). Would Q1 2016 stillbe the worst for jet deliveries since 2004 ifDassault had reported? Perhaps - butbased on the performance of its closestcompetitors, not very likely at all.

Of the eight jet OEMs reporting deliver-ies to GAMA, four had improved resultsand four lagged behind their 2015 per-formance. Among the four with negativeresults were both of the major big cabin jetbuilders, Bombardier and Gulfstream,which had double-digit percentage reduc-tions. If Dassaults performance was similar,its total might have pushed 2016s Q1 jettotal above 2012s, making 2016 only the

second worst Q1 for jet deliveries since2004. Bolstered by the delivery of seven ofits new Latitude models, Cessna capturedfirst place in the business jet category aposition it routinely held up until the mid-dle of 2012 but has since ceded toBombardier when the market for lighterjets softened. Cessna finished Q1 with 34deliveries, up by a single unit from the 33 ithad last year. Bombardier finished in sec-ond position with 31 deliveries, down31.1% percent from the 45 it reported inQ1 2015.

Gulfstream was third in jet deliverieswith 27 units, down from 32 a year ago. Inspite of this percent reduction, Gulfstreamis still in its typical first place position forbillings with a total $1.39bn. Bombardierwas second with $1.28bn.

As it did with the unit deliveries, GAMA

adjusted its billings numbers for compari-son purposes to account for Dassaultreporting no Q1 2016 billings. Dassault hadcontributed $212m to the $4.59bn GAMAreported in Q1 2015.

Fourth place in jet deliveries went toEmbraer with 23 units, up an astonishing83.3% from a year ago when it shipped 12.Like Cessna, Embraers total was boostedby deliveries its new Legacy 500 model.

In some respects what didnt happen inthe jet market in Q1 is as interesting aswhat did occur. Hondas deliveries wereexpected to accelerate sharply now thatthe HondaJet is certified. The companyforecast delivery of 36 or more units thisyear, but in Q1 only three were made,putting Honda in a tie for fifth place in jetdeliveries with One Aviation (formerlyEclipse).




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Honda and One were among the fourjet OEMs with increased deliveries for thequarter, with Honda up from zero last yearand One up from two units. A strong per-formance from Honda over the remainderof the year could go a long way to sal-vaging the jet market for 2016.

The Turboprop MarketIn the turboprop market the news is a littlebetter than the GAMA report would ini-tially reveal. Deliveries of twin-engine tur-boprops are actually ahead of last year by3.85%. Single-engine turboprops are lag-ging last years market, but much of theshortfall is in the agricultural aircraft and isthus unrelated to Business Aviation ship-ments.

Among the traditional business aircraftmanufacturers, single engine deliveriestotaled 45 aircraft, three units off the Q12015 total. Of the eight traditional turbo-prop manufacturers, two had improvedresults, three matched their 2015 total in2016 and three reported fewer deliveriesthis year than last.

Textron Aviations Beechcraft divisionled the business turboprop market with 26units, up one from the 25 it reported lastyear. Pilatus took second place with 19

deliveries, up more than 171% from theseven it shipped in Q1 last year. Thirdplace in the business turboprop marketwas Cessna, with 12 deliveries down onefrom Q1 2015s 13 shipments.

Quest and DAHER were tied for fourthplace with five units each. For DAHER thatrepresented a shortfall of six units fromthe 11 it delivered in Q1 2015. Questmatched its Q1 2015 total. Accounting forthe balance of the business turbopropdeliveries were Piper (2, down from 11 ayear ago), Pacific Aerospace (1) andPiaggio with one (matching its Q1 2015performance).

Piston SummaryIn the piston category this years total of191 units almost matched last years 193unit benchmark. GAMA cited stability inthe piston market as something of ahighlight. It turns out that piston marketstability is a product of a sharp upturn inpiston twin deliveries (better than 41%)balancing a shallow downturn (about5%) in single-engine piston sales.

