aircraft market update

  • Tracey Cheek posted an article
    Jet Transactions Releases Q1 2019 Bombardier Market Update see more

    NAFA member Brant Dahlfors, co-founder of Jet Transactions, shares the Q1 2019 Bombardier Market Update.

    Welcome to another year of uncertainty fueled by declining Global GDP, trade wars and geo- political concerns in major trading markets around the world. The drop in trading activity in the last month of Q4-18 certainly dribbled into early Q1-19. By late-January however activity clearly increased to Oct/Nov levels raising hopes that 2019 would actually show positive growth across new and used aircraft. By the end of Q1 market signals are mixed at best. Charter activity is showing signs of decline as we start the year. This is something to pay close attention to as charter activity is often a “canary in the coal mine” signal.

    New aircraft deliveries are down quarter over quarter which is consistent with the seasonality effect as OEMs pull as many aircraft into the fourth quarter as possible. The major OEMs all have new models starting with deliveries beginning from mid-2018 through mid-2020. With low starting production rates, the industry will not see the full effect for another year and a half to two years. On the positive side the OEMs crystal balls all indicate there is a solid market for new high tech models with more range, speed, cabin space and efficiency. In spite of the 8+ new models recently, or soon to be certified, we expect several new exciting airplanes to be introduced before year-end.

    How does this affect the Bombardier pre-owned market? After a strong end to 2018, Bombardier saw an about average seasonal slowdown of factory new sales, dropping to 9 new units delivered in the first quarter of the year. The total number of pre-owned units for sale rose 11%, and while the older Globals have all crossed above 10% of their respective fleets for sale, the Challenger markets have stayed strong across the board with less than 5% of their respective fleets for sale. With the first GL7500 now in service and many more gearing up to be delivered in the coming months, Bombardier should continue to see strong demand for both pre-owned and new inventory this year.

    Click here to view the full market update.

    This market update was originally published by Jet Transactions on April 30, 2019. 

  • Tracey Cheek posted an article
    Jet Transactions Q4 Bombardier Market Update see more

    NAFA member, Brant Dahlfors, Co-Founder of Jet Transactions, shares the Q4 Bombardier Market update.

    2018 continued its upward trend and ended the year with both new and used deliveries and orders up over 2017. However, the big-bang Q4, that so many projected, seemed to be over by mid-November aided by an increasingly caustic political environment, slowing GDP (worldwide), wild stock market gyrations and finally the threat of a Government shut down that materialized by the end of the Qtr. It wasn’t a bad quarter, it just wasn’t a great quarter as buyer caution outweighed the tax benefit fueled activity, which we began seeing in Q2 & Q3. The caution was also evident in aircraft activity which on a whole was down 0.5% Year over Year according to flight tracking data from Argus International.

    The future remains exciting nonetheless. We saw new certifications in 2018 of the G500 and Global 7500. 2019 will celebrate more exciting aircraft with the G600, Global 5500/6500 and Embraer Praetor 400/500 all due for certification. We expect 2019 to be a tougher growth year as new models will be in low ramp up production rates and the inventory of later model pre-owned aircraft remain low.

    How does this affect the Bombardier pre-owned market? Bombardier products ended the year on a high note, with overall inventory levels down nearly 11% year over year across all tracked models and pre-owned sales rose 30% over the previous quarter. Q4 saw substantial jumps in new units delivered as well compared to Q3-18, though up just 1 unit from last year’s close. Most of the market remains at healthy levels, with only the GL5000 Classic and Vision models inching above 10% of the fleet for sale, respectively. With the GL7500 now approved by both the American and Canadian aviation authorities, 2019 should prove to be a continual improving year for the OEM.

    Click here to see the full report.

    This report was originally published in Jet Transactions newsletter on 1/21/19.

     

  • Tracey Cheek posted an article
    JetTransactions Gulfstream Q4 2018 Quarterly Market Update see more

    NAFA members, Mark Bloomer and Brant Dahlfors, co-founders of Jet Transactions, share the Q4 2018 Market Update.

    2018 continued its upward trend and ended the year with both new and used deliveries and orders up over 2017. However, the big-bang Q4, that so many projected, seemed to be over by mid-November aided by an increasingly caustic political environment, slowing GDP (worldwide), wild stock market gyrations and finally the threat of a Government shut down that materialized by the end of the Qtr. It wasn’t a bad quarter, it just wasn’t a great quarter as buyer caution outweighed the tax benefit fueled activity, which we began seeing in Q2 & Q3. The caution was also evident in aircraft activity which on a whole was down 0.5% Year over Year according to flight tracking data from Argus International.

