MARKETLINE 2015 NEWSLETTER STOCK PRICES SOAR WHILE PRE-OWNED AIRCRAFT PRICES REMAIN IN GROUND EFFECT JET TURBOPROP MULTI SINGLE HELICOPTER

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Lionel Richards
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1 MRKETLINE MRKETLINE VOL 28 NO NEWSLETTER STOCK PRICES SOR WHILE PRE-OWNED IRCRFT PRICES REMIN IN GROUND EFFECT usiness aircraft pricing in the pre-owned market appears to be soaring in ground effect. The good news is that sales are occurring while on the cloudy side, values, at best, try to maintain a flat trending posture. Pre-owned aircraft pricing isn t keeping time with commerce. From the sea, the West Coast ports of entry look like long-term parking lots for sea freighters: Lots of stuff awaiting their turn for deporting goods from the backlog created by labor disputes. Then, try driving on any Interstate. The amount of commerce on the move, as observed with countless eighteen wheelers, is at an all-time high. nd, don t be caught waiting for a delayed flight during FedEx s rush hour in Memphis. You might be there awhile. While all of these indicators would indicate a more robust economy for pre-owned aircraft values, such is not the case. In a reflective analysis, it is possible to conclude that all of the observed chatter in commerce is nothing more than what it takes to keep the U.S. economy afloat and not so much gaining momentum. Granted, if such observed activity were solely the results of global export, values in the pre-owned market would likewise have a different story to tell. ut, it is what it is, even with historic low prices for crude oil. Jay Mesinger of Mesinger Jet Sales coined a phrase a couple of years ago concerning the recovery of pre-owned aircraft values. Flat is the new recovery, he said. Oh, if that were only true. t best one can hope for minimal depreciation in values. Looking to the right at the luebook-t-a-glance marque, a more or less stable environment of quarterly values trending is presented. In the Jet category, about a third of the reported fleet declined in value while two-thirds remained stable. The large cabin segment, such as the ombardier Global Express, Gulfstream G55 and the Dassault Falcon 9, were in the downward trend. There was some extended life in legacy jets, such as the Falcon 2, 2-5, Lear 31 and Hawker 4, which were reported with no pricing changes since last quarter. In the Turboprop category, the picture was a bit brighter. The Pilatus PC12 market is alive and competitive with limited inventories available in the pre-owned market coupled with strong market interest. eech King ir s, likewise for the most part, remained stable. Legacy turboprops such as the Cessna Conquest and Piper Continued on page 2 TLE OF CONTENTS LUEOOK-T--GLNCE JET INCRESED 8 DECRESED 396 STLE 646 TUROPROP INCRESED DECRESED 43 STLE 65 MULTI INCRESED 16 DECRESED 78 STLE 594 SINGLE Stock Prices Soar While... Current Market Strength Marketline Charts usiness Jet Perspectives on Value Into the lue round the Globe sk ircraft luebook What s New INCRESED 162 DECRESED 578 STLE 1952 HELICOPTER INCRESED 1 DECRESED 38 STLE 54 1 SPRING 215

MRKETLINE Cheyenne also remained unchanged in values when compared to the previous quarter. For the Twin and Single piston category, life is all about time and condition.

