ai2 market report - asset insight · 2020-06-13 · ai2 market report business jet & turboprop...

14
AI 2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs. Transaction” Value Gap, and Marketability Favoring Sellers Prices Likely to Continue Increasing During Q1 2019 Welcome to the AI 2 Market Report from Asset Insight, LLC. This Quarterly Market Report analyzed values for every production year of every modern make/model Business Class aircraft, and our December 31, 2018 maintenance analytics covered 94 fixed-wing models and 1,591 aircraft listed for sale. Ask Prices increased for all groups during Q4 1 Month Last 3 Months Last 6 Months Since Dec 2017 Tracked Fleet Average -1.4% 4.5% -1.8% -2.0% Large Jets -2.0% 5.1% -5.0% 11.8% Medium Jets 0.1% 0.7% 1.6% -14.6% Small Jets -2.0% 0.3% 4.4% 0.7% Turboprops -1.1% 1.7% -1.8% -0.6% Ask versus final Transaction Value gap at narrowest point of past 3 years Spread between Ask Price and final Transaction Value narrowed for all four groups once again during 4Q – yet another “seller’s market” datapoint. Large Jets improved from 9.7% to 9.4%, Medium Jets from 11.6% to 10.9%, Small Jets from 6.0% to 5.5%, and Turboprops from 6.3% to 5.9%. Overall Demand down slightly, but Large Jet and Turboprop figure improved Overall Demand (based on Days on Market and percent of make/model fleet ‘for sale’) decreased from 2.82 to 2.72 during 4Q, on our scale of 1.00 (lowest) to 5.00 (highest). Large jet and Turboprop demand improved, but weakness in the Medium and Small jet sectors depressed our tracked fleet’s Overall Demand figure. For sale fleet retains its “Excellent” Asset Quality Rating Our tracked fleet’s Quality Rating remained within the “Excellent” range, with the figure improving slightly, complements of a reduction in the number of upcoming scheduled maintenance events, although what is coming due will be a bit more expensive to complete. Maintenance Exposure worsened (increased) for Large Jets but improved (decreased) for all other groups. Excellent Asset Quality improves Maintenance Exposure for most groups Our tracked fleet’s accrued/embedded cost of future scheduled maintenance (Maintenance Exposure) decreased (improved) during 4Q for Medium Jets, Small Jets and Turboprops by 0.6%, 6.1%, and 3.6%, respectively, but Large Jet Maintenance Exposure did not keep pace, increasing (worsening) 0.9% due to sales favoring higher quality assets. Exposure to Price Ratio (“ETP Ratio”) shows improved inventory marketability The fleet’s ETP Ratio (Maintenance Exposure divided by Ask Price) ended 4Q at 65.6%, improving from 3Q’s 67.1%. We consider any ETP Ratio over 40% to represent excessive Exposure in relation to Ask Price and a hindrance to aircraft marketability. “Days on Market” for the tracked fleet increased in 4Q, and aircraft whose ETP Ratio was 40% or higher were listed for sale more than 57% longer (on average) than aircraft whose Ratio was below 40% (246 vs. 386 Days on Market). John B. Spoor E: [email protected] Anthony Kioussis E: [email protected] Barbara A. Spoor, ASA E: [email protected] Francisco Picornell, ASA Candidate E: [email protected] Asset Insight, LLC 1424 W. Church Street Sandwich Airport Sandwich, IL 60548 Tel: (888) 814-8258 www.assetinsight.com To obtain an instant valuation for any aircraft, by specific Serial Number, using Asset Insight’s eValues TM system, please visit our website (www.assetinsight.com). To discuss Asset Insight’s services, or schedule a demonstration of Asset Insight’s services, please call us at (540) 905-4555.

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Page 1: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Higher Prices, Continued Narrowing of “Ask vs. Transaction” Value Gap, and Marketability Favoring Sellers

Prices Likely to Continue Increasing During Q1 2019

Welcome to the AI2 Market Report from Asset Insight, LLC. This Quarterly Market Report analyzed values for every production year of every modern make/model Business Class aircraft, and our December 31, 2018 maintenance analytics covered 94 fixed-wing models and 1,591 aircraft listed for sale.

➢ Ask Prices increased for all groups during Q4

1 Month Last 3

Months Last 6

Months Since Dec

2017

Tracked Fleet Average -1.4% 4.5% -1.8% -2.0%

Large Jets -2.0% 5.1% -5.0% 11.8%

Medium Jets 0.1% 0.7% 1.6% -14.6%

Small Jets -2.0% 0.3% 4.4% 0.7%

Turboprops -1.1% 1.7% -1.8% -0.6%

➢ Ask versus final Transaction Value gap at narrowest point of past 3 years Spread between Ask Price and final Transaction Value narrowed for all four groups once again during 4Q – yet another “seller’s market” datapoint. Large Jets improved from 9.7% to 9.4%, Medium Jets from 11.6% to 10.9%, Small Jets from 6.0% to 5.5%, and Turboprops from 6.3% to 5.9%.

