2018 Business Aviation Review

Transcription

1 2018 Business Aviation Review J A N U A R Y A R G U S I N T E R N A T I O N A L, I N C. P R O P R I E T A R Y & C O N F I D E N T I A L

2 BUSINESS AVIATION OVERVIEW TRAQPak s 2018 annual business aviation review is here with a review of all of the key metrics for the year. In 2018 flight activity year grew at a flatter pace compared to previous years, but growth is still growth. We eclipsed the 3,000,000 flight mark for the second year in a row and look to be on track for more of the same in flight activity rose 0.9% from 2017 while flight hours rose 0.7% for the same period. Flight activity was positive for the start of the year, but then took a slight downward turn during the 2 nd half. The 1 st half (Jan Jun) of 2018 was up 2.3% compared to the same period in 2017, while the 2 nd half (Jul Dec) was down 0.5% compared to Q experienced the strongest year over year rise in flight activity, up 3.2% from Q Q2 followed with an increase of 1.5%, while Q3 & Q4 saw declines of 0.8% & 0.2% respectively. This review will look at flight activity for the overall industry, the individual industry segments, aircraft categories & types, and we will review top operators & airports for the period.

3 BUSINESS AVIATION FLIGHT ACTIVITY Total Business Aviation Flight Activity , , , , , , , , , , Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Flight activity for 2018 was up 0.9% when compared to It was up 4.8% when compared to 2016 and 8.1% when compared to 2015.

4 FLIGHT ACTIVITY BY INDUSTRY SEGMENT Total Flight Activity by Operational Category 2017 vs ,800,000 1,600,000 1,400,000 Part 91 Part 91 Part Part Part 91 Part ,200,000 1,000, ,000 Part 135 Part 135 Part 135 Part 135 Part 135 Part , , ,000 Fractional Fractional Fractional Fractional Fractional Fractional VS PART 91 PART 135 FRACTIONAL TOTAL Turbo Prop 1.5% -0.1% -3.4% 0.7% Small Cabin Jet 0.8% -2.9% 0.3% -0.6% Mid Size Cabin Jet 1.0% -0.1% 8.5% 2.3% Large Cabin Jet 1.1% 9.3% -20.5% 1.2% Total 1.1% 0.5% 1.2% 0.9%

5 PART 91 FLIGHT ACTIVITY COMPARISON Part 91 Flight Activity January December , , , , , , , , , , , Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6 PART 91 INDUSTRY TRENDS IN 2018 In the past 12 months, Part 91 flights & flight hours grew 1.1% & 0.6% respectively, when compared to Mid-size cabin Part 91 flight hours increased 1.1% in Large & small cabin Part 91 flight hours each grew at a rate of 0.4% during the year. Turboprop flight hours saw an increase of 0.7% during Part 91 operators flew 2,285,265 hours over the last 12 months; that represents an increase of 14,487 hours over 2017.

7 PART 135 FLIGHT ACTIVITY COMPARISON Part 135 Flight Activity January December , ,000 95,000 90,000 85,000 80,000 75,000 70,000 65,000 60, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

8 PART 135 INDUSTRY TRENDS IN 2018 In the past 12 months, Part 135 on-demand charter flights & flight hours grew 0.5% & 0.7% respectively, when compared to Large cabin Part 135 flight hours grew 7.6% in Midsize Part 135 flight hours saw a decline of 0.1% during the year, and small cabin aircraft declined 3.2%. Part 135 turboprop flight hours decreased 0.5% during Part 135 operators flew 1,586,261 hours over the last 12 months; that represents an increase of 11,707 hours over 2017.

9 FRACTIONAL FLIGHT ACTIVITY COMPARISON 35,000 34,000 33,000 32,000 31,000 30,000 29,000 28,000 27,000 Fractional Flight Activity January December ,000 25, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

10 FRACTIONAL INDUSTRY TRENDS IN 2018 In the past 12 months, Fractional flights & flight hours increased 1.2% & 0.9% respectively, when compared to Mid-size cabin Fractional flight hours saw an increase of 8.3% in Small cabin flight hours decreased 0.5% while large cabin flight hours dropped 15.7% during the year. Fractional turboprop flight hours decreased 5.5% during Fractional operators flew 575,108 hours over the last 12 months; that represents an increase of 4,977 hours over 2017.