Among the piston OEMs, five hadimproved single-engine deliveries, sevenwere down from and year ago and onewas even. Leading the single-engine pis-

ton market by a wide margin was Cirrus(57 units, up from 43). Thats a gain of32.6% over Q1 2015. Coming in a distantsecond was Cessna, with 27 deliveries,down from the 44 it reported in Q1 2015.

Piston twin deliveries totaled 24 units,with Diamond leading the pack at 10.Diamonds total was boosted by theintroduction of its new DA-62 model.Also delivering piston twins wereTecnam with eight, Textron AviationsBeechcraft unit with five and Piper withone.

GAMA has long asserted that theintroduction of new models stimulatesthe market. The Q1 2016 report containssignificant evidence to support thatclaim, with new models in all three cate-gories seeming to drive their builders toimproved sales.

Its just unfortunate that so many newaircraft seem to be arriving on the scenewhen the market seems to be lagging. Itwill be interesting to see if the marketwill pick up as the year unfolds or if weare in for another disappointing year innew business aircraft shipments.

View GAMAs Q1 2016 Shipment Report in fullon page 42


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3,258 Total Time. Engines and APU on MSP. Increased Gross Weight Mod. AVTRAK Maintenance Tracking.

2 0 0 2 L e a r j e t 4 5 s /n 2 1 4

2,042 Total Time. One US Owner Since New. Service Center Maintained. TCAS II. XM Weather. Iridium Phone.

2 0 07 K i n g A i r 3 5 0 s /n F L- 5 5 9

7,696 Total Time. Pro Line 21/IFIS 5000. High Flotation Gear. Raisebeck Modifications.

1 9 8 4 K i n g A i r 3 0 0 s /n FA 3 3

7,950 Total Time. Engines ESP Gold. 3 Rotor Brakes. Fire Blocked. RVSM Compliant.

1 9 9 3 L e a r j e t 6 0 s /n 2 3

11,596 Total Time. Excellent Maintenance History. Engines on MSP Gold. CAMP/CESSCOM.