➢ Overall Demand down slightly, but Large Jet and Turboprop figure improved Overall Demand (based on Days on Market and percent of make/model fleet ‘for sale’) decreased from 2.82 to 2.72 during 4Q, on our scale of 1.00 (lowest) to 5.00 (highest). Large jet and Turboprop demand improved, but weakness in the Medium and Small jet sectors depressed our tracked fleet’s Overall Demand figure.

➢ For sale fleet retains its “Excellent” Asset Quality Rating Our tracked fleet’s Quality Rating remained within the “Excellent” range, with the figure improving slightly, complements of a reduction in the number of upcoming scheduled maintenance events, although what is coming due will be a bit more expensive to complete. Maintenance Exposure worsened (increased) for Large Jets but improved (decreased) for all other groups.

➢ Excellent Asset Quality improves Maintenance Exposure for most groups Our tracked fleet’s accrued/embedded cost of future scheduled maintenance (Maintenance Exposure) decreased (improved) during 4Q for Medium Jets, Small Jets and Turboprops by 0.6%, 6.1%, and 3.6%, respectively, but Large Jet Maintenance Exposure did not keep pace, increasing (worsening) 0.9% due to sales favoring higher quality assets.

➢ Exposure to Price Ratio (“ETP Ratio”) shows improved inventory marketability The fleet’s ETP Ratio (Maintenance Exposure divided by Ask Price) ended 4Q at 65.6%, improving from 3Q’s 67.1%. We consider any ETP Ratio over 40% to represent excessive Exposure in relation to Ask Price and a hindrance to aircraft marketability. “Days on Market” for the tracked fleet increased in 4Q, and aircraft whose ETP Ratio was 40% or higher were listed for sale more than 57% longer (on average) than aircraft whose Ratio was below 40% (246 vs. 386 Days on Market).

John B. Spoor E: [email protected]

Anthony Kioussis E: [email protected]

Barbara A. Spoor, ASA E: [email protected]

Francisco Picornell, ASA Candidate E: [email protected]

Asset Insight, LLC 1424 W. Church Street

Sandwich Airport Sandwich, IL 60548 Tel: (888) 814-8258

www.assetinsight.com

To obtain an instant valuation for

any aircraft, by specific Serial

Number, using Asset Insight’s

eValuesTM system, please visit our

website (www.assetinsight.com).

To discuss Asset Insight’s services,

or schedule a demonstration of

Asset Insight’s services, please call

us at (540) 905-4555.

Page 2: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 2 of 14

Large Jets Future Value Trend (“eTrendTM”) and Current Market Demand

➢ eTrendTM information is designed to provide a general view of how aircraft prices are currently trending, and the effect this is likely to have on average transaction values 90 days hence.

➢ Current Market Demand for each Make/Model represents an objective view based on that Make/Model’s Average Days on Market and the percentage of that Model’s fleet listed for sale. During 4Q18, demand increased from 2.98 to 3.10, on our scale ranging from 1.00 (weak demand) to 5.00 (strong demand).

Current Current

Market Market

Demand* Demand*

Dassault

Challenger 600 Falcon 2000EX

Challenger 601-1A Falcon 2000EX EASy

Challenger 601-3A Falcon 2000LX

Challenger 601-3R Falcon 2000LXS

Challenger 604 Falcon 2000S

Challenger 605

Challenger 650 Legacy 600

Global 5000 Legacy 650

Global 6000

Global Express Gulfstream G300

Global Express XRS Gulfstream G350

Dassault Gulfstream G400

Falcon 7X Gulfstream G450

Falcon 900A Gulfstream G500

Falcon 900B Gulfstream G550

Falcon 900C Gulfstream G650

Falcon 900DX Gulfstream G650 ER

Falcon 900EX Gulfstream G-III

Falcon 900EX EASy Gulfstream G-IV

Falcon 900LX Gulfstream G-IV SP

Falcon 2000 Gulfstream G-V

Falcon 2000DX

$143,889 $38,571

($109,543)

Aircraft Make/Model Aircraft Make/Model

$672,452 $863,333

($344,113) ($951,918)

($98,603) ($6,786)

($122,500) $300,333

($506,933) $1,270,833

($335,000)

($415,238)

($403,738) ($4,000)

($85,768) ($27,013)

($120,109) ($295,491)

$878,333

($112,710)

($16,277) ($10,707)

$33,671 $952,500

($24,879) ($240,805)

$351,250 ($35,484)

($87,519) ($922,902)

Embraer

($411,434) $1,566,667

$2,775,000 ($1,394,757)

($587,299)

$2,140,500 ($443,488)

Gulfstream

Bombardier

eTrendTM eTrendTM

90-day Value Trend 90-day Value Trend

Average Gain/(Loss) Average Gain/(Loss)

Excludes new production aircraft entering service during 2017 & 2018

➢ Since December 2017: ➢ Ask Price increased 11.8%. ➢ Ask Price and final Transaction Value differential

narrowed from 12.3% to 9.4%.

➢ Demand increased during 4Q to 3.10, from 2.98 during 3Q, on our scale of 1.0 (low) to 5.0 (high).

