Industry News

Ahhhh, there’s nothing like that new jet smell. Plenty of aircraft manufacturers are taking steps now to get some brand new jets certified and into production. Check out some of the latest models soon to be available:

Dassault Falcon 8X

Dassault Aviation has announced the Falcon 8X, with ground tests scheduled for this month and the first flight expected next year. This jet is paving the way for electrical power-on and features exceptional aerodynamic efficiency with Dassault’s proprietary ‘piano junction’ design.

The first Falcon 8X is expected to be certified in mid-2016 with initial deliveries anticipated for the end of 2016.

Cessna Diesel Skyhawk

Cessna Aircraft announced at this year’s EAA Venture their hopes to bring a diesel version of the Skyhawk to market soon. Cessna has been searching for an alternative fuel solution for the last few years to use in developing markets where aviation gas is not readily available.

The new Skyhawk will feature a Continental CD-155 diesel engine, which should boost the plane’s maximum range by over 58% compared to the gasoline-fueled version. It will also increase the maximum speed to 131 kt while reducing fuel burn by 25%. The diesel Skyhawk is expected to be priced at about $435,000, a little over $60,000 more than the original.

HondaJet

We’ve all been following Honda’s progress. The first production of Honda’s light business jet was presented at EAA AirVenture as Honda Aircraft Company CEO, Michimasa Fujino greeted fans and signed autographs. Certification is expected in the first quarter of next year, followed quickly by immediate deliveries of the $4.5 million aircraft. Five HondaJet aircraft have already taken to the skies and ten more are in final assembly at the Honda Aircraft plant in Greensboro, North Carolina.

Not New, but Like New with Nextant Aero Remanufacturing

Business aircraft remanufacturing firm, Nextant Aerospace, recently announced that it joined the Remanufacturing Industries Council (RIC). The RIC defines remanufacturing as a comprehensive and rigorous process by which products are returned to ‘like new’ or ‘better than new’ condition. Nextant plans to remanufacture King Air C90S into the G90XT. It also unveiled its G90XT cockpit mockup at the EAA AirVenture event in Oshkosh last week.

Exciting things are happening on the private aviation front! Which new business jet are you most interested in?

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+1.305.754.3313, or visit us online.

“Osh” is code for not only the Oshkosh, Wisconsin airport but also for the annual aviation celebration called AirVenture, hosted by Experimental Aircraft Association (EAA). Dubbed “The World’s Greatest Aviation Celebration,” this year’s event certainly held up to its reputation. The event opened Monday, July 28, and ran through Sunday, Aug. 3. Final visitor counts are still out, but all signs indicate that attendance was up this year with well over a half million visitors.

In case you weren’t at the event, here are a few highlights.

First-timers — the U.S. Air Force Thunderbirds

While AirVenture has been one of the largest aviation shows, drawing tens of thousands of pilots and aviation enthusiasts from around the world, the USAF Thunderbirds were first-timers this year. The aerobatic box — the area in which the Thunderbirds need to perform — had never been large enough. This year, the crowd line was moved, and AirVenture officials were happy to welcome the Thunderbirds to the show. Seeing six F-16s performing crossover breaks and reflection passes over the Wittman Regional Airport was a special treat.

Honor flight for Vietnam veterans

An honor flight for former Vietnam veterans left Oshkosh Friday morning with over 100 vets headed to Washington, D.C. The vets then returned to a hero’s welcome later that day.

Air shows day and night

Another huge hit was the night air shows, combining superb flying and colorful pyrotechnics in the dark skies over the airfield. The Thunderbirds aside, daily air shows every afternoon gave attendees the opportunity to see skilled pilots performing daring stunts and expert maneuvers. Each air show featured a new performer or innovation, so each one was unique.

WomenVenture

Women aviators took center stage on Wednesday for the WomenVenture event. Debbie Travis King, the only woman in the world since 1943 to fly the B-29, was the keynote speaker. Plus, for the first time, a mother performed in the USAF Thunderbirds show. Maj. Caroline Jenson, USAF, called it a “dream come true” to perform at the EAA AirVenture.