1 9 8 7 C e s s n a C i t a t i o n I I I s /n 1 4 0

World AvBuyer Ad 5_18_16.indd 1 5/17/2016 8:38:49 AM



2016 First Quarter Shipment Report

MAKE & MODEL Q1 YTD MAKE & MODEL Q1 YTDAIRBUS CORPORATE JETS 7

ACJ318 0 0

ACJ319 0 0

ACJ320 0 0

ACJ321 0 0

ACJ330 0 0

TOTAL UNITS 0 0

TOTAL BILLINGS7 $0 $0

AMERICAN CHAMPION AIRCRAFT

7EC CHAMP 1 1

7ECA CITABRIA AURORA 0 0

7GCAA CITABRIA ADVENTURER 0 0

7GCBC CITABRIA EXPLORER 0 0

8GCBC SCOUT 2 2

8KCAB SUPER DECATHLON 2 2

8KCAB XTREME DECATHLON 0 0

TOTAL UNITS 5 5

TOTAL BILLINGS $1,115,500 $1,115,500

BOEING BUSINESS JETS 7

BBJ 1 1

BBJ 2 0 0

BBJ 3 0 0

B777-300ER 0 0

B787-8 0 0

B787-9 0 0

TOTAL UNITS 1 1

TOTAL BILLINGS 7 $60,000,000 $60,000,000

BOMBARDIER

LEARJET 70 / 75 1 1

LEARJET 60XR 0 0

CHALLENGER 350 14 14

CHALLENGER 605 2 2

GLOBAL 5000 / 6000 14 14

CL850 / 870 / 890 0 0

TOTAL UNITS 31 31

TOTAL BILLINGS $1,276,000,000 $1,276,000,000

CIRRUS AIRCRAFT

CIRRUS SR20 10 10

CIRRUS SR22 20 20

CIRRUS SR22T 27 27

TOTAL UNITS 57 57

TOTAL BILLINGS $42,149,050 $42,149,050

DAHER

TBM 900 5 5

TBM 930 0 0

TOTAL UNITS 5 5

TOTAL BILLINGS $19,450,000 $19,450,000

DASSAULT FALCON JET 5, 8

2000S/ 2000LXS / 900LX / 7X 0 0

TOTAL UNITS 0 0

TOTAL BILLINGS $0 $0

DIAMOND AIRCRAFT 5,6

HK-36 0 0

DA20-C1 7 7

DA40 (ALL) 13 13

DA42 (ALL) 7 7

DA62 3 3

TOTAL UNITS 30 30

TOTAL BILLINGS $16,060,600 $16,060,600

DISCOVERY AVIATION

XL2 0 0

TOTAL UNITS 0 0

TOTAL BILLINGS $0 $0

EMBRAER 5

PHENOM 100E 1 1

PHENOM 300 11 11

LEGACY 450 0 0

LEGACY 500 5 5

LEGACY 600 / 650 6 6

LINEAGE 1000 / E190 HEAD OF STATE 0 0

SHUTTLES (ERJs AND E-JETS) 0 0

TOTAL UNITS 23 23

TOTAL BILLINGS $375,881,600 $375,881,600

EXTRA AVIATION

EA300 7 7

TOTAL UNITS 7 7

TOTAL BILLINGS $2,415,000 $2,415,000

GULFSTREAM AEROSPACE CORP. 5

GULFSTREAM 150 / 280 8 8

GULFSTREAM 450 / 550 / 650 / 650ER 19 19

TOTAL UNITS 27 27

TOTAL BILLINGS $1,385,800,000 $1,385,800,000

HONDA AIRCRAFT COMPANY 5

HA-420 HONDA JET 3 3

TOTAL UNITS 3 3

TOTAL BILLINGS $13,500,000 $13,500,000

MAHINDRA AEROSPACE 5

AIRVAN 8 2 2

TOTAL UNITS 2 2

TOTAL BILLINGS $1,453,920 $1,453,920

MAULE AIR, INC.

MX-7-180C 1 1

TOTAL UNITS 1 1

TOTAL BILLINGS $207,810 $207,810


MAKE & MODEL Q1 YTD MAKE & MODEL Q1 YTDMOONEY INTERNATIONAL CORP.

M20R OVATION 0 0

M20TN ACCLAIM 2 2

TOTAL UNITS 2 2

TOTAL BILLINGS $1,467,000 $1,467,000

ONE AVIATION CORP.

ECLIPSE 550 3 3

TOTAL UNITS 3 3

TOTAL BILLINGS $9,251,000 $9,251,000

PACIFIC AEROSPACE LTD.

PAC 750XL 1 1

TOTAL UNITS 1 1

TOTAL BILLINGS $1,800,000 $1,800,000

PIAGGIO AEROSPACE

P.180 AVANTI EVO 1 1

TOTAL UNITS 1 1

TOTAL BILLINGS $7,395,000 $7,395,000

PILATUS

PC-6 3 3

PC-12 16 16

TOTAL UNITS 19 19

TOTAL BILLINGS $83,745,000 $83,745,000

PIPER AIRCRAFT, INC

PA-28-161 WARRIOR III 5 5

PA-28-181 ARCHER III 3 3

PA-28R-201 ARROW 7 7

PA-34-220T SENECA V 0 0

PA-44-180 SEMINOLE 1 1

PA-46-350P MIRAGE M350 4 4

PA-46R-350T MATRIX 0 0

PA-46-500TP MERIDIAN M500 2 2

TOTAL UNITS 22 22

TOTAL BILLINGS $14,311,429 $14,311,429

QUEST AIRCRAFT COMPANY

KODIAK 100 5 5

TOTAL UNITS 5 5

TOTAL BILLINGS $10,075,000 $10,075,000

TECNAM AIRCRAFT

ASTM - LSA 20 20

P2002JF 6 6

P92JS 1 1

P2002JR 0 0

P2008JC 4 4

P2006T 8 8

P2010P TWENTY TEN 7 7

TOTAL UNITS 46 46

TOTAL BILLINGS $9,866,016 $9,866,016

TEXTRON AVIATION 4, 5 (BEECHCRAFT CORPORATION)