    The future remains exciting nonetheless. We saw new certifications in 2018 of the G500 and Global 7500. 2019 will celebrate more exciting aircraft with the G600, Global 5500/6500 and Embraer Praetor 400/500 all due for certification. We expect 2019 to be a tougher growth year as new models will be in low ramp up production rates and the inventory of later model pre-owned aircraft remain low.

    How does this affect the Gulfstream pre-owned market? Q4-18 saw a nice jump in activity for both pre-owned and new sales, with an 18% and 63% rise respectively. The G500 is now in service and in the hands of customers both domestically and abroad, and the G600 should be entering service later this year. Owners can look forward to the impressive speed capabilities of both aircraft combined with the legendary Gulfstream cabins. Across the pre-owned market, inventory levels rose roughly 4%, with all tracked models remaining below 10% of the fleet for sale. GIV-SP’s and G450’s saw an amazing year for pre-owned sales, while the newer and larger G650 and G650ER’s slowed down to round out the year.

    Click here to view full report.

    This article was originally published by Jet Transactions on January 21, 2019. 

  • Tracey Cheek posted an article
    NAFA member, Hagerty Jet Group, releases the Q3 2018 Gulfstream Aircraft Quarterly Market Update. see more

    NAFA member, Hagerty Jet Group, releases the Q3 2018 Gulfstream Aircraft Quarterly Market Update.

    Boundless Timelines

    Introducing new aircraft to the market is a difficult gamble. The research and development resources, capital risk, and human demands required to bring a new product to market is a long-term proposition with many near-term unknowns. This makes it all the more interesting when delivery problems extend to contract relationships and budget overruns, rather than technical limitations. Such is the case with Gulfstream’s G500 and G600. Both aircraft continue to experience delays because of issues in their engine supply chain. Meanwhile, Bombardier is forging ahead with lower risk refinements to their existing product line. Let’s look at some of the struggles at Gulfstream and how the delays are creating opportunities for other industry manufacturers.

    In 2014 Gulfstream announced that it had selected Pratt & Whitney Canada to supply variants of their PW800 engines to power their all-new G500 and G600 airplanes. (This decision broke 60 years of tradition with Rolls Royce powerplants dating back to the Dart 529 engines on the GI) The supply contract with P&W also included the engine nacelles (aerodynamic covers for the engine) and thrust reversers (movable scoops behind the engine that redirect air forwards during landing to aid stopping). Pratt & Whitney Canada in turn chose to subcontract the nacelles and thrust reversers to the NORDAM group, a Tulsa, Oklahoma based company that supplies a wide range of parts and subassemblies to several OEMs.

    As is often the case when developing a newly designed aero engine, Pratt & Whitney Canada had to work to rectify several technical issues that became evident during the G500/G600 test program. While these technical issues are now resolved, the solution drove additional engineering and production costs to NORDAM to accommodate the design changes affecting the nacelles. NORDAM abruptly entered bankruptcy in July 2018 and halted production of PW800 nacelles, naming challenges with Pratt & Whitney Canada as the reason NORDAM claims in bankruptcy filings that over $200M of nonrecurrent engineering and manufacturing cost overruns stemming from design changes made ongoing nacelle production unprofitable within the terms of their existing contract.

    With the NORDAM group immersed in bankruptcy, production for the G500/G600 nacelles and thrust reversers remained indefinitely halted. These components are not available from any other manufacturer, so while Gulfstream continued to manufacture airframes, the company would be unable to meet customer deliveries until their sub-supplier produced nacelles. Exercising their best — and frankly only — option, Gulfstream purchased the interest in the PW800 series nacelle program from NORDAM in September 2018 to fix the gap in their supply chain.

    Click here to read the full report.

    The original market update was published by Hagerty Jet Group in October 2018.

  • Tracey Cheek posted an article
    AMSTAT's Business Jet and Turbo‐Prop Resale Market Update for the first six months of 2018. see more

    Tinton Falls, NJ – August 9, 2018: According to AMSTAT, 5.0% of the Heavy Jet market group turned over in the first six months of the year, the best first six months in this group since 2007.

    The report breaks the market into Heavy Jet (>=40,000 lbs), Medium Jet (20‐40,000 lbs), Light Jet (<20,000 lbs) and Turbo‐Prop groups and then further reviews these groups using the following age segments: Newer (<=10 years), Mid‐Age (11‐20 years) and Older (>20 years). Below we use the abbreviation “H1” to describe the first half of the year.

