BIZAV INTELLIGENCE MARKET INDICATORS
Asset Insight’s market analysis of May 31 revealed a 1.1% increase to its
tracked fleet. Large jets led the way with a 4.6% increase and Small jets
increased 1.5%...
The tracked fleet covered 92 fixed-wing models and 1,633 aircraft listed ‘For
Sale’. Average Ask Price decreased another 4.6% in May to register a fourth
consecutive record low monthly figure and a total decrease of 7.5% Year-to-
Date.
By individual grouping, Large jet Ask Prices decreased 7% last month, while
Medium jets posted a new record low figure by decreasing 5.2%. Small jets and
Turboprops were a different story, as their Ask Price increased 0.7% and 3%,
respectively.Inventory Fleet Maintenance Condition
Large and Medium jet asset quality improved in May, Small jet quality fell, while
Turboprops registered virtually no change. Maintenance Exposure fell (improved)
for Medium jets and Turboprops, while Large and Small jets suffered an increase.
The tracked fleet’s Quality Rating remained unchanged, retaining its
‘Excellent’ figure at 5.257 on Asset Insight’s scale of -2.5 to 10. Average
Maintenance Exposure (an aircraft’s accumulated/ embedded maintenance
expense) increased (worsened) 2.3% to $1.411m but was better than the fleet’s
12-month average.Maintenance Exposure to Ask Price (ETP) Ratio
The ETP Ratio is a useful indicator of an aircraft’s marketability. It is computed by
dividing the asset's Maintenance Exposure (the financial liability accrued with
respect to future scheduled maintenance events) by its Ask Price.
‘Days on Market’ analysis has shown that when the ETP Ratio is greater than
40%, a listed aircraft’s time on the market increases, usually by more than 30%.
Current analysis revealed nearly 54% of all tracked models and over 64% of all
units listed ‘For Sale’ posted an ETP Ratio above 40%.
The tracked fleet’s ETP Ratio worsened for the third consecutive month to
64.8%, from April’s 63.5%. Turboprops once again posted the lowest (best) ETP
Ratio at 49%, Large jets followed (62.6%), Medium jets were next (67%), while
Small jets registered 72.8%.Market Summary
Large Jets:Inventory aircraft increased by 15 units. For the twelfth consecutive
month, the tracked fleet retained its ‘Excellent’ Quality Rating, improving slightly
to 5.371, but the group’s Financial Exposure worsened 2% as more than half of
the fleet additions were of below average asset quality.
While the group’s Ask Price is only marginally above its 12-month low figure,
it is worth noting the number is only 0.5% below the December 2017 value. With
asset quality as high as it is, this is probably one of the best times to pursue an
acquisition.
Medium Jets:If you are in the market for a Medium jet, your timing could not be
better. The group posted a record low Ask Price in May, while asset quality
improved 0.25% and Maintenance Exposure improved 1%.
Medium Jets have maintained a ‘Very Good’ rating for quite some time. The
challenge for sellers continues to be the large number of assets listed ‘For Sale’,
even though the tracked fleet’s inventory decreased by another five units in May.
Small Jets: Inventory increased by seven units. The mix of aircraft leaving and
joining the ‘For Sale’ fleet decreased asset quality by 0.89% and increased
(worsened) Maintenance Exposure by 1.2%. The group retained its ‘Excellent’
Quality Rating, and even posted a 0.7% increase to last month’s record-low Ask
Price figure. Identifying good values within this group will take some work.
However, the low Ask Price and better than average Maintenance Exposure
should make such research financially worthwhile for buyers. Sellers, on the other
hand, definitely need to consider how their aircraft is positioned relative to its
competitors to achieving a decent transaction value.
Turboprops:The group maintained its ‘Very Good’ Quality Rating, as the figure
remained virtually unchanged at 5.04. Maintenance Exposure improved a
nominal 0.4%, and Ask Price increased 3%. With the group’s ETP Ratio and the
Ask Price hovering at their 12-month average, buyers should be able to identify
some good values, assuming they conduct an appropriate level of due diligence.
However, Turboprop sellers might actually be in the driver’s seat for a change...
MI http://www.assetinsight.com Chart B
Source: AMSTAT (www.amstatcorp.com)
Asset Insight, LLC (www.assetinsight.com)32 AVBUYERMAGAZINE– July 2018 http://www.AVBUYER.com Aircraft Index see Page 1295.257$1.41$1.30$1.35$1.40$1.455.155.205.255.305.355.40J J A S O N D J F M A M
Quality Rating Maintenance Exposure Quality Rating Trendline$ Million$ MillionChart A
Fleet Maintenance ConditionIn-Service Aircraft Values & Maintenance Condition
Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) as of
May 31, 2018LOW RISK AIRCRAFT HIGH RISK AIRCRAFT
MODEL ETP RATIO MODEL ETP RATIOBoeing BBJ 4.8%
Citation CJ4 525C 10.6%
Phenom 300 11.2%
F900EX EASy 11.4%
F2000LX 12.5%
CL-605 13.3%
G-150 14.9%
Pilatus PC-12 16.4%
Citation Sovereign 680 17.5%
Citation CJ2+ 525A 18.3%
G- 450 19.2%
Citation CJ3 19.6%
Piper Meridian 19.9%
G550 21.9%
F900DX 22.4%
Learjet 45XR 22.9%
KingAir 350 - Post-2000 23.3%
Hawker 900XP 25.0%
Citation XLS (MSG3) 25.4%
Citation Encore 26.3%
Citation XLS 28.2%
Global 5000 28.3%
KingAir B-200 - Post-2000 2 8.6%
Phenom 100 29.0%
Falcon 50EX 29.8%
Challenger 300 29.9%
Global XRS 29.9%
F900EX 30.0%
F900B 31.0%
Learjet 60XR 31.9%
Citation CJ2 32.6%
Citation CJ1+ 33.3%
Citation Mustang 510 34.1%
KingAir 350 - Pre-2001 36.3%
Embraer Legacy 600 37.0%
Hawker 850XP 39.4%Citation Excel 560XL 40.7%
Citation Bravo 41.0%
Hawker 400XP 41.0%
G-200 43.0%
Learjet 45 w/APU 44.5%
KingAir 300 45.2%
Citation X (MSG3) 45.7%
CL-604 46.1%
KingAir B-200 - Pre-2001 4 6.8%
Learjet 45 48.4%
Piaggio P-180 II 48.4%
Citation V 560 50.0%
Premier 1A 50.5%
Hawker Beechjet 400A 51.9%
F900 57.0%
Falcon 2000 57.8%
GV 60.9%
Premier 1 61.9%
Hawker 800XP 63.1%
GIV-SP 63.2%
Citation V Ultra 63.6%
GIV-SP (MSG3) 87.2%
Falcon 50 88.0%
Piaggio P-180 89.5%
Global Express 92.6%
Learjet 60 93.7%
Hawker 1000A 95.2%
KingAir C90 101.2%
Citation ISP 103.5%
Beech B-1900C 107.9%
Citation VI 108.3%
Citation II 112.2%
Hawker 800A 139.5%
Learjet 31 141.2%
GIV 147.8%
Hawker Beechjet 400 156.1%
CL-601-3R 159.7%
CL-601-3A 170.4%
Learjet 55 183.0%
Learjet 35A 199.4%
CL-601-1A 224.9%
Falcon 20-5 283.3%Tony Kioussis is President of Asset Insight.
The company provides audit and valuation
services and has developed a standardized
Asset Grading System scale that evaluates
an aircraft’s maintenance condition.MarketIndicators July18.qxp_Layout 1 19/06/2018 15:31 Page 6