➢ The Quarter over Quarter, 90-Day Value eTrendTM forecasts average prices will increase 146% during 1Q19 across our tracked fleet, compared to 4Q18 change, due to limited inventory of younger, lower-time assets. The Seller’s position is forecast to improve.

* Average Variance based on a Sample Set comparing the Ask

Price against the Transaction Price

Used Aircraft Ask Price vs. Transaction Price Spread

Market Overview Large Jets

Page 3: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 3 of 14

Large Jets

Worst Average Best Worst Best

$3.49 $3.38 $3.20 $3.76 $2.58

- As the ETP Ratio decreases, the aircraft's "value" increases

(in relation to its Ask Price)

Highest Average Lowest Highest Lowest - Aircraft whose ETP Ratio is above 40% are burdened,

$12.58 $11.50 $10.64 $16.61 $10.60 on average, with excessive Maintenance ExposureSource: Jetnet (www.jetnet.com)

12-month Figures Historical Figures

Maintenance Exposure - Reference Points

Maintenance Exposure*($ Mil)

Maintenance Exposure to Ask Price Ratio ("ETP Ratio")

Asset Quality RatingScale -2.500 to 10.000

Average Ask Price($ Mil)

12-month Figures

$ Millions

Historical Figures

Asset Quality Rating Key

$ Millions

Importance of the ETP Ratio

$ Millions $ Millions

* The accrued cost of future scheduled maintenance

Ask Price - Reference Points

5.485

5.200

5.250

5.300

5.350

5.400

5.450

5.500

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$3.446

$3.15

$3.25

$3.35

$3.45

$3.55

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

58.8%

30%

40%

50%

60%

70%Ja

n-1

8

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$11.94

$10

$11

$12

$13

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8Outstanding Excellent

Very

Good Good Average

Below

Average

5.500

or

Greater

5.250

to

5.499

5.000

to

5.249

4.750

to

4.999

4.500

to

4.749

Less

than

4.500

Dassault

Boeing BBJ 5.7% 562 F2000LX 10.3% 179 Embraer Legacy 600 23.2% 349

F900EX EASy 17.3% 316 Gulfstream

CL-605 13.7% 136 Falcon2000EX Easy 17.4% 214 G650 3.8% 168

Global XRS 26.5% 253 F900EX 29.5% 305 G550 20.9% 161

Global 5000 28.1% 221 Falcon 2000 60.6% 172 G 450 21.4% 245

CL-604 45.9% 259 GV 42.2% 271

Global Express 79.8% 312 GIV-SP 66.4% 334

CL-601-3R 135.0% 252 GIV 145.1% 223

CL-601-3A 180.6% 304

CL-601-1A 241.1% 499

Maintenance Exposure to Ask Price Ratio ("ETP Ratio") & Days on Market

Model ETP Ratio

Days on

Market Model ETP Ratio

Days on

Market Model ETP Ratio

Days on

Market

Ask Price and Days on Market source: Jetnet (www.jetnet.com)

Bombardier

Boeing Embraer

Page 4: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 4 of 14

Medium Jets

Future Value Trend (“eTrendTM”) and Current Market Demand ➢ eTrendTM information is designed to provide a general view of how aircraft prices are currently trending, and

the effect this is likely to have on average transaction values 90 days hence. ➢ Current Market Demand for each Make/Model represents an objective view based on that Make/Model’s

Average Days on Market and the percentage of that Model’s fleet listed for sale. During 4Q18, demand decreased from 2.95 to 2.41, on our scale ranging from 1.00 (weak demand) to 5.00 (strong demand).

Current Current

Market Market

Demand* Demand*

Challenger 300 Falcon 50

Challenger 350 Falcon 50EX

Learjet 40

Learjet 40 XR Legacy 500

Learjet 45 Gulfstream

Learjet 45 XR Gulfstream G100

Learjet 55C Gulfstream G150

Learjet 60 Gulfstream G200

Learjet 60SE Gulfstream G280

Learjet 60 XR Hawker

Learjet 70 Hawker 700

Learjet 75 Hawker 750

Cessna Hawker 800A

Citation Excel Hawker 800 XP

Citation Latitude Hawker 800 XPi

Citation Sovereign Hawker 850 XP

Citation Sovereign + Hawker 900 XP

Citation X Hawker 1000

Citation X + Hawker 4000

Citation XLS

Citation XLS+ Nextant 400XTi ($89,117) ($291,259)

Aircraft Make/Model Aircraft Make/Model

($36,040) ($19,158)

($617,187) ($230,482)

$186,000 Nextant Aerospace

($34,571) ($93,341)

$57,000 ($119,803)

($179,726) ($74,197)

($70,025) ($90,872)

$79,169

$305,455 ($30,338)

$57,046 ($733,775)

$38,333

$1,340 ($7,003)

$321,696 ($47,943)

$26,785 ($72,162)

($17,159) $1,166,964

($164,682) Embraer

($345,451) ($185,140)

($39,294)

Bombardier Dassault

$736,583 $600

($305,629) $427,881

eTrendTM eTrendTM

90-day Value Trend 90-day Value Trend

Average Gain/(Loss) Average Gain/(Loss)

Excludes new production aircraft entering service during 2017 & 2018

Used Aircraft Ask Price vs. Transaction Price Spread

Market Overview Medium Jets

➢ Since December 2017: ➢ Ask Price decreased 14.6%. ➢ Ask Price and final Transaction Value

differential narrowed from 14.9% to 10.9%.