2 MRKETLINE Cheyenne also remained unchanged in values when compared to the previous quarter. For the Twin and Single piston category, life is all about time and condition. Well-equipped and maintained aircraft will sell well while the less fortunate fleet will remain on the market for extended times. In the Helicopter world, it was again a stable environment. There was interest in well-equipped legacy ships as well. The ell 212 and 412 experienced positive pricing adjustments in the luebook. Time and condition are significant factors when valuing rotor craft. Good component times, upgraded equipment and maintenance are key factors that will push an offering into the sold column. - Carl Janssens, S Chief ppraiser Penton viation merican Society of ppraisers TM Providing Value Worldwide CURRENT MRKET STRENGTH CMS represents an aircraft s current strength in the market. n + rating indicates the aircraft is enjoying a very firm market. Prices for an + aircraft are steadily rising, and holding times are very short or nonexistent. t the opposite end of the spectrum, a C- aircraft is one experiencing a very soft market. Its price is commonly discounted, and it often sets on the ramp in excess of eight months before selling. It is important to remember that Current Market Strength is not a forecast. It is valid only at Marketline s effective date of release. See chart below. MRKETLINE CHRTS ll of the listed aircraft have a composite score that is presented in the Used ircraft Market graph. Data points are represented in relationship to the respective new delivered historical price that is equal to 1%. The measure of change is reported in the actual percentage of value in relation to new. The delta between reporting periods can be concluded as the percentage of change. USED IRCRFT MRKET CURRENT MRKET STRENGTH (CMS) 27/28 Model CMS 27/28 Model CMS 27/28 Model CMS eech Premier 1 - ombardier Global XRS ombardier Challenger 64 ombardier Challenger 3 ombardier LearJet 6XR - ombardier Learjet 45XR - Cessna Citation X + Cessna Citation XLS + Cessna Citation CJ3 Cessna Citation CJ2 Dassault Falcon 9EX Easy Dassault Falcon 5EX - Dassault Falcon 2EX Embraer EM-135 Legacy - Embraer Phenom 1 Gulfstream G55 Gulfstream G45 Gulfstream G2 - Gulfstream G15 Hawker 8XP - Hawker 4XP C eech King ir 35 eech King ir 2 eech King ir C9GT Cessna 28 Grand Caravan Piaggio P18 Pilatus PC-12/47 Piper P46-5TP Meridian Socata TM85 eech 58 aron eech 36 onanza + Cessna T26H Stationair Cessna 182T Skylane + Cessna 172S Skyhawk + Cirrus SR22-G2 Cirrus SR2-G2 - Diamond D4-18XLS Star Diamond D2-C1 Eclipse - Mooney M2TN cclaim - Mooney M2R Ovation Piper P46-35P Mirage Piper P34-22T Seneca V - Piper P28R-21 rrow Piper P rcher III Evektor Sportstar (LS) - Flight Design CTLS (LS) gusta 19 Grand - ell 26 L-4 Eurocopter S35-3 Robinson R44 Raven II Sikorsky S-76C SPRING 215

3 MRKETLINE LRGE JET MEDIUM JET The Large Jet chart depicts the average price (in thousands) of the seven jets listed. Each model s year will precede the name of the aircraft. The Medium Jet chart depicts the average price (in thousands) of the six jets listed. Each model s year will precede the name of the aircraft. YER/MODEL %CHNGE YER/MODEL %CHNGE 26 ombardier Global Express ombardier Challenger Dassault Falcon 9 EX Easy Dassault Falcon 2EX Easy. 25 Gulfstream G Gulfstream G Embraer EM135 Legacy. 25 ombardier Challenger ombardier Lear 45XR Cessna Citation Sovereign Cessna Citation XLS. 26 Gulfstream G Hawker 8XP. 3 SPRING 215

4 MRKETLINE SMLL JET TUROPROP The Small Jet chart depicts the average price (in thousands) of the six jets listed. Each model s year will precede the name of the aircraft. The Turboprop chart depicts the average price (in thousands) of the seven turboprops listed. Each model s year will precede the name of the aircraft. YER/MODEL %CHNGE YER/MODEL %CHNGE 25 eech Premier Cessna Citation CJ Cessna 51 Mustang. 28 Embraer Phenom Embraer Phenom Hawker 4XP. 25 eech King ir eech King ir2. 25 eech King irc Cessna 28 Grand Caravan. 25 Piaggio vantip Pilatus PC12/ Socata TM7C2. 4 SPRING 215

