Now that we have a full quarter of 2014 behind us, we have enough information to take a look at foreign business aviation markets and seek out signs of sustainable growth. The UK especially is a market that business aviation experts are interested in examining.
While a three month surge of business aviation activity recorded what may seem like an impressive 52,794 flights in Europe through April 2014, this activity actually represents a 2.3% year-over-year decline overall. But not all the news is bad: The UK private aviation market has shown some growth. Check out the following statistics from Hangar8 this year:
- The UK’s heavy jet fleet now accounts for 15% of the European total.
- The number of business flights into London’s busiest business airports rose 6% with an additional 300 flights.
- The unaudited half-year results revealed a 13.1% increase in revenue and a 25% increase in gross profit.
While all of these signs seem to reflect a strong and competitive repositioning as well as a growing market, the crisis in Ukraine isn’t helping anything, undermining the uncertain climate. What may appear as a growth streak might not end up being sustainable in the face of these other statistics:
- Business jet activity in Europe fell 1.1% from last March.
- Charter flying dipped by 3.9% from last March.
- Business jet activity in Germany declined 15% with 310 fewer flights than last year.
- Activity in Ukraine and Russia fell 30% and 13%, respectively.
Until the crisis in Ukraine is settled, it seems unlikely that we’ll be able to definitively determine whether business aviation is taking off in the UK or not. In the mean time, we’ll keep observing — and keep our fingers crossed.
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We’ve heard it over and over again this year: The BizAv market is looking up! Things are finally getting better! In fact, 43.3% of respondents to JetNet iQ’s latest operator survey believe that the business aviation market has passed the low point and is on the upswing.
Now that we’re a full quarter into 2014, it’s a good time to take a hard look and see if we were too optimistic about the business aviation market recovery.
Some improvement factors to note:
- Macroeconomic fundamentals are slowly improving.
- Business jet flying in the U.S. is increasing.
- Pre-owned inventories continue to fall.
- Sales transactions are strong.
- Business jet deliveries this year are on the rise for the first time since 2008.
“Take a look around, because this is the recovery,” JetNet iQ director Rollie Vincent said at the NBAA Aircraft Finance, Registration and Legal Conference.
Although private jet pricing remains soft, it does look like the US bizav market is, in fact, recovering. Some experts believe that these predictions are true in the U.S., but perhaps not as likely in other countries. “The signs of recovery in business and general aviation in North America continued, with movements up 4% in the first quarter,” found BBA Aviation’s flight support division.
Flights for large cabin aircraft have risen 10.4% since March 2013 and the primary buyers are large U.S. corporations. Most of Western Europe remains depressed and buyers in many emerging markets are cautious. The situation in Ukraine is not good news for bizav sales to Russia or the CIS (at least one aircraft sale fell through because the buyer is on the sanctions list).
The conclusion? The U.S. market is definitely recovering, but that good luck isn’t necessarily holding for European countries. We’ll have to keep waiting for worldwide improvement.
While the term “black charter,” referring to illegal airplane charter, makes aircraft operators sound like shady villains, the term actually refers to a very common occurrence in the private jet world. Specifically, if you have access to a private jet through an owner you know and you occasionally fly using that jet — including the crew the owner uses. You likely feel you’re getting a great deal; the arrangement offsets the cost of jet ownership for the private owner and it’s likely a lucrative option for you as well.
So, what’s wrong with friends helping friends? This arrangement is illegal for one simple reason: the Federal Aviation Administration (FAA) requires public charters to have an Aircraft Operating Certificate (AOC) and those operators are regulated under part 135 of the FAA regulations. Essentially, you’re hitching a ride from an acquaintance that is not a commercially licensed pilot, and that is an illegal move — for you, for the pilot, and for the jet owner.
Commercial pilots holding AOC certification are required to undergo extensive training every six months and subject themselves to regular flight reviews from senior pilots. The aircraft also undergoes routine maintenance and safety inspections by trained pros, also held to high standards.