➢ Demand decreased during 4Q to 2.41, from 2.95 during 3Q, on our scale of 1.0 (low) to 5.0 (high).

➢ The Quarter over Quarter, 90-Day Value eTrendTM forecasts average prices will increase 89% during 1Q19 across our tracked fleet, compared to 4Q18 change.

* Average Variance based on a Sample Set comparing the Ask

Price against the Transaction Price

Page 5: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 5 of 14

Medium Jets

Worst Average Best Worst Best

$1.29 $1.22 $1.13 $1.70 $0.85

- As the ETP Ratio decreases, the aircraft's "value" increases

(in relation to its Ask Price)

Highest Average Lowest Highest Lowest - Aircraft whose ETP Ratio is above 40% are burdened,

$2.90 $2.57 $2.37 $4.80 $2.37 on average, with excessive Maintenance ExposureSource: Jetnet (www.jetnet.com)

* The accrued cost of future scheduled maintenance

Ask Price - Reference Points Importance of the ETP Ratio

12-month Figures Historical Figures

Average Ask Price($ Mil)

Maintenance Exposure to Ask Price Ratio ("ETP Ratio")

12-month Figures Historical Figures$ Millions $ Millions

$ Millions $ Millions

Asset Quality Rating Key

Asset Quality RatingScale -2.500 to 10.000

Maintenance Exposure*($ Mil)

Maintenance Exposure - Reference Points

5.232

5.000

5.100

5.200

5.300

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$1.233

$1.10

$1.15

$1.20

$1.25

$1.30

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

77.8%

30%

40%

50%

60%

70%

80%

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$2.44

$2.30

$2.50

$2.70

$2.90

$3.10

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8Outstanding Excellent

Very

Good Good Average

Below

Average

5.500

or

Greater

5.250

to

5.499

5.000

to

5.249

4.750

to

4.999

4.500

to

4.749

Less

than

4.500

Cessna Hawker

Learjet 45XR 24.6% 154 Citation Excel 560XL 33.9% 204 Hawker 900XP 23.7% 313

Challenger 300 25.6% 183 Citation VI 108.6% 368 Hawker 850XP 29.8% 294

Learjet 60XR 35.2% 301 Dassault Hawker 400XP 45.6% 542

Learjet 45 w/APU 60.0% 261 Falcon 50EX 28.8% 344 Hawker Beechjet 400A 49.4% 418

Learjet 60 108.7% 451 Falcon 50 95.3% 296 Hawker 800XP 69.0% 273

Learjet 55 214.8% 550 Gulfstream Hawker 1000A 91.3% 1030

Cessna G-150 20.8% 224 Hawker Beechjet 400 141.4% 395

Citation Sovereign 680 17.0% 352 G-200 46.6% 144 Hawker 800A 153.3% 465

Citation XLS 29.0% 271 G-100 137.2% 98

Maintenance Exposure to Ask Price Ratio ("ETP Ratio") & Days on MarketDays on

MarketModel ETP Ratio Model ETP Ratio

Days on

Market Model ETP Ratio

Days on

Market

Ask Price and Days on Market source: Jetnet (www.jetnet.com)

Bombardier

Page 6: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 6 of 14

Small Jets

Future Value Trend (“eTrendTM”) and Current Market Demand ➢ eTrendTM information is designed to provide a general view of how aircraft prices are currently trending, and

the effect this is likely to have on average transaction values 90 days hence. ➢ Current Market Demand for each Make/Model represents an objective view based on that Make/Model’s

Average Days on Market and the percentage of that Model’s fleet listed for sale. During 4Q18, demand decreased from 2.90 to 2.60, on our scale ranging from 1.00 (weak demand) to 5.00 (strong demand).

Current Current

Market Market

Demand* Demand*

Cessna

Beech Premier I Citation Encore

Beech Premier IA Citation Encore+

Citation M2

Learjet 31 Citation Mustang

Learjet 35 Citation Ultra

Learjet 35A Citation I

Learjet 36 Citation II

Learjet 36A Citation III

Citation V

Citation Bravo Citation VI

Citation CJ1 Citation VII

Citation CJ1+ Eclipse

Citation CJ2 Eclipse 500

Citation CJ2+ Embraer

Citation CJ3 Phenom 100

Citation CJ3+ Phenom 100E

Citation CJ4 Phenom 300

($90,961) ($117,357)

($59,730) $232,500

Aircraft Make/Model Aircraft Make/Model

($64,854)

$60,000 ($20,344)

($52,458)

($77,036) $77,143

Cessna $25,986

($15,840) ($12,500)

($192,592) ($309,961)

$102,909 ($26,415)

($19,837) ($687)

($43,848) ($15,102)

($44,323)

$195,004 ($44,313)

($3,456) $101,557

eTrendTM eTrendTM

90-day Value Trend 90-day Value Trend

Average Gain/(Loss) Average Gain/(Loss)

Beechcraft

$12,000 ($79,131)

($44,282) ($40,833)

Bombardier

Excludes new production aircraft entering service during 2017 & 2018

Used Aircraft Ask Price vs. Transaction Price Spread

Market Overview Small Jets

➢ Since December 2017: ➢ Ask Price has increased 0.7%. ➢ Ask Price and final Transaction Value

differential narrowed from 7.7% to 5.5%.