5 MRKETLINE SINGLE/MULTI PISTON 5 HELICOPTER The Single/Multi-Piston chart depicts the average price (in thousands) of the 12 aircraft listed. Each model s year will precede the name of the aircraft. The Helicopter chart depicts the average price (in thousands) of the seven helicopters listed. Each model s year will precede the name of the aircraft. YER/MODEL %CHNGE YER/MODEL %CHNGE 25 eech 58 aron Diamond D42 Twin Star. 25 Piper P34-22T Seneca V. 25 eech 36 onanza Cessna/Columbia Cessna 182T Skylane Cessna T26H Turbo Stationair Cessna 172S Skyhawk SP. 25 Cirrus SR22-G Diamond D4-18 Star Piper P46-35P Mirage Piper P28R-21 rrow. 25 gusta 19E Power. 25 ell Eurocopter EC Eurocopter S35-3 Ecureuil. 24 Enstrom 28FX. 25 Robinson R44 Raven. 25 Sikorsky S-76C+. 5 SPRING 215

6 MRKETLINE LEGCY JET 2 LEGCY PISTON The Legacy Jet chart depicts the average price (in thousands) of the eight jets listed. Each model s year will precede the name of the aircraft. Legacy ircraft are those produced prior to the year 2. The Legacy Piston chart depicts the average price (in thousands) of the ten piston aircraft listed. Each model s year will precede the name of the aircraft. Legacy ircraft are those produced prior to the year 2. YER/MODEL %CHNGE YER/MODEL %CHNGE 1996 ombardier Challenger ombardier Lear Cessna Citation Ultra Dassault Falcon Dassault Falcon 5EX Gulfstream GV Gulfstream GIVSP Hawker8XP. 199 eech 36 onanza. 199 eech F33 onanza Cessna 21 Centurion II Cessna 172P Skyhawk Cessna 152 Commuter II. 199 Mooney 252 TSE. 199 Piper P Dakota. 199 Piper P-28R-21 rrow. 199 Piper P rcher II. 199 Piper P Warrior II. 6 SPRING 215

7 MRKETLINE LEGCY MULTI ENGINE PISTON NSDQ Consider these graphs as crosschecks. The general aviation and business aircraft market does not operate in a vacuum but is a part of the bigger picture The Legacy Multi Engine Piston chart depicts the average price (in thousands) of the six aircraft listed. Each model s year will precede the name of the aircraft. Legacy ircraft are those produced prior to the year 2. YER/MODEL %CHNGE 1986 eech 58P Pressurized aron. 199 eech 58 aron Cessna 421 Eagle III Cessna 31R II Piper P-31C Navajo. 199 Piper P-34-22T Seneca III. U.S. REL GDP Each data point represents the E s final figure or latest estimate of the quarter-to-quarter seasonally adjusted annual rates of change in real GDP based on chained 25 dollars. The study begins with the first quarter in SPRING 215

8 MRKETLINE CHNGE OF STTUS: SINGLE/MULTI The black line in the chart depicts change-of-status data for singles. The light gray line represents multi Single: 4392 Multi: CHNGE OF STTUS: JET/TURO/HELI The black line in the chart represents change-of-status information for jets. The light gray line depicts turboprops, while the dark gray line represents helicopters. Jet: 749 Turboprop: 33 Heli: CHNGE OF STTUS: TOTL MRKET Depicts change-of-status data for all aircraft included in the ircraft luebook. The numbers are from the F Registry. Gliders, homebuilts, airliners and other aircraft not found in the luebook are not included in this study. Total Market SPRING 215