One Week Wonder project

Under normal circumstances, it usually takes a while to build a plane, but in Oshkosh volunteers who participated in the One Week Wonder project built a plane in exactly one week. Using a Zenith CH 750 Cruzer kit, donated by Zenith Aircraft Company, and an engine donated by aircraft engine company, Rotax, more than 1,000 volunteers came together to build a plane fit for flying by the end of the week. The project wrapped up on Sunday, Aug. 3, when technicians finished their safety checks and started the plane’s engine.

If you missed this year’s AirVenture, mark your calendar for next year! It was definitely an aviation event worth attending.

Sadly, a plane crash on Thursday at Wittman Field involving James Oeffinger and his passenger, Jennifer Woloszyk, overshadowed the week’s festivities. Oeffinger was killed, and Woloszyk remains in serious condition.

The business aviation market has long suffered from mixed messages and good news/bad news trends — and this year is no different. The market seems to be experiencing a moderate growth trend as indicated by recent travel statistics posted by aviation analyst firms (USB Investment Research and Argus), and yet activity in Europe declined year over year. Taking the microscope to the European data shows that intra-Europe flights dipped, but domestic activity was up in Germany, the UK, and Switzerland even while business jet activity in the Ukraine turned sharply negative.

According to aviation services company Argus, business jet flying in North America has climbed 1.9% since last May. Jet flying increased, with light jets pushing to the head of the pack last month (a 4.7% increase). Large-cabin jet activity is also strong, climbing 4.3%, and mid-size jet flying recorded a 2.3% increase. And of course, in the typical good/bad news trend, turboprop flying slipped by 1.6% from a year ago perhaps due, at least in part, to Avantair’s demise.

UBS reported that charter activity — which accounts for one-third of the seasonal cycles in flying — remains a “growth driver” and climbed 13% over last year. Meanwhile, non-charter cycles were roughly the same since last year. Business jet flying is now about 30% above the 2009 slowdown and largely being driven by the utilization of young (i.e., less than five years old) jets, a trend that has seen a 75% surge in activity from the 2009 low.

The FAA says Embraer leads the pack with an increase of 8%, as far as which manufacturer’s business jet is most often flown. Tied at 3% were Bombadier, Cessna, Dassault, and Hawker. Trailing behind was Gulfstream, whose aircraft were used just 1% more than they were early last year.

Ultimately, industry experts agree that a sustained recovery of business jet use is needed to drive the new aircraft cycle. Currently, the market remains in a condition of oversupply and will remain there until a more meaningful recovery occurs.

Flight hours rose in Asia, Europe, and the Middle East from March 2013 to March 2014, and business jet flights in the U.S. rose 3.4% in the same timeframe. With business aviation on the rise in many regions, the pilot-in-training pipeline should be swollen with candidates waiting to get in on the action. But that’s not the case; in fact, a pilot shortage could hamper business aviation growth.

According to the U.S. Government Accountability Office (GAO), the U.S. airline industry is facing a shortage of qualified pilots. Since 1980, the number of pilots in the country has decreased by about 25% to 617,000, per the Aircraft Owners and Pilots Association. And if it continues, this drought will affect both the commercial and general aviation sectors.

Possible causes

Many industry insiders are trying to determine the reason for the shortage. The problem is likely the result of many factors:

• Fewer students are entering and completing pilot training programs.
• Experienced pilots are retiring as a result of mandatory age-65 retirement.
• With military cost cuts, there are fewer military pilots — which means fewer ex-military pilots are available for commercial and general aviation positions.
• The cost of training is high, and entry-level pilot salaries are low.

The National Business Aviation Association (NBAA) considers the pilot talent pipeline one of its top safety focus areas. The reality is that business aviation will be competing with commercial operators to hire qualified pilots from an ever-shrinking pool of available candidates.

Solving the shortage

To solve the shortage problem, current aviation professionals must recruit and mentor new pilots by touting the benefits of private-jet flying: the opportunity to fly into a variety of destinations, including small airports; the additional challenges of flying business jets; and the freedom of more operational control for the crew. In addition, businesses and business aviation trade groups can more aggressively promote and recruit candidates for business aviation — for example, by interacting with student pilots at colleges and training schools.