➢ Demand decreased during 4Q to 2.60, from 2.90 during 3Q, on our scale of 1.0 (low) to 5.0 (high).

➢ The Quarter over Quarter, 90-Day Value eTrendTM forecasts average prices will increase 32% during 1Q19 across our tracked fleet, compared to 4Q18 change.

* Average Variance based on a Sample Set comparing the Ask

Price against the Transaction Price

Page 7: AI2 Market Report - Asset Insight · 2020-06-13 · AI2 Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019 Higher Prices, Continued Narrowing of “Ask vs

Asset Insight, LLC (888) 814-8258 [email protected]

Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019

Page 7 of 14

Small Jets

Worst Average Best Worst Best

$0.83 $0.76 $0.69 $1.07 $0.57

Highest Average Lowest Highest Lowest

$1.91 $1.75 $1.67 $2.21 $1.67

Asset Quality Rating Key

Average Ask Price($ Mil)

$ Millions $ Millions

Ask Price - Reference Points Importance of the ETP Ratio

Source: Jetnet (www.jetnet.com)

Asset Quality RatingScale -2.500 to 10.000

Maintenance Exposure*($ Mil)

Maintenance Exposure - Reference Points

12-month Figures Historical Figures$ Millions $ Millions

Maintenance Exposure to Ask Price Ratio ("ETP Ratio")

- As the ETP Ratio decreases, the aircraft's "value" increases

(in relation to its Ask Price)

- Aircraft whose ETP Ratio is above 40% are burdened,

on average, with excessive Maintenance Exposure

* The accrued cost of future scheduled maintenance

12-month Figures Historical Figures

5.358

5.100

5.200

5.300

5.400

5.500

5.600

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$0.744

$0.65

$0.70

$0.75

$0.80

$0.85

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

66.4%

30%

40%

50%

60%

70%

80%

90%

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$1.79

$1.6

$1.7

$1.8

$1.9

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8Outstanding Excellent

Very

Good Good Average

Below

Average

5.500

or

Greater

5.250

to

5.499

5.000

to

5.249

4.750

to

4.999

4.500

to

4.749

Less

than

4.500

Premier 1A 40.6% 393 Citation Encore + 14.4% 143 Citation V Ultra 62.9% 381

Premier 1 77.6% 277 Citation CJ3 25.0% 199 Citation V 560 73.6% 378

Citation CJ2+ 525A 25.2% 186 Citation ISP 92.0% 646

Learjet 35A 149.8% 447 Citation Mustang 510 28.0% 264 Citation II 113.4% 540

Learjet 31 154.3% 278 Citation Encore 29.6% 88 Embraer

Citation CJ2 29.7% 158 Phenom 300 9.9% 207

Citation CJ4 525C 11.0% 112 Citation CJ1+ 36.6% 189 Phenom 100 27.2% 283

Citation Bravo 41.8% 410

Maintenance Exposure to Ask Price Ratio ("ETP Ratio") & Days on MarketDays on

MarketModel ETP Ratio

Days on

Market Model ETP Ratio Model ETP Ratio

Days on

Market

Bombardier

Cessna

Ask Price and Days on Market source: Jetnet (www.jetnet.com)

Beechcraft Cessna Cessna

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Turboprops

Future Value Trend (“eTrendTM”) and Current Market Demand ➢ eTrendTM information is designed to provide a general view of how aircraft prices are currently trending, and

the effect this is likely to have on average transaction values 90 days hence. ➢ Current Market Demand for each Make/Model represents an objective view based on that Make/Model’s

Average Days on Market and the percentage of that Model’s fleet listed for sale. During 3Q18, demand increased from 3.00 to 3.35, on our scale ranging from 1.00 (weak demand) to 5.00 (strong demand).

Current

Market

Demand*

King Air 300

King Air 350

King Air 350i

King Air B200

King Air C90

Caravan Grand 208B

Caravan 208

TBM 850

TBM 700A

TBM 930

Avanti P180

Avanti P180-II

Pilatus PC 12/41

Pilatus PC 12/47

Pilatus PC 12/47 NG

Meridian PA 46TP

$189,514

$51,915

Aircraft Make/Model

Pilatus Aircraft

$21,667

($28,377)

($67,325)

Piper

($420,215)

($16,070)

($73,840)

Piaggio Aero

($16,818)

$17,329

Cessna

($21,390)

($24,548)

Daher-Socata

eTrendTM

90-day Value Trend

Average Gain/(Loss)

Beechcraft

($9,870)

$191,736

$209,126

($21,709)

Excludes new production aircraft entering service during 2017 & 2018

Used Aircraft Ask Price vs. Transaction Price Spread

Market Overview Turboprops

➢ Since December 2017: ➢ Ask Price has increased 0.6%. ➢ Ask Price and final Transaction Value differential

narrowed from 9.0% to 5.9%.