BONANZA G36 6 6

BARON G58 5 5

KING AIR C90GTX 5 5

KING AIR 250 6 6

KING AIR 350I / ER 15 15

TOTAL UNITS 37 37

TOTAL BILLINGS (BEECHCRAFT - TOTAL) $181,481,188 $181,481,188

TEXTRON AVIATION 4, 5 (CESSNA AIRCRAFT COMPANY)

CE-172S SKYHAWK SP 9 9

CE-182T SKYLANE 6 6

CE-T206H TURBO STATIONAIR 5 5

CE-240 TTX 7 7

CE-208 CARAVAN 675 3 3

CE-208B GRAND CARAVAN EX 9 9

CE-510 CITATION MUSTANG 1 1

CE-525 CITATION M2 4 4

CE-525B CITATION CJ3+ 5 5

CE-525C CITATION CJ4 7 7

CE-560 CITATION XLS+ 6 6

CE-680 CITATION SOVEREIGN+ 2 2

CE-680A CITATION LATITUDE 7 7

CE-750 CITATION X+ 2 2

TOTAL UNITS 73 73

TOTAL BILLINGS (CESSNA - TOTAL) $439,805,100 $439,805,100

TOTAL BILLINGS (COMBINED) $621,286,288 $621,286,288

WACO AIRCRAFT COMPANY

2T-1A-2 1 1

YMF-5D 1 1

TOTAL UNITS 2 2

TOTAL BILLINGS $757,000 $757,000

GRAND TOTAL CIVIL AIRCRAFT SHIPMENTS6 422 422

GRAND TOTAL AIRCRAFT BILLINGS $3,975,232,559 $3,975,232,559

Q1 YTD

Airplane shipments 1, 2, 6 Manufactured Worldwide

NOTES: 1. A shipment occurs when an aircraft is shipped from its production facility to a customer located anywhere in theworld. 2. Shipments may include deliveries to a fractional operator owned by the company or to an aircraft dealer.3. Aircraft are considered manufactured in the U.S. when produced under an FAA production approval and in Europewhen under an EASA production approval. 4. Military aircraft shipments are not included in shipment table totals.5. Company billings are not reported. Where available, GAMA estimates total billings using public information includingB&CA Purchase Planning Handbook 2016. 6. Diamond Aircraft HK36 Motor Glider models are included in civil make-model shipment total, but not summary tables. GAMA will further integrate CS-VLA and S-LSA aircraft into future ship-ment reports. 7. Airbus and Boeing twin aisle shipments are identified in the report, but their value is not included inthe calculation of billings. 8. Dassault reports combined civil airplane deliveries twice a year in accordance withcompany financial reporting procedures.

SINGLE-ENGINE PISTON 167 167MULTI-ENGINE PISTON 24 24TOTAL PISTON 191 191SINGLE-ENGINE TURBOPROPS 82 82MULTI-ENGINE TURBOPROPS 27 27TOTAL TURBOPROP AIRPLANES 109 109BUSINESS JETS 122 122TOTAL TURBINE 231 231GRAND TOTAL 422 422GRAND TOTAL AIRPLANE BILLINGS $3,975,232,559 $3,975,232,559



Elliott June.qxp_Layout 1 24/05/2016 17:18 Page 1

Elliott June.qxp_Layout 1 24/05/2016 17:19 Page 2

ach quarter, many of us analyze theBusiness Aviation market activityseeking new trends or, even better,some indication that we are on a path

back to the golden years of eight years ago. Fuelprices remain low and corporate profits remainstrong, but GDP growth has been disappointingand new business jet sales remain sluggish.