Still, black charters are very common. In fact, some estimates by industry professionals indicate that up to 50% of all jet charters worldwide are illegal. The chances of getting caught borrowing or loaning an aircraft are not large — the FAA and DOT have their hands full — and as long as the flight proceeds without incident, there’s little chance of enforcement action.
The consequences of being caught, however, are huge, and many jet owners either don’t know about the possible penalties or they turn a blind eye to Part 135 regulations:
- Letting someone borrow a jet you own means putting your crew’s licenses on the line — even if the crew doesn’t know the flight is illegal (and they usually don’t).
- Crewmembers could have their license — their livelihood — suspended or revoked and could be assessed significant fines. As the owner of the aircraft, you could also be subjected to serious FAA fines. Whatever insurance you carry on the jet involved in a black charter could be voided if an accident occurs while it is illegally carrying a passenger.
- If you are the illegal passenger on a black charter, your only recourse in the event of an accident is to sue the owner, your friend, for your losses.
One further note — as an aircraft owner, you may escape the notice of the FAA and your insurance company, but that doesn’t mean you’re off the hook. Usually these arrangements catch the eye of the IRS, an entity that is often much better at enforcement than the FAA. If an audit reveals you allowed the use of your aircraft and crew and received money for those flights, the IRS may deem that you owe Federal excise taxes that operators are required to collect and pay for every charter flight.
It’s not uncommon for the jetset crowd to fall victim to petty theft. After all, when you’re always on the go, you’re bound run into situations ripe for thievery ranging from old-fashioned pick-pockets to tech-savvy criminals who use RF devices to steal credit card information.
Now there’s a new and nifty gadget on the market to thwart these thieves: the iWallet. This surprisingly sleek wallet features four layers of protection for your cash, credit cards, and personal information. In addition to being constructed out of space-age carbon fiber or aluminum, the fingerprint security feature ensures the wallet only opens for one person: you. Your iWallet also connects to your Bluetooth-enabled smartphone or other device and an alarm sounds if they’re separated more than 5 meters. It even features RF shielding technology, which protects your credit cards from RF devices.
Starting at $420, there are four different iWallets to meet your preferences in looks, size, and protection. Whichever one you choose, the iWallet is sure to be more convenient than dealing with the woes of lost or stolen credit cards! Here’s to happier, safer travels.
If you only look at one source on pre-owned private jet sales, you could easily think sales are improving … but you could just as easily think they’re declining from a different source, even if the numbers are all correct. That’s because there are a lot of complex factors that play into pre-owned jet sales, and differing numbers can easily skew the raw data if you aren’t paying careful attention.
According to AMSTAT, the leading provider of business aircraft market research, first quarter sales of the world’s 20,170 pre-owned business jets have been characterized as just ‘mediocre’:
- Heavy jets — 92 sales (1.7% of the fleet)
- Medium jets — 184 sales (2.7% of the fleet)
- Light jets — 192 sales (2.4% of the fleet)
When compared to the previous quarter, Q4 2013, that’s a drop of 0.9%, but as Andrew Young, general manager of AMSTAT, notes: strong Q4 sales are traditionally a signal for a Q1 drop. “This was certainly true this year with 2.3% of the business jet fleet turning over in Q1 2014, compared to 3% in Q4 2013,” Young says. “However, it was disappointing to see a smaller percentage of the active fleet turning over in Q1 2014 versus Q1 2013.”
AMSTAT also counted a total of 2,355 business jets listed for sale (11.7% of the fleet) in Q1, which is a solid 1.1% increase on the same quarter the previous year and an improvement over the prior 2 years with 0.7 and 0.6% respectively. These results demonstrate fair progress toward recovery in the business jet market since the recession of 2008-2009, but it’s still a buyer’s market with plenty of business jets for sale.
The trends in jet prices are just as messy:
- Average asking prices for pre-owned jets declined by 11.6%
- Average asking prices for used turboprops fell 29.4%
While that sounds bad for sales, if we examine the raw data, we get a slightly more positive picture:
- Pre-owned business jets are selling on average 73 days faster than in 2013
- Sales transactions are up 3.1% from Q1 2013
So, what do you think? Are things improving or declining overall? We may just have to wait and see.