    First Half 2018 Resale Retail Transaction performance was better in Larger and Newer market groups and segments:

    • At a macro level, there were modest increases in the number of Jets and Turbo‐props sold in the first half of the year compared to 2017 (see Historical Perspective charts 1 & 2), but the overall active population of these aircraft also increased. A more relevant comparison is to look at the percentage of the active fleet that sold by group and age segments (see Historical Perspective chart 3).

    • Resale transaction activity in all Heavy Jet age segments performed better in H1 2018 than in the same period in 2017. In each Heavy Jet age segment the percentage of active fleet sold in H1 2018 increased over H1 2017 from: 4.2% to 5.7% in the Older segment, 5.0% to 6.0% in the Mid‐Age segment, and 3.2% to 3.9% in the Newer segment.

    • In the Medium Jet group 5.1% of the fleet sold in H1 2018. This matched transaction activity in the same period in 2017 which itself outperformed the first six months of the previous two years. At a segment level only the Older Medium Jet segment performance in H1 2018 beat the same 2017.

    • The Light Jet group did not perform as well with 4.8% of the fleet turning over in H1 2018 versus 5.1% during the first six months of 2017. Despite the overall Light Jet performance, 4.7% of the Newer Light Jet age segment turned over in H1 2018, exceeding 4.2% in H1 2017.

    • In the Turbo‐prop group, 3.9% of the fleet turned over in H1 2018, modestly up from 3.8% during the same period the year before. The Newer Turbo‐prop slightly underperformed H1 2017 with 3.7% of the fleet turning over in H1 2018 compared to 3.9% the year before. H1 2018 transaction activity in the Older and Mid‐Age Turbo‐prop groups exceeded transaction activity in these groups in H1 2017.

      Most market groups and age segments are reporting inventories at their lowest in many years:

    At a macro level, 9.1% of the Business Jet fleet is for sale, the lowest overall percentage since 1998; and 7.2% of the Turbo‐prop fleet is for sale, a historical low in this market. Historical Perspective chart 3 shows that the gap between major inventory peaks and troughs during the last two industry cycles was approximately 6 years. The contraction since the peak in inventory in 2009 has been running for 9 years so far.

    • 6.8% of the Heavy Jet fleet is for sale compared to 9.0% a year ago. This is the lowest percentage of Heavy Jets for sale since 1998. The greatest year‐over‐year contraction has occurred in the Mid‐Age (from 9.0% to 6.3%) and Newer (from 7.6% to 5.2%) Heavy Jet segments.

    • 9.2% of the Medium Jet fleet is for sale compared to 10.7% a year ago. This is the lowest percentage in this group since 2000. The greatest year‐over‐year contraction occurred in the Mid‐Age (from 11.6% to 9.6%) and Newer (from 6.2% to 4.8%) Medium Jet segments.

    • 10.7% of the Light Jet fleet is for sale compared to 11.7% a year ago. Contraction in the last 12 months has been particularly noticeable in the Newer segment with 5.6% for sale today versus 7.9% a year ago.

    • 7.2% of the Turbo‐prop fleet is currently for sale compared to 8.2% a year ago. This is the smallest amount of year‐over‐year contraction at the group level but a historical low for the Turbo‐prop market. The greatest year‐over‐year contraction in this market has been from 7.5% to 5.7% in the Mid‐Age Turbo‐prop segment.

      The Average Asking Price data shows recent increases in the newer aircraft segments:

    • The Average Asking Price for Newer Heavy Jets is at $26.5M up 8.1% year‐over‐year and 17.7% year‐to‐date. As always, we caution that this is a very small population of aircraft and so the Average Asking Price metric for this segment can be moved considerably by only a few changes. In this case, the Average Asking Price for Newer Heavy Jets jumped in June / July due to additions to the Gulfstream G650 and G650ER, Dassault Falcon 8X and Boeing Business Jet markets at asking prices that substantially moved the average. In contrast, the Average Asking Prices of Older and Mid‐Age Heavy Jets have remained largely unchanged on a year‐over‐year and year‐to‐date basis.

    • The Average Asking Price for Newer Medium Jets is at $7.2M up 4.4% year‐to‐date, although off 3.1% year‐to‐date. In comparison, the Older and Mid‐Age segments are off 16.9% and 9.5% year‐over‐year and 3.0% and 4.2% year‐to‐date.