Pre-owned aircraft inventories declined lastyear, fueling our optimism that business jet salesfor the second half of 2015 would increase - butit was not to be.

As we continue to take the pulse of theBusiness Aviation market, this month wellprovide an update by quarter to see if we canspot a new trend, or whether we must settle formore of the same...

New Business Aviation ShipmentsQ1 2001-2016The entire industry is feeling the impact ofretrenchment in the energy sector as well asgeopolitical and economic security, Presidentand CEO Pete Bunce stated in GAMAs recentQ1 2016 report. Table A (left) shows theshipments from 2001 to 2016 for business jets,turboprops and piston aircraft. Highlighted inyellow are Q1s highest level of shipments foreach segment.

Furthermore, Table A shows the 16-yearaverage across all three General Aviation sectors.Its particularly interesting to note that the 2016Q1 result is below the same period for 2015 inall sectors, but that it also matched the sameshipment numbers for business jets as reportedin 2012.

These two years are the lowest business jetshipment numbers in the post-recession period.Note, however, that Dassault Falcon now onlyreports its shipment data twice a year (in Q2 andQ4), so the actual Q1 2016 number of jetsshipped is likely to be slightly higher. Formeasure, Dassault reported six business jet


BIZAV INTELLIGENCE JETNET >>KNOW MORE

EIn this months JETNET >>KNOW MORE analysisMike Chase and Marj Rose assess Q1 2016 newand used Business Aviation market trends

Q1 2016 Business AircraftMarket Update

Are There New Trends or Just More of the Same?

Jetnet KnowMore.qxp_Layout 1 24/05/2016 14:24 Page 1

shipments in Q1 2015. New business jetdeliveries decreased by six units (- 4.7%)compared to the 128 reported in Q1 2015.

Pre-owned Business Jets For SaleFocusing now on the used jet market, Table B(right) shows the March-ending changes from2005 to 2016 in the business jet in-operationfleet; number For Sale; percentage For Sale;and the Year-over-Year (Yr/Yr) balance pointchange (i.e. 11.7% less 11.3% equals +0.4 pointincrease).

March 2016 is the first March-ending periodthat the percentage For Sale and Yr/Yr balancepoints have increased since March 2009(highlighted in yellow).

In 2009, as the recession struck, there was anexplosion of 1,095 more business jets listed ForSale as compared to one year prior. What thenfollowed was a six-year trend towards recovery asthe market slowly shed inventory and movedcloser to being a healthy Sellers market... thatis, until this year, when the percentage wentpositive again with 155 more business jets listedFor Sale than in March 2015.

While this increase is a far cry from thepronounced spike of 2009, March 2016 must beregarded as a disappointing step backwards forthe business jet market.

Pre-Owned Full Retail Sale TransactionsIn total, there were 23 (4.4%) more business jettransactions in Q1 2016 compared with Q1 2015.The comparisons in Table C (right) illustratewhere the changes occurred by aircraft weightgroup. Two of the weight classes (Heavy >35,000lbs. and Medium 20,001-35,000 lbs.) showedmore transactions, and the other two (Light10,001-20,000 lbs. and VLJ

BIZAV INTELLIGENCE MARKET INSIGHTS

ccording to a Chinese proverb, If you would know theroad ahead, ask someone who has traveled it. In theprofession of brokering business aircraft, fewpractitioners have traveled more miles than the

associates at Welsch Aviation. Founded over 67 years ago byJames C. Welsch, Sr., a sales professional for venerablecompanies such as Aeronca and Stinson from the late 1920s andfor Cessna immediately following World War II.Welsch Aviation began its current brokerage business with a

single office at LaGuardia Airports Marine Air Terminal in 1949.Before there were business jetsfully a decade before theGulfstream G-I turboprop entered the corporate sceneJimWelsch was brokering converted military and airline aircraft, suchas Douglas C-47s, Consolidated Convairs and LockheedConstellations to corporate America. US Steel purchased its firstcompany aircraft, a modified Lockheed Lodestar, utilizing theservices of Welsch Aviation in the early 1950s.As a candidate for the US Presidency in 1960, John F. Kennedy

