Hagerty Jet Group

  • Tracey Cheek posted an article
    Hagerty Jet Group Releases Q3 2019 Market Update for Gulfstream Aircraft see more

    NAFA member, Hagerty Jet Group, released the latest Gulfstream Aircraft Market Update.

    Will Gulfstream Announce 2 New Long-Range Models at NBAA 2019?

    In our Quarterly Market Update for Gulfstream Aircraft back in Q1 2017, Hagerty Jet Group commented that Gulfstream was overdue for a replacement or improvement to the G650. Almost 2 years later, we feel certain the announcement is finally here after years of development and speculation.

    Gulfstream recently updated their website and marketing materials. For reasons that should become obvious in the coming weeks, Gulfstream is no longer advertising the G650 – just the G650ER. This leads us to believe they will imminently launch two new models, likely to be named the G700 and G800. We think the G650ER will be replaced with a model, potentially called the G800, to match the nearly 8,000nm range. A second larger model with 4-zone cabin plus a dedicated crew rest area could be named the G700, which would be consistent with their branding and an estimated 7,000nm range.

    Back in 2017, we speculated that one of the key features we expect to see is the Symmetry Cockpit which was designed for the G500 and G600 and is receiving amazing feedback from operators. Gulfstream continues to stay ahead of the competition when it comes to technology, and it only makes sense for the latest technology to be available on their flagship aircraft.

    We don’t think there will be any need to modify the wing significantly. Since the wing
    fuel tank on the G650ER has never been used to its fullest capacity, we believe another 2,000 lbs. of fuel could be accommodated. The G650ER already has a published range of 7,500nm and has already broken world records over 8,000nm.

    We expect the G700 to have four dedicated cabin zones plus a crew rest area. Gulfstream will need to extend the fuselage by at least 8 feet to make this the longest Gulfstream ever. The longer fuselage will keep Gulfstream in competition with the Global 7500, which also features the four-zone configuration plus crew rest area. The G700 will probably include 2 more windows on each side which means more natural light in the cabin – one of the most impressive features on the Global 7500.

    With the larger and heavier airframe, something would have to be done with the power plants. Gulfstream chose the Pratt & Whitney model engines on the G500 and G600
    – a notable departure from the traditional Rolls Royce Engines. Although P&W likely competed for the new engine, we believe that Rolls Royce will partner with Gulfstream for the new models. It’s unlikely they have modified the BR-725 engine. The Pearl engine on the Global 6500 isn’t powerful enough. Perhaps the most exciting news we can expect

    is a clean sheet design engine specifically built for Gulfstream by Rolls Royce. If this is the case, loyal Gulfstream operators will be super pleased by the reunion of the two companies.

    The largest airshow in North America, NBAA, will be held in Las Vegas from October 22- 24. This is typically the most popular venue for new product launches. However, with less than 3 weeks from the big convention, there’s been no news out of the Savannah manufacturer. Details are being held closely under wraps. In typical Gulfstream fashion, we may expect to see at least one test aircraft on display at NBAA. The only thing better would be a completed G700.

    In the event the new products are announced, they will be the most notable headlines at NBAA in years and the demand to get on board the new models will be greater than ever.

    Click here to see the full report.  

    This report was originally published by Hagerty Jet Group on October 1, 2019.

  • Tracey Cheek posted an article
    Aircraft Broker Hagerty Jet Group Sees Gulfstream G550 Boost see more

    NAFA member Hagerty Jet Group discusses boost in Gulfstream G550 transactions.

    Aircraft brokerage Hagerty Jet Group has seen stronger-than-expected transaction volume for preowned Gulfstream jets in the first quarter of the year. The Savannah, Georgia-based Gulfstream specialist observed higher transaction volumes in the past quarter than in the previous 12 months, particularly for the airframer’s G550. In the first quarter of the year, there were 16 sales of the long-range twinjet, nearly double the average of the past three years.

    Hagerty also noted a spike in off-market aircraft transactions, as six of those 16 G550 sales were not publicly advertised, or were unknown by market participants. The company believes this is an indication that many buyers are frustrated by the lack of good available inventory and sought out direct purchasing opportunities with unlisted aircraft.

    That could cause sellers on the market to adjust their pricing to move their aircraft. In its just-released Quarterly Market Update for Gulfstream aircraft, Hagerty expects prices to soften in the second quarter, based on the 14 price reductions seen in the first quarter on the G550, with an average decrease of 9 percent. It also anticipates a decrease in overall demand as global economic uncertainty lingers, led by fears of a 2020 recession, Brexit and U.S./China trade relations. As the impact of the so-called “Trump-Bump” from a year ago fades, Hagarty believes the industry is normalizing again.

    View Quarterly Market Update for Gulfstream Aircraft Q1 2019 here.

    This article was originally published in AINalerts on April 5, 2019.

  • Tracey Cheek posted an article
    Hagerty Jet Group's Quarterly Market Update for Gulfstream Aircraft Q1 2019 see more

    NAFA member, James Hagerty, President and CEO of Hagerty Jet Group shares the latest Quarterly Market Update for Gulfstream Aircraft for the first quarter of 2019.

    Mixed Market Signals in Pre-owned Gulfstream Markets

    In our previous Gulfstream Pre-owned Aircraft Market Report, Hagerty Jet Group predicted a choppy 2019 for business jet transactions. Entering into Q2, we continue to sense mixed market signals with steady transaction volume, but with increasing supply and notably decreasing ask prices.

    Transaction volume in Q1 2019 was stronger than we anticipated. Most pre-owned Gulfstream markets we track had stronger transaction volume in the past quarter than the prior 12 months. Most notably, there were 16 G550 sales in Q1 2019. That’s almost double the average of the previous three years.

    We tracked a spike in Off Market aircraft transactions that were not publicly advertised or unknown by market participants. For example, 6 of the 16 G550 transactions for the quarter were considered Off Market deals. We consider this as an indication that many buyers are frustrated by the lack of good inventory and sought direct opportunities with unlisted aircraft.

    Although average values remain flat across most makes and models, we expect prices to soften in Q2. In the G550 market alone, there were 14 price reductions in the quarter with an average decrease of -9%. This signals that Sellers are lowering price expectations to compete for buyers who are otherwise considering Off Market alternatives. Although the G550 market had a bump in values of nearly 10% last year, we believe demand will wane with fewer transactions in Q2 than Q1 and at lower prices.

    General sentiment from our peers in the broker community signals a decrease in overall demand as global economic uncertainty continues to loom. Fears of a 2020 recession, the unknown impact of Brexit and US/China trade relations are several common talking points in the industry. The Trump-Bump from a year ago seems to have faded and normalized. Now it’s back to business as usual.

    We are watching closely the new G500 market emerge. The first Pre-Owned G500 came to market in late March with a $49.99M ask price. This is a newly delivered airplane with ferry time only. The ask price is arguably slightly higher than a new plane with a 2020 delivery. We’re interested to see the premiums, if any, a buyer will pay to mark the first“pre-owned” G500 transaction. Please continue to subscribe to receive future editions of our quarterly market report.

    To read the full market update click here.

    This market update was originally published by Hagerty Jet Group on April 1, 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.