    • The Average Asking Price for Newer Light Jets is at $3.3M off 2.0% year‐over‐year but up 4.8% year‐to‐date. In comparison, the Average Asking Price for Mid‐Age Light Jets is up 5.2% year‐over‐year and up 9.8% year‐to‐date to $1.9M. The Average Asking Price for Older Light Jets is now below $700K.

    • The Average Asking Price for Newer Turbo‐props is up 11.1% year‐to‐date to $2.9M and up 5.4% year‐over‐year. The Mid‐Age Turbo‐prop Average Asking Price is flat year‐over‐year but up 4.4% year‐to‐date to $1.7M. Average Asking Prices for Older Light Jets continue to slide.

      Read the full Market Update at AMSTAT.

  • Tracey Cheek posted an article
    AMSTAT releases latest Business Aircraft Resale Market Update Report showing slightly slower
    Busine
    see more

    AMSTAT releases latest Business Aircraft Resale Market Update Report showing slightly slower Business Jet resale transaction activity so far in 2016.


    Tinton Falls, NJ – October 24, 2016: According to AMSTAT, the first three quarters of 2016 saw a slightly
    lower percentage of the Business Jets and about the same percentage of Business Turbo‐Props turning
    over as resale transactions versus the same period in 2015.

    In the first three quarters of 2016, 7.1% of the global Business Jet fleet turned over. This percentage
    was down versus 7.4% in the same period in 2015. By comparison, 5.8% of the Business Turbo‐Prop
    fleet turned over versus 5.7% for the same period in 2015.

    Resale Retail Transaction activity year to date was up for Heavy Jets with 5.9% of the fleet turning over
    in the first 3 quarters of the year, compared to 5.5% for the same period in 2015. In contrast,
    transaction activity for the Medium Jets resulted in 7.1% of the fleet turning over versus 8.2% for the
    same period in 2015. For Light Jets and Turbo‐Props, Resale Retail Transaction activity was largely flat
    for the first 3 quarters of the year compared to the same three quarter period in 2015 (7.8% versus 7.9%
    and 5.8% versus 5.7% respectively).

    The report also shows that business aircraft inventory levels continue to climb but with some evidence
    of a recent plateauing in certain market segments. 10.8% of the Heavy Jet fleet is now for sale. This
    percentage is up from 10.4% at the start of 2016. Over the last 24 months more of this inventory has
    come from Newer Heavy Jets, with 10% of that fleet for sale today versus 8% in 2015. Today 11.6% of
    the Medium Jets fleet is available for sale versus 11.2% at the start of the year. As with Heavy Jets, it is
    the Newer Medium Jet models that are seeing their inventory increase the most. The Light Jet inventory
    is currently 11.8% of the active fleet. This up since the start of the year but flat compared to the same
    time last year. 8.5% of the Turbo‐Prop fleet is for sale, up since the start of 2016 but down from 8.7% a
    year ago.

    Average Asking Price trends have been a mixed bag so far in 2016. The Average Asking Price for a Heavy
    Jets is $13.9M down 6.6% year over year. The increase in Heavy Jet Resale Retail Transactions so far in
    2016 has not been enough to raise Average Asking Prices. The Average Asking Price for a Medium Jet is
    $3.4M, down 7.8% from a year ago which is consistent with falling Resale Retail Transaction activity and
    increasing inventory in this market segment. The Average Asking Price for Light Jets is $1.7M up 6.7%
    versus a year ago and $1.4M for Turbo‐Props up 5.5% versus a year ago. These are curious trends given
    that transaction activity and inventory levels are essentially flat in these markets.

    For a full copy of the report go to: http://www.amstatcorp.com/docs/APR‐MUR‐1024‐2016.pdf


    About AMSTAT, Inc.
    AMSTAT is the leading provider of market research information and services to the corporate aviation industry. Founded in 1982, and based in Tinton Falls, NJ, AMSTAT introduced the concept of providing researched information to corporate aviation professionals.

    AMSTAT’s mission is to provide timely, accurate, and objective market information to its customers. AMSTAT products and services provide aviation market and statistical information that generates revenue and delivers competitive advantage to brokers/dealers, finance companies, fractional providers, and suppliers of aircraft parts and services.

    Information:
    AMSTAT, Inc.
    Andrew Young
    New Jersey: (732) 530-6400 x147 / andrew@amstatcorp.com / www.amstatcorp.com