11 FLIGHT HOURS BY AIRCRAFT CATEGORY 1,600,000 1,400,000 Flight Hours by Aircraft Category 2017 vs ,200,000 1,000, , , , ,000 0 Turboprops Small Cabin Mid-Size Cabin Large Cabin Turbo Prop Small Cabin Mid Size Cabin Large Cabin FLIGHT HOURS BY AIRCRAFT CATEGORY AIRCRAFT CATEGORY % CHANGE Turboprop 1,177,322 1,177, % Small Cabin 968, , % Mid-Size Cabin 1,327,107 1,357, % Large Cabin 943, , % Total 4,415,602 4,446, %

12 TURBOPROP FLIGHT ACTIVITY COMPARISON 105,000 Turboprop Flight Activity January December 2018 Q , , % 95,000 85,000 75,000 65,000 55, Q , , % Q , , % 45,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 turboprop flight activity saw an increase of 0.7% from Q was the strongest period for turboprop flight activity, up 3.2% from Q Q , , %

13 SMALL CABIN FLIGHT ACTIVITY COMPARISON 70,000 Small Cabin Flight Activity January December 2018 Q , , % 65,000 60,000 55,000 50,000 45, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 small cabin flight activity was down 0.6% from Q was the best quarter for small cabin, up 1.5% from the respective quarter in Q , , % Q , , % Q , , %

14 MID-SIZE CABIN FLIGHT ACTIVITY COMPARISON 85,000 80,000 75,000 70,000 65,000 60,000 55,000 50,000 45, Mid-Size Cabin Flight Activity January December 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 mid-size cabin flight activity increased 2.3% from Q was the best performing quarter for mid-size aircraft, up 3.7% from Q Q , , % Q , , % Q , , % Q , , %

15 LARGE CABIN FLIGHT ACTIVITY COMPARISON 45,000 40,000 35,000 Large Cabin Flight Activity January December 2018 Q , , % Q , , % 30,000 25, Q , , % 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Large cabin flight activity saw another year of increases in 2018, up 1.2% from Q was the best performing quarter for large cabin aircraft, up 5.2% from Q Q , , %

16 TOP US PART 135 OPERATORS IN 2018 RANK OPERATOR NAME 2018 HOURS 2017 HOURS 2018 FLEET SIZE 2017 FLEET SIZE 1 GAMA AVIATION SIGNATURE 91,195 80, EXECUTIVE JET MANAGEMENT 61,982 55, XOJET 45,404 45, DELTA PRIVATE JETS 40,385 38, SOLAIRUS AVIATION 30,205 24, JET LINX AVIATION 29,590 32, JET AVIATION 24,136 19, JET EDGE 21,924 20, EXCLUSIVE JETS 19,993 11, TRAVEL MANAGEMENT COMPANY 19,033 30, CLAY LACY AVIATION 18,957 17, MOUNTAIN AVIATION 15,383 10, CORPORATE FLIGHT MANAGEMENT 14,420 16, JETSUITE AIR 12,583 15, AERO AIR 12,488 11, JET SELECT 11,002 10, RED WING AEROPLANE CO 9,525 9, TALON AIR 9,131 9, MERIDIAN AIR CHARTER 8,851 8, LJ ASSOCIATES 8,695 8, WORLDWIDE JET CHARTER 8,646 8, SC AVIATION 8,462 8, ULTIMATE JET CHARTER 7,726 6, BERRY AVIATION 7,610 6, PEGASUS ELITE AVIATION 7,578 6, *Note Fleet Size based on DO85 dated October 1, 2018 *Note Fleet Size based on DO85 dated January 2, 2018 *Note- Excludes Medical Flights *Note- Gama Aviation Signature includes Gama Aviation, TWC Aviation & Sterling Aviation

17 TOP FRACTIONAL OPERATORS IN 2018 RANK OPERATOR NAME 2018 HOURS 2017 HOURS % YOY CHANGE 1 NETJETS 365, , % 2 FLEXJET 85,520 78, % 3 PLANESENSE 35,047 35, % 4 FLIGHT OPTIONS 26,270 34, % 5 EXECUTIVE FLIGHT SERVICES 18,408 18, % 6 AIRSPRINT CANADA 12,168 10, % 7 NICHOLAS AIR 10,449 8, % 8 NORTHERN JET MANAGEMENT 5,085 5, %

