ai2 market report - asset insight · 2020-06-13 · ai2 market report business jet & turboprop...
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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.
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
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
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
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
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
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
Asset Insight, LLC (888) 814-8258 [email protected]
Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 8 of 14
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
Asset Insight, LLC (888) 814-8258 [email protected]
Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 9 of 14
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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Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 10 of 14
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
Asset Insight, LLC (888) 814-8258 [email protected]
Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 11 of 14
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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Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 12 of 14
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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Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 13 of 14
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.
Asset Insight, LLC (888) 814-8258 [email protected]
Asset Insight Quarterly Market Report Business Jet & Turboprop Aircraft – Volume 1, January 2019
Page 14 of 14
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.