9 MRKETLINE USINESS JET PERSPECTIVES ON VLUE MRKET TEMPERTURE y Dennis Rousseau President and Founder ircraftpost.com t the end of each year we tally the number of aircraft delivered into service (EIS) by manufacturer and model. We then calculate the number of pre-owned aircraft, as a percentage of the fleet that came on the market during the course of the year as well as the percentage of the pre-owned fleet that sold. The number of aircraft entering or on the market fluctuates almost daily as aircraft are withdrawn or sold. In turn, this information provides quantifiable data from which we can extract market conditions and direction. y gathering actual selling prices and ask prices (vs. Make Offer ) we can then dissect this further to reflect market depreciation. Today s concern is the total number of in-service aircraft of a specific make/model relative to the number of sales and their corresponding effect on residual values. good casein-point is the price point of the Challenger 64. Starting in 29, the average selling price went from $21 million in 28 to $12 million and available inventory spiked to 95 aircraft (26 percent of the fleet) by 212. It would be easy to surmise that the price decline was a direct result of the total number of in-service aircraft. The production run delivered 365 aircraft during a 1-year time frame, from 1996 to 26. Conversely, its nearest competitor, the Falcon 2, delivered 23 aircraft from 1994 to 26 and retained stronger residual values, as is reflected in today s selling price. Further, when we add to these production numbers the various iterations offered in the ensuing years (i.e., the CL65, 2 EX, ESy, LX, S), the EIS totals broach the 54+ aircraft for the 2 series and 65+ for the CL64/65. Total on Market Total In-Service Total Sold verage Sale Price verage Year Total on Market Total In-Service Total Sold verage Sale Price verage Year % % % % Challenger % % Falcon % % % % % % % % % % % % % % On the upper end of the spectrum, the Gulfstream G55 ended 214 with 475+ in-service aircraft since customer deliveries began in 23. This, in addition to the 192 GVs built from 1996 to 22, brings the total to 665+ aircraft. The number of pre-owned 55s on the market has increased from 34 aircraft in 213 to 55 in 214, with the total pre-owned sales increasing from only 19 in 213 to 22 in 214, as the total in-service aircraft fleet continues to grow. Total on Market Total In-Service Total Sold verage Sale Price verage Year % % % % % % During the last 5 years (21-214), an average of 35 percent of the aircraft that came on the market, sold to end-users. This has remained fairly consistent year to-year, fluctuating at most +/- 2%. However as the number of aircraft on the market, as a percentage of the fleet, increases, the sheer volume has the propensity to drive selling prices downward. s has been the case in the business jet industry for many years, near-term selling prices are typically tied to the most recent low-ball sale, which further exacerbates any hope of price stabilization. % of Fleet on Market % of Fleet Sold % Sold of ircraft On Market Gulfstream G 55 Market Summary % 4.9% 31.8% % 4.7% 34.6% % 5.7% 36.8% % % % 5.9% 38.2% 55.5% % % 5.9% 34.8% We are at a pivotal point in our industry from the perspective that we ve not seen such high production in the super midsize to long-range business jets. In the small jet category, the Lear 35 and Citation II, which produced 676 and 734 aircraft respectively, are good indicators of the effects of high production and lower residuals. During the next couple years I believe we can approach the market with an element of certainty in that new aircraft production will inevitably continue and pre-owned market pricing will try to find its way among an over-crowded market. 9 SPRING 215

10 MRKETLINE INTO THE LUE ircraft luebook t-a-glance eechcraft Premier 1 y Chris Reynolds, S ircraft luebook ircraft luebook t-a-glance has reviewed the current market status of the eechcraft Premier 1 business jet. Research for this study was obtained in part from ircraft luebook, ircraft luebook s Historical Value Reference, the F s registry website and various trade services. Demand Currently the Premier 1 fleet is approximately 153 aircraft. t press time, between 15 and 2 year models approximately percent of the Premier 1 fleet were for sale. Pricing Current offerings for the Premier 1 range from low-$1 million to high-$5 million with airframe time varying from several hundred hours to more than 3 hours depending on the year model. Over the last year, approximately 2-25 sales appear to have occurred. verage time on market was more than 2 days. Equipment, time, condition and engine maintenance programs can significantly affect time on market and marketable value. For the spring 215 ircraft luebook, a 26 eechcraft Premier 1 has a reported verage Retail Value of $1.6 million, which is an increase of $1, from the previous quarter s verage Retail Value. Residual Values 26 eechcraft Premier 1, whose market values have been tracked since the first quarter of 26, was reported new with an average equipped price of $6,57,24. ircraft luebook s Historical Value Reference has demonstrated the eechcraft Premier 1 market value (performance by quarter) for this 26 model in the graph and table. Find other historical values at ircraft luebook s web site, VERGE RETIL VLUES Year Quarter 1 $6,57,24 $5,6, $5,2, $4,8, $3,8, Quarter 2 $6,57,24 $5,4, $5,4, $4,, $3,7, Quarter 3 $6,57,24 $5,2, $5,4, $4,, $3,5, Quarter 4 $5,75, $5,2, $5,, $3,9, $3,3, 2 $3,1, $3,, $2,8, $2,6, VERGE RETIL VLUES (MILLIONS) $2,4, $1,9, $1,5, $1,6, $2,25, $1,8, $1,5, $2,5, $1,8, $1,5, $2,, $1,6, $1,5, YER 1 SPRING 215