➢ Demand increased during 4Q to 3.35, from 3.00 during 3Q, on our scale of 1.0 (low) to 5.0 (high).

➢ The Quarter over Quarter, 90-Day Value eTrendTM forecasts average prices will increase 72% during 1Q19 across our tracked fleet, compared to 4Q18 change.

* Average Variance based on a Sample Set comparing the Ask Price

against the Transaction Price

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Turboprops

Worst Average Best Worst Best

$0.64 $0.59 $0.54 $0.70 $0.44

Highest Average Lowest Highest Lowest

$1.53 $1.50 $1.48 $1.97 $1.46 Source: Jetnet (www.jetnet.com)

Maintenance Exposure*($ Mil)

Asset Quality RatingScale -2.500 to 10.000

Asset Quality Rating Key Maintenance Exposure - Reference Points

12-month Figures Historical Figures$ Millions $ Millions

* The accrued cost of future scheduled maintenance

Ask Price - Reference Points Importance of the ETP Ratio

12-month Figures

- Aircraft whose ETP Ratio is above 40% are burdened,

on average, with excessive Maintenance Exposure

Historical Figures - As the ETP Ratio decreases, the aircraft's "value" increases

Maintenance Exposure to Ask Price Ratio ("ETP Ratio")

Average Ask Price($ Mil)

$ Millions $ Millions (in relation to its Ask Price)

5.111

4.600

4.800

5.000

5.200

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$0.591

$0.50

$0.55

$0.60

$0.65

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

51.1%

30%

40%

50%

60%

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

$1.50

$1.45

$1.48

$1.50

$1.53

$1.55

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Outstanding Excellent

Very

Good Good Average

Below

Average

5.500

or

Greater

5.250

to

5.499

5.000

to

5.249

4.750

to

4.999

4.500

to

4.749

Less

than

4.500

Piaggio Pilatus

KingAir 350 - Pre-2001 31.3% 312 Piaggio P-180 II 50.7% 381 Pilatus PC-12 17.1% 373

KingAir B-200 - Pre-2001 46.0% 285 Piaggio P-180 77.2% 588 Piper

KingAir 300 47.0% 275 Piper Meridian 20.2% 332

KingAir C90 107.4% 716

Maintenance Exposure to Ask Price Ratio ("ETP Ratio") & Days on MarketDays on

MarketModel ETP Ratio

Days on

Market Model ETP Ratio

Days on

Market Model ETP Ratio

Beechcraft

Ask Price and Days on Market source: Jetnet (www.jetnet.com)

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Aircraft analyzed – maintenance analytics Following is a list of the aircraft models researched to produce this Market Report’s maintenance analytics:

Large Jets Medium Jets Small Jets Turboprops

Beechcraft-Hawker: • Beechjet 400 • Premier 1 • King Air C90

• Beechjet 400A • Premier 1A • King Air B-200

• Hawker 400XP • King Air 300

• Hawker 800A/B; 800XP • King Air 350

• Hawker 850XP • B-1900C

• Hawker 900XP

• Hawker 1000A

Boeing: • BBJ

Bombardier: • CL-601-1A; 3A; -3R; -SE • Challenger 300 • Learjet 31

• CL-604 • Learjet 45; 45 w/APU • Learjet 35A

• CL-605 • Learjet 45XR

• Global 5000 • Learjet 55-55A

• Global Express • Learjet 55C

• Global XRS • Learjet 60

• Learjet 60XR

Cessna: • Citation Excel • Citation CJ1+

• Citation Sovereign • Citation CJ2

• Citation VI • Citation CJ3

• Citation X (MSG3) • Citation CJ4

• Citation XLS; XLS (MSG3) • Citation Bravo

• Citation XLS+ (MSG3) • Citation Encore; Encore +

• Citation I-SP

• Citation II

• Citation Mustang

• Citation V; Citation V Ultra

Dassault Falcon Jet: • F2000 • Falcon 20-5

• F2000EX; F2000EX Easy • Falcon 50

• F2000DX; F2000LX • Falcon 50EX

• F900; F900B; F900C

• F900EX; F900EX Easy

• F900DX; F900LX

Eclipse:

• Eclipse 500

Embraer:

• Legacy 600 • Phenom 100

• Phenom 300

Gulfstream: • G-IV • G-100

• GIV-SP & GIV-SP (MSG3) • G-150

• GV • G-200

• G350

• G450

• G550

Nextant Aerospace:

• Legacy 600 • Phenom 100

Piaggio: • P-180; P180 II

Pilatus: • PC-12

Piper: • Malibu Meridian

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Analysis Methodology – Maintenance Analytics Asset Insight, LLC has developed a proprietary Asset Grading System ProcessTM (AGSP) that objectively evaluates

assets relative to their Optimal Maintenance Condition and provides an easy- to-understand, uniform, yet

robust, set of data that can be acted upon, on a timely basis, to protect and/or enhance an asset’s financial

performance.