To help ease the cost burden of pilot training, businesses can financially support pilot-training programs, as well as encourage colleges to offer aviation training and degree programs. Also, businesses, trade organizations (such as the NBAA), educational organizations, and government initiatives can provide scholarships and other financial incentives to attract students into pilot training programs. Finally, regulatory agencies can provide more flexible licensing options for pilots.

It’s in the interest of business aviation industry stakeholders to support the recruitment and training of new pilots. The continuing health and growth of the industry depends on it.

Aviation industry experts are disagreeing over whether there really is a shortage of qualified U.S. commercial pilots. According to the Airline Pilots Association, there are thousands of furloughed or unemployed pilots available to fix the shortage. Many others have gone to foreign carriers that offer higher pay and perks such as housing allowances. You can hardly blame them.

Shortage or no, the entire industry has been affected by a number of things lately — the recession being one. Regional airlines have been hit the hardest, and that’s most likely for one simple reason: As the Wall Street Journal reported, the average starting salary for a first officer on a regional carrier is $22,000, compared to the average of $60,000 for a commercial co-pilot position. When training for a pilot without military experience costs upward of $100,000, the poverty line salary begs the question: “Is it really a shortage of pilots, or just a shortage of pilots willing to work for the low pay offered by regional carriers?”

The solution may be as simple as raising the pay rates (or offering loan payoff incentives) and making the money up by raising ticket prices, say some industry experts. Additionally, the Federal Aviation Administration (FAA), which recently raised the required flying hours from 250 to an unprecedented 1,500, could relax the certificate requirements. The regional carriers would then have access to at least a few more pilots.

All in all, it’s good news for the pilots of private aircraft. While corporate pilots may earn more than charter jet pilots, charter pilots are in the enviable position of earning significantly more than the commercial regional pilots (based on experience, size of jet, etc.) and they often enjoy the opportunity to fly a variety of jets. Industry movers and shakers cannot waste their time in lines, terminals packed with vacationers, and slow security checkpoints, and private charter jet pilots offer them the freedom and flexibility they need to protect their most valuable commodity: time.

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.

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.

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.

Good news for aircraft owners who are looking to sell: JETNET’s year-end market report indicates that the inventory of preowned business jets for sale was down by almost 1% in 2013. In fact, 2013 year-end inventories of preowned business jets were at their lowest point since 2007.

Encouraging signs for sellers

It’s not quite a seller’s market yet, but for aircraft owners — especially owners of heavyweight aircraft — the signs are encouraging. In 2013, full-sale transactions for preowned business jets were up by 0.6% from 2012. In addition, these bizjets showed the largest gain in average asking prices, posting an increase of 10.7% year-over-year.

However, it took longer to sell these aircraft: The average days on the market for preowned business jets increased by 20 days to 391 days in 2013. Significantly, retail sales transactions increased only for some weight classes of preowned business jets:  heavy and medium-weight, which grew by 5.7% and 2.3%, respectively. Lightweight preowned aircraft sales declined by 4.2%.

The decline in sales of smaller preowned business aircraft is consistent with the ongoing trend of the business jet market splitting into distinct, unequal segments. The market has seen considerable bifurcation in the past five years, with the very wealthy clamoring to purchase brand-new, large, luxury aircraft, leaving the small- and preowned-small jet market floundering. However, things are looking up for the preowned jet market as young, wealthy Chinese buyers are recognizing the value of used aircraft and are partially responsible for driving the increased demand.

What to expect

What do these trends mean for preowned jet owners, buyers, and sellers? For owners who are looking to sell heavy- and mid-weight-class business jets, the market is more favorable than it has been in several years. Large-cabin private jet owners are in an especially advantageous position, as demand for these aircraft continues to grow. However, sellers will need to remain patient, as sales could take a year or longer to close.

The bottom line is this: Even though the market is more amenable to sellers, it is still a buyer’s market, with inventories above 10% and preowned for-sale business jets staying on the market longer.

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.