was provided access to a Convair 240 that Jim Welsch brokeredto his father, Joseph P. Kennedy. Named after JFKs daughter, theCaroline was the first aircraft to be used by a presidentialcandidate and continued to serve the Kennedy family until 1967.As Welsch Aviation grewits operation currently includes

offices in Washington, DC, New York, Georgia and Texasmanagement transitioned to James Welsch, Jr. In 1987 K. HunterWeiss joined the firm as an Associate, in 1996 became a Partner,and assumed the title of President in 2014.Hunter, based out of the headquarters office in Washington,

DC, is also a member of a venerable line of Business Aviationprofessionals. His father joined Welsch Aviation in the early 1980sfollowing a number of years as a US Air Force fighter pilot andextensive experience with corporate aircraft manufacturers.Continuing his familys commitment to aviation, Hunter devotedhis career to the concept that business aircraft are essential toolsfor business development. Supporting Welsch Aviation clients, hepractices an in-depth and straightforward approach toprofessional representation.Others at Welsch are passionate practitioners of aviation.

Robert Hart, Senior Director of Sales in Welsch Aviations Georgiaoffice has enjoyed success in the sales arena for almost 40 years.Moreover, Senior Director of Sales Edward Vesely managesWelsch Aviations Texas Office as his day job, yet finds time to flythe only operative Curtiss SB2C-5 Helldiver in airshows for theCommemorative Air Force. The least tenured of Welschs brokershas 23 years of service with the firm.

Brokerage OnlySince its inception, Welsch Aviation has engaged solely inbrokering a clients aircraft. The firm neither buys nor holds

inventory, focusing instead on securing exclusive contracts to bethe clients representative. No funds are exchanged until atransaction occurs; Welsch Aviation assumes the risk that itsefforts on behalf of its client will result in a successful sale.All aspects of the process are managed by Welschs team of

experts. Among its four offices, Welsch handles between oneand two dozen engagements simultaneously. The typical periodfor a sale to be consummated is about 180 days. Most ofWelschs relationships are repeat business, and new clientstypically are referred from its existing customer base. The firm isproud of its tradition for reliability, integrity and hands-on dealingwith its clients.

Market Prospects?Hunter Weiss is confident that Business Aviation will remain avital aspect of a corporations transportation solution. There isalways going to be a need for business aircraft, he told AvBuyer,recently. The Scheduled Airlines do not serve many city pairsin fact only one-fifth of the airports that entrepreneurs typicallyneed to reach.After 67 years supporting the Business Aviation community,

our firm has seen many cycles. The current cycle appears to bean overcorrection. We feel that the loss of residual value currentlybeing experienced will shrink. The need for a business aircraft isreal and growing. Just consider the difficulty of servicing andgrowing a corporations market without the advantages thatbusiness aircraft offer. There are many companies that would nothave been successful without the use of Business Aviation.Admittedly, continued Hunter, the brokerage business has

become more complicated as we conduct searches andevaluations of every type of aircraft throughout the globe to findthe exact make, model, avionics suite and accouterments for ourclients. We deal with many experts, from accountants to taxspecialists to aviation lawyers with experience in domestic andinternational transactions. Pre-purchase inspections that oncerequired a day or two now consume several weeks. BusinessAviation has matured, and our capabilities have grown to meetthe challenges.In particular, Welsch faces the challenge of differentiating our

firm from the dealer community. Being a broker is not the sameas being a firm that sells either its own inventory and/or a clientsaircraft, observed Hunter. Being a pure broker is in fact theantithesis of the dealer-broker. We feel there is a conflict ofinterest when a dealer represents inventoried and representedaircraft, even if the firm has the best of intentions.We take our tag lineA higher plane since 1949very

seriously, he concluded.

More information from www.welschaviation.com

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avbuyer magazine june 2016

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