The AGSP is based on patented algorithms analyzing current age, the hours and cycles on an aircraft’s Major

Sectors – airframe, engine(s), propeller(s), APU, paint, and interior – as well as the cost to repair or replace parts

with no defined life. The AGSP derives an index (the “Asset Insight Index”) providing an objective measure of an

aircraft’s current maintenance status and its related Financial Exposure going forward – that is, the financial

liability accrued with respect to future scheduled maintenance events.

The Asset Insight Index is comprised of three factors that evaluate two aspects of an aircraft’s maintenance, its

Asset Quality Rating and its Maintenance Exposure Value. The Asset Quality Rating is computed by averaging the

aircraft’s Maintenance Rating and Financial Rating, while the Maintenance Exposure Value measures an aircraft’s

accrued / consumed financial liability with respect to future scheduled maintenance events, presenting such

information in financial terms.

Asset Quality Rating and the Factors Comprising the "Asset Insight Index"

Asset Quality Rating The Asset Quality Rating allows any aircraft’s maintenance status to be directly compared to any other aircraft’s maintenance status, by virtue of the Asset Insight standardized scale. The Asset Quality Rating is computed by averaging the aircraft’s Maintenance Rating (“ATC Score”) and Financial Rating (“ATFC Score”) – explained in the following two sections – and is based on a scale ranging from -2.500 to 10.000, the latter reflecting a newly produced aircraft (see scale below).

Maintenance Rating – Asset Technical Condition Score (“ATC Score”) The “Asset Technical Condition Score” (“ATC Score”) utilizes the Asset Grading System ProcessTM developed by

Asset Insight, Inc. to objectively evaluate and grade an aircraft's maintenance status, on a standardized scale,

relative to its Optimal Maintenance Condition (achieved on the day it came off the production line), utilizing the

aircraft's (standard/typical) Scheduled Maintenance Program. The ATC Score is based on a scale ranging from -

5.000 to 10.000, the latter reflecting a newly produced aircraft (see scale below).

Financial Rating – Asset Technical Financial Condition Score (“ATFC Score”) The “Asset Technical Financial Condition Score” (“ATFC Score”) evaluates and grades the Aircraft's financial rating

relative to its Optimal Maintenance Condition based on the Aircraft's ATC Score (see Maintenance Rating above).

The ATFC Score is based on a scale from 0.000 to 10.000, the latter reflecting a newly produced aircraft (see scale

below).

-2.500 – 2.000 3.000 4.000 – 6.000 7.000 8.000 – 10.000

Poor Asset Quality

Below average asset quality due to upcoming scheduled

maintenance

Most aircraft will Score within this range, representing good

asset quality

Very good asset quality (usually associated with

recent production aircraft)

Exceptional asset quality (typical of new, or nearly new, production aircraft)

-5.000 – 2.000 3.000 4.000 – 6.000 7.000 8.000 – 10.000

Poor Asset Quality

Below average asset quality due to upcoming, heavy, scheduled maintenance

Most aircraft will Score within this range, representing good

asset quality

Very good asset quality (usually associated with

recent production aircraft)

Exceptional asset quality

(typical of new, or nearly new, production aircraft)

0.000 3.000 4.000 – 6.000 7.000 8.000 – 10.000

All scheduled maintenance events due

Aircraft with upcoming, high cost, scheduled maintenance events

Most aircraft will Score within this maintenance status cost

range

Aircraft facing relatively low-cost maintenance

events

New or recently manufactured

aircraft)

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To score each aircraft make/model, the average cost for completing each maintenance event comprising the ATC

Maintenance Program is determined. Having compiled the aircraft's maintenance history, the time (calendar, flight

hours or cycles) accumulated toward each individual scheduled/anticipated maintenance event is used to

determine the aircraft's ATFC Score.

The Financial Rating (ATFC Score) differs from the Maintenance Rating (ATC Score). While the ATC Score evaluates

and grades an aircraft's maintenance status relative to its Optimal Maintenance Condition, the ATFC Score grades

an aircraft’s financial condition relative to its Optimal Maintenance Condition, meaning the ATFC Score is weighted

by the estimated cost to complete each maintenance event. Accordingly, the Maintenance Rating is likely to differ

from the Financial Rating.

For example, if an aircraft had only two maintenance components, and if one component was three-quarters of

the way toward its overhaul while the second was one-quarter of the way toward its overhaul, their combined

ATC Score would be 5.000, based on the following calculation: (75% + 25%) / 2 X Perfect Score (10.000) = 5.000.

However, if the first of these components has an overhaul cost of $1,000, while the second has an overhaul cost of $10,000, their combined ATFC Score would be 2.955 (see below).