18 TOP 25 US AIRPORTS IN 2018 AIRPORT 2017 DEPARTURES 2018 DEPARTURES % YOY CHANGE KTEB 74,277 73, % KDAL 34,973 35, % KHPN 35,189 32, % KVNY 27,060 30, % KLAS 29,424 29, % KIAD 30,550 29, % KHOU 29,434 28, % KPBI 27,781 27, % KAPA 26,655 27, % KMDW 25,623 25, % KPDK 26,673 23, % KSNA 19,956 20, % KSDL 19,853 19, % KBED 19,439 19, % KBFI 18,594 18, % KBNA 19,075 18, % KOPF 16,324 16, % KAPF 15,670 16, % KAUS 16,683 16, % KSAT 16,462 16, % KSJC 17,055 16, % KPWK 15,584 15, % KOAK 15,492 15, % KFXE 16,254 15, % KSLC 15,113 15, % New York Area Departures- 138,963 South Florida Area Departures- 103,269 Los Angeles Area Departures- 89,818 Dallas Area Departures - 69,795 Chicago Area Departures- 58,265 *Note- New York- KTEB, KMMU, KHPN, KLGA, KJFK, KEWR, KCDW, KFRG *Note- South Florida- KFLL, KFXE, KBCT, KMIA, KPBI, KPMP, KOPF, KHWO, KTMB *Note- Los Angeles- KVNY, KLAX, KSNA, KLGB, KHHR, KSMO, KBUR, KFUL, KTOA *Note- Dallas- KDAL, KDFW, KADS, KGKY, KFTW, KAFW, KRBD *Note- Chicago- KPWK, KUGN, KDPA, KMDW, KORD, KGYY

19 DEPARTURES BY FAA REGION 1/1/ /31/ ,294 Flights 291,796 Flights 388,003 Flights 110,504 Flights 368,828 Flights 144,547 Flights 373,817 Flights 694,339 Flights REGION FLIGHTS Southern 694,339 Western Pacific 405,294 Great Lakes 388,003 Southwest 373,817 Eastern 368,828 Northwest 291,796 Central 144,547 Northeast 110,504 Six regions recorded a gain in 2018 with the Northwest region recording the largest year over year growth, up 2.7% from The Eastern & Great Lakes regions were the only regions to post a yearly decline, down 1.6% & 0.2% respectively.

20 DEPARTURES BY STATE 1/1/ /31/2018 TOP 5 STATE FLIGHTS California 280,850 Texas 278,890 Florida 267,731 New Jersey 104,464 Georgia 96,338 44,148 92,427 11,670 51,751 80,297 5,936 30,997 34, ,890 24,454 New Mexico recorded the largest year over year growth, up 16.4%, while New Hampshire, 1 of 21 states to report a year over year decline, posted the largest yearly decline, down 4.3%. BOTTOM 5 STATE FLIGHTS New Hampshire 11,670 West Virginia 10,375 Delaware 5,936 Rhode Island 5,927 Vermont 4,550

21 DEPARTURES BY PROVINCES & TERRITORIES 1/1/ /31/2018 5,564 REGION FLIGHTS Ontario 55,098 Quebec 48,463 Alberta 36,914 British Columbia 27,948 Saskatchewan 12,764 Manitoba 10,411 New Brunswick 6,779 Newfoundland 5,564 Nunavut 3,374 Nova Scotia 2,510 NW Territories 1,886 Yukon Territories 1,842 Prince Edward Is ,411 48,463 55, Nunavut saw the largest jump in yearly flight activity, up 27.6% from Manitoba saw the largest yearly decline, down 22.4%.

22 2018 DAILY FLIGHT ACTIVITY ANALYSIS TOP 10 DAYS DATE FLIGHTS 16-Feb-18 11, May-18 11, Nov-18 11, Feb-18 11, Apr-18 10, Oct-18 10, Oct-18 10, Oct-18 10, Jul-18 10, Sep-18 10,744 7 of the Top 10 days were Thursdays. The other 3 were Fridays. In 2017 we saw 37 calendar days with 10,000 or more flights, while 2018 saw that metric increase to 57 days. BOTTOM 10 DAYS DATE FLIGHTS 10-Feb-18 5, May-18 5, Apr-18 5, Sep-18 4, May-18 4, Dec-18 4,280 4-Jul-18 4, Nov-18 3, Dec-18 3, Dec-18 3,043 With the exception of February 10 th & April 14 th every day on the bottom 10 was either a major holiday or part of the days leading up to a major holiday. AVERAGE DAILY FLIGHTS- BY MONTH DATE FLIGHTS 17-Jan 7, Feb 8, Mar 8, Apr 8, May 8, Jun 8, Jul 8, Aug 8, Sep 8, Oct 8, Nov 8, Dec 7, months saw an average of 8,000 or more flights per day. That is up from 8 months in September was the only month that declined year over year. AVERAGE FLIGHT ACTIVITY- BY DAY OF WEEK DAY FLIGHTS Mon 8,369 Tues 8,805 Wed 9,413 Thur 9,968 Fri 9,480 Sat 5,983 Sun 7,277 All 7 days of the week recorded increases in 2018 daily activity. Thursday continues to produce the strongest activity with Friday and Wednesday following closely behind.