If you only look at one source on pre-owned private jet sales, you could easily think sales are improving … but you could just as easily think they’re declining from a different source, even if the numbers are all correct. That’s because there are a lot of complex factors that play into pre-owned jet sales, and differing numbers can easily skew the raw data if you aren’t paying careful attention.
According to AMSTAT, the leading provider of business aircraft market research, first quarter sales of the world’s 20,170 pre-owned business jets have been characterized as just ‘mediocre’:
- Heavy jets — 92 sales (1.7% of the fleet)
- Medium jets — 184 sales (2.7% of the fleet)
- Light jets — 192 sales (2.4% of the fleet)
When compared to the previous quarter, Q4 2013, that’s a drop of 0.9%, but as Andrew Young, general manager of AMSTAT, notes: strong Q4 sales are traditionally a signal for a Q1 drop. “This was certainly true this year with 2.3% of the business jet fleet turning over in Q1 2014, compared to 3% in Q4 2013,” Young says. “However, it was disappointing to see a smaller percentage of the active fleet turning over in Q1 2014 versus Q1 2013.”
AMSTAT also counted a total of 2,355 business jets listed for sale (11.7% of the fleet) in Q1, which is a solid 1.1% increase on the same quarter the previous year and an improvement over the prior 2 years with 0.7 and 0.6% respectively. These results demonstrate fair progress toward recovery in the business jet market since the recession of 2008-2009, but it’s still a buyer’s market with plenty of business jets for sale.
The trends in jet prices are just as messy:
- Average asking prices for pre-owned jets declined by 11.6%
- Average asking prices for used turboprops fell 29.4%
While that sounds bad for sales, if we examine the raw data, we get a slightly more positive picture:
- Pre-owned business jets are selling on average 73 days faster than in 2013
- Sales transactions are up 3.1% from Q1 2013
So, what do you think? Are things improving or declining overall? We may just have to wait and see.
Exactly what is an AHM? Aircraft health monitoring systems (AHMs) use sensors to collect and feed performance data from various systems in an aircraft — aero-propulsion, structures, and ancillary systems — to a central server. That data is then available to operators, OEMs, and ground engineers, who use it to proactively identify maintenance issues and make repairs.
Simply put, this planned downtime helps aircraft owners avoid unplanned downtime that would put an aircraft out of service. AHMs give a real-time picture of a jet’s health, allowing for real-time adjustments that make flying safer and maintenance records more accurate.
Newer aircraft such as those from Gulfstream and Embraer already offer AHMs, and industry experts expect the market for line-fit and retrofit AHM products to continue to grow — and fast. The current market for line-fit and retro-fit AHM markets is $896 million and a compound annual growth rate of 2.1% is projected over the next five years. It’s easy to see why the market is growing so quickly; AHMs
- enable proactive maintenance,
- make maintenance quicker and more reliable,
- cut costs,
- make aircraft safer, and
- reduce downtime that results from an aircraft being grounded.
Despite all of these perks, AHMs still have industry barriers to overcome: There has been some resistance from regulators over the acceptance of AHMs and the data they provide. However, manufacturers and mechanics alike are working to change this perspective and the associated regulations, from general maintenance programs to customized mechanical checks based on the real-time data offered by AHMs.
As acceptance grows and more owners look to incorporate AHM technology into their aircraft, the need for skilled aircraft maintenance technicians will increase. It is important to seek out technicians who are specifically trained to use AHMs, with both computer skills and skills in aircraft mechanics.
AHMs are on the rise and will become a more commonplace feature in newer aircraft and retro-fitted older aircraft in the next few years, making the skies even safer.
Contact L & L International if you need assistance in purchasing or selling a private jet. You can reach our sales specialists today at sales@L-Lint.com, call us any time at 877-453-8276 (+1.305.754.3313), or visit us online.