Remaining Useful Life Overhaul Cost Remaining Financial Value

Component #1 75% $1,000 $750

Component #2 25% $10,000 $2,500

$11,000 $3,250

ATFC Score Calculation Methodology

Aircraft’s Financial Ratio ($3,250 / $11,000) X Perfect Score (10.000) = 2.955

Maintenance Exposure – Asset Technical Financial Exposure Value (“ATFE Value”) The “Asset Technical Financial Exposure Value” (“ATFE Value”) measures the aircraft’s financial exposure based on

its maintenance condition – the liability accrued / consumed with respect to future scheduled maintenance events

– and presents this information in financial terms, as follows:

To derive an aircraft's ATFE Value, the estimated cost for completing each event comprising the ATC Maintenance

Program has been established. Having compiled an aircraft's maintenance history, the time (flight hours,

landings/cycles, and/or calendar period) accumulated toward each individual scheduled/anticipated maintenance

event is used to compute the dollar liability accrued toward that event, with the ATFE Value representing the total

accrued liability toward future maintenance events.

Used Aircraft Ask Price vs. Transactional Price Spread

Detailed analytics are used to determine the ask price of an aircraft and its bid/ask spreads, including, but not

limited to, items such as market supply, demand, saturation, aircraft age, competition, utility, damage, economics,

financing, trade, exclusivity, compulsion to sell, buyer / seller market strength, etc.

Max $ Exposure for Make/Model $0 Maintenance Exposure

Maintenance financial exposure equal to the cost of one cycle for each Scheduled Maintenance event

Typical aircraft maintenance cost

exposure range

Newly

manufactured aircraft

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Future Value Trend (“eTrendTM”) and Current Market Demand eTrendTM information is displayed by Make/Model and is intended to provide a general view of how aircraft prices

are currently trending and the effect this is likely to have on average transaction values 90 days hence. Current

Market Demand for each Make/Model is an objective view based on that Make/Model’s Average Days on Market

and the percentage of that Model’s fleet listed for sale. All figures EXCLUDE new production aircraft entering

service during 2016 and 2017.

Ask Price vs. Asset Exposure to Ask Price Ratio (“ETP Ratio”) Graph The graph displays the relationship between each aircraft group’s “Asset Exposure to Ask Price” Ratio (the ATFE

Value divided by the Average Ask Price) and the Average Ask Price. In general, as aircraft Ask Prices rise, the Ratio

should decrease – all other factors being equal. However, the Ratio’s relationship to Ask Price is not an absolute

inverse correlation. Aircraft with a greater or lesser maintenance-related Financial Exposure, but with the same

Ask Price, may replace aircraft listed “for sale” during any given month. Accordingly, it is possible for both the

Ratio and the Ask Price lines to move in the same direction.

Asset Exposure to Ask Price Ratio (“ETP Ratio”) The Asset Exposure to Ask Price Ratio (“ETP Ratio”) is calculated by dividing the aircraft’s ATFE Value (the financial

liability accrued with respect to future scheduled maintenance events) by its Ask Price. Accordingly, as the ETP

Ratio decreases, the aircraft’s “value” increases (in relation to its Ask Price). Aircraft whose ETP Ratio is 40% or

greater are believed to have accrued an excessive level of maintenance Asset Exposure (ATFE Value) in relation to

their Ask Price. ETP Ratios are only available in cases where a statistically significant sample of aircraft Ask Price

and maintenance status can be derived for a specific Make / Model.

General Information Asset Insight, LLC (www.assetinsight.com) provides asset evaluation and financial optimization services. The company’s “Asset Grading System Standard,” and related analyses, provides the ability to translate the asset’s technical condition into easy-to-understand, actionable financial information. Asset Insight is independent of any manufacturer, appraisal firm, financial services firm, or technical services facility, enabling it to provide an unbiased view of an asset’s condition with respect to its technical status and related financial exposure. The company is managed by business, technical and financial professionals with significant experience in aviation asset management.

The analytics in this document are not intended to represent a technical evaluation of any Aircraft. Further, the

reader, or any party using information contained in this Report, should recognize that this Report is limited in

scope, and that discrepant conditions may exist in any one or more analyzed aircraft that were not known by

Asset Insight, LLC.

The Asset Insight Index and its ATC Score, ATFC Score, and ATFE Value components are based upon the aircraft

maintenance condition information reviewed by Asset Insight, LLC as of a certain date. Running any analytics on

any aircraft utilizing a different date, revised maintenance data and/or utilization figures will likely generate

different results.

Asset Insight, LLC makes no representation concerning the value or condition of any aircraft. Additionally,

Asset Insight, LLC does not warrant the accuracy of the information obtained by Asset Insight, LLC that has

been used to produce this Report.

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Copyright Notice The information contained in this document may be copied for use in presentations, proposals, or other

business matters, provided that no money is exchanged and the cover sheet for any such use contains the

following notice in readable, bold type:

“The attached material is the proprietary information of Asset Insight, LLC”

Additionally, readers shall have the right to use the data contained in this document, provided that any such use

references Asset Insight, LLC, and that Asset Insight, LLC is identified as the source of the data and the Asset

Insight, LLC website www.assetinsight.com is displayed.

Asset Insight, LLC P.O. Box 27740, Las Vegas, NV 89126

Telephone: (888) 814-8258 | www.assetinsight.com

To obtain an instant valuation for any aircraft, by specific Serial Number, using Asset Insight’s eValuesTM system, please visit our website (www.assetinsight.com). To discuss Asset Insight’s services, or schedule a

demonstration of Asset Insight’s services, please call us at (540) 905-4555.