23 TOP AIRCRAFT TYPES BY FLIGHTS IN 2018 AIRCRAFT CATEGORY TYPE FLIGHTS Single Engine TP Pilatus PC ,676 Multi Engine TP King Air ,068 Very Light Jet Phenom ,233 Light Jet Phenom ,428 Mid-Size Jet Citation Excel/XLS/XLS+ 166,883 Super Mid Jet Challenger ,498 Large Jet Challenger 600/601/604/605 83,392 Super Long Range Jet Gulfstream G-V/G500/G550 49,357 *Note- Chart lists the top aircraft type, in terms of flights, in each TRAQPak aircraft category. *Note- King Air 200 represents all variants of the King Air 200

24 2018 INDUSTRY TRENDS If 2017 was a transition year for Business Aviation, then 2018 continued that trend. As the year closed out we looked back and saw a mostly calm year for the industry, in terms of flight activity. While our high s weren t as high as previous years, our low s weren t as low either. We crossed the 3,000,000 flight mark for the second year in row, all 3 operational categories recorded year over year growth and we did see an overall annual increase. However, the unprecedented gains we have seen in the Part 135 industry finally started to cool in 2018 and a majority of 2018 s gains occurred during the first 6 months of the year. With overall growth starting to cool (not decline), the two biggest questions in 2019 center around the categories that spurred that significant growth: Will Part 135 charter activity see a return to previous growth levels and will large cabin activity return to the highs of 16 & 17? 2016 saw 10 states record a year over year decline while 2017 saw 13 states drop from the previous year. Unfortunately we watched that number jump to 21 states in 2018, but, on the positive side, the top 3 states (California, Texas and Florida) all recorded year over year increases in activity. With more positive states than negative states, and more positive Provinces as well, we re still in solid territory. However, questions surrounding our uncertain political climate, as well as business aviation s share in an FAA reauthorization bill, could have a far reaching impact on where activity goes in 2019.

25 2018 INDUSTRY TRENDS CONT D 2018 produced year over year rises for 8 of the 12 months on the calendar. The middle of the market (mid-size jets) produced the largest growth for the industry but there were bright spots mixed in across the board. This now represents 5 straights years of consistent growth in business aviation ( ). Part 91 flight activity finished 2018 up 1.1% from 2017 with 8 of the 12 months producing year over year increases. March, June, September & November each posted a year over year decrease in activity. Part 135 flight activity finally saw its growth rate cool in 2018 with recorded yearly rises in 6 of the 12 months. The strongest month on the calendar was February, which saw growth of 8.8%. The segment finished the year up 0.5% from The Fractional industry continued its rebound from the sluggish years of consolidation. The segment saw yearly gains in 10 of the 12 months to post an increase of 1.2% in The strongest individual segment growth occurred in the mid-size cabin market which posted 8.5% growth over 2017.

26 2018 INDUSTRY TRENDS CONT D 2018 produced flight activity gains in 3 of our 4 aircraft segments. The mid-size cabin market saw the strongest growth, but the large cabin market followed closely behind to close out the year turboprop flight activity was up 0.7% from 2017 which was down from the 2.6% & 3.5% rises recorded in 2017 & The sluggish growth for the segment can be attributed to the decline in Fractional turboprop flying. The jet categories were mixed in 2018 with mid-size cabin aircraft providing the largest yearly gain, up 2.3% from Large cabin aircraft saw a yearly rise of 1.2% from 2017, while small cabin aircraft declined 0.6% for the year. The small cabin decline was solely attributed to the 2.9% drop in small cabin Part 135 flight activity.

27 2019 FLIGHT ACTIVITY FORECAST After a mild, but positive, year, TRAQPak analysts estimate that the trend will continue at least through Q TRAQPak analysts estimate that flight activity in January, February & March 2019 will rise, slightly, by 0.5% over the same period in Analysts predict that total year over year flight activity will rise during each month in Q with expected gains of 0.6%, 0.6% and 0.3% in January, February and March, respectively. Analysts predict Fractional flight activity will see the largest rise in Q1 2019, up 3.3%. Part 91 activity is predicted to rise 1.4% during the same period, while Part 135 charter flight activity is expected to decline during Q1, down 1.6% from 2018.

28 Thank You U N E Q U A L L E D E X P E R I E N C E, I N VA L U A B L E R E S U LT S A R G U S I N T E R N A T I O N A L, I N C. P R O P R I E T A R Y & C O N F I D E N T I A L