11 TM TM MRKETLINE WHT S NEW IN Updated irworthiness Directives Updated Maintenance Programs IRCRFT LUEOOK ROUND THE GLOE National ircraft Finance ssociation (NF) nnual Conference, Scottsdale, riz.; March 24 27, 215 The National ircraft Finance ssociation is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry s service to the public; and to working with government agencies to foster a greater understanding of our members needs. sian usiness viation Conference & Exhibition (CE), Shanghai, China; pril 14 16, 215 CE is the region s largest show dedicated strictly to showcasing business aviation products and services to thousands of the region s top business leaders, entrepreneurs, wealth creators and other purchase decision-makers. European usiness viation Convention & Exhibition (ECE), Geneva, Switzerland; May 19 21, 215 ECE, jointly hosted each year by the European usiness viation ssociation (E), the leading association for business aviation in Europe, and the National usiness viation ssociation (N), the leading voice for the business aviation industry in the United States, is the premier annual meeting place for the European business aviation community. Experimental ircraft ssociation s (E) irventure, Oshkosh, Wis.; July 2 26, 215 eginning more than 6 years ago, E irventure has evolved from a small gathering of aircraft and aviators into a grand, week-long celebration known as The World s Greatest viation Celebration. Oshkosh is filled with dazzling displays of aerobatics, informative programs, hands-on workshops and diverse aircraft spanning all eras of flight. National usiness viation ssociation (N) nnual Meeting, Las Vegas, Nev.; November 17 19, 215 Founded in 1947 and based in Washington D.C., the National usiness viation ssociation (N) is the leading organization for companies that rely on general aviation aircraft to help make their businesses more efficient, productive and successful. SK IRCRFT LUEOOK If you have any questions about the ircraft luebook, please feel free to give the editorial staff a call at or us, info@aircraftbluebook.com. HOW DOES THE IRCRFT LUEOOK DETERMINE WHT MODEL YER N INDIVIDUL SERIL NUMER REPRESENTS? The ircraft luebook reports serial numbers by model year as provided by the aircraft manufacturer. Please keep in mind not all manufacturers determine model year in the same way, however most are determined in one of the following ways: year of manufacture, certificate of airworthiness issuance date, aircraft in-service date. The ircraft luebook always defers to the manufacturer regarding serial number/ model year questions because the manufacturer ultimately has the final say in this determination. MEET THE STFF Frank Craven, Publisher Frank.Craven@penton.com Carl Janssens, S Chief ppraiser Carl@jetappraisals.com merican Society of ppraisers Providing Value Worldwide Chris Reynolds, S Editor/ppraiser Chris.Reynolds@aircraftbluebook.com merican Society of ppraisers Providing Value Worldwide Paul Wyatt, Consulting Editor Paul.Wyatt@penton.com SPRING 215

MARKETLINE 2013 NEWSLETTER JET. By Dennis Rousseau President and Founder AircraftPost.com

MARKETLINE 2013 NEWSLETTER JET. By Dennis Rousseau President and Founder AircraftPost.com MRKETLINE VOL 26 NO 2 213 NEWSLETTER YTD Pre-owned Transactions & Prices Continue Down y Dennis Rousseau President and Founder ircraftpost.com When viewing a random selection of pre-owned transactions