EFTA01087027.pdf

/AVJE CORPORATION s BBJ MARKET SUMMARY DECEMBER 2014 MARC J. FOULKROD CHAIRMAN AND CEO I ANDREW C. BRADLEY / PRESIDENT SALES BRIAN MILLER / VP SALES KIP HAYES / SALES DIRECTOR ANNE MARIE FITHIAN I MARKETING BRYAN DUNNIGAN / SALES JON P. CONLON / SENIOR MARKET ANALYST SAM KINSER / MARKET ANALYST In This Issue Market Overview/Trends P.I Recent Activity/For Sale P.2 Buyer/Seller Profile P.3 GENERAL MARKET OVERVIEW: There are currently fifteen (15)Boeing Business Jets for sale ranging in price from $25.9MUSD for a 1998 aircraft with 3700 hours to S72.OMUSD for a 2010 model with 762 hours of total time. The BBJ market shows a large price discrepancy between pre-2005 models able to be purchased well below S37.0MUSD and 2005 and newer models starting at S55.0MUSD and DECEMBER MARKET SUMMARY reaching close to S72.0MUSD for newly completed low time models. Average days on the market Ring errs ler Salt IS No Owed (DOM) has now risen to nearly 418 days as many sellers remain unrealistic with their pricing expec- Percent°, of Heel for Selo II 6% No (Sao tations. Current Activity is confined to early model aircraft but even low prices in this segment have Industry Average in November 9.1% K. Chang. failed to lure buyers into the market place. Average ildOeviellUle Veer 1006 Kt thongs INVENTORY STATUS: Inventory had remained in a fairly tight range for most of 2014, averaging Invamoly 'El Sm Months +6 Pi between twelve (12) and seventeen (17) units. Recent reductions in inventory levels due to an unu- Average Days on Morkel 118 sually high number of sales in the early model market have been quickly replenished with new Asimg Pine High Riga: S72,000.000 ?le theropmi aircraft being placed on the market many of which belong to one Chinese operator going through a Ailing Pinelow Range. S25,900,000 tie (hal fleet restructuring. Most changes in inventory have been confined to early models. At the other end Under Canna 0 No Cheri of the market, late models languished due to unrealistic pricing. The lone late model sale in the past Soles in November I tie OA two years was a recently delivered BBJ2 at SI 05.0M. PRICING STATUS: Pricing in the BBJ market hos been weak for most of the past few quarters espe- test Dells 307SI -A Mill re Dote Soles cially in the early model segment where buyers believe values lie near the S22.0MUSD to S25.0M 2113 loot Soles 3 a price mark—while sellers believe values lie further north of those numbers—closer to 530.OMUSD to S33.0MUSD. In the late model market sellers have completely priced themselves out of the mar- ABOUT AVJET CORPORATION ket with many sellers of low time late models requiring prices near or above S60.0MUSD to part with Avjet has been involved io the purchase and sale of Boeing their aircraft. Buyers have completely vacated this end of the market in the past two quarters show- and other large cabin private business jets for more than ing little appetite for late models which are not aggressively priced. The next "green" position from three decades. With over 400 aircraft transactions totaling well over S7 billion in soles, Avjel Corporation sold more Boeing can be purchased with an ask price of S60.0MUSD for a 3rd quarter 2016 delivery date. Over- Boeing business jets than any other antral' sales firm in all pricing will remain weak across the entire model line as buyers hove shown little appetite to the world over the post few years. Even in a recessionary meet seller's price expectations. economy and a challenging aircraft market, Avjet contin- ues to set the pace in Boeing aircraft soles. EFTA01087027 RECENT TRADES: SN YEAR OPTIONS SOLD DATE TIME PAINT INT. 29441 1999 8 TANKS-12 PAX S27.3M 11/2014 5957 2004 2007 34303 2005 PAX SHUTTLE S24.0M 612014 34632 2013 2005 39899 2012 6 TANKS-19 PAX $105.0M 512014 49 2013 2013 (NMI 32775 2003 8-TANKS-19 PAX S30.0M 412014 3524 2003 2003 39095 2012 7-TANKS-19 PAX S52.0M 412014 Del. Time 2012 Green 30328 2000 7-TANKS-19 PAX $34.8M 412014 3350 2000 2000 GLOBAL ECONOMIC OUTLOOK 30752 1999 44 PAX SHUTTLE SI4.8M 112014 41383 2010 2000 The current globol macro environment echoes 30076 1999 TANKS-I9 PAX $35.0M 12/2013 5495 1999 1999 post outlooks since the 2008)2009 financial crisis. Socioeconomic events are mainly negative 28579 1999 6 TANKS-19 PAX $36.75M 10/2013 5925 2008 2008 across most of the globe with the United States being the lone bright spot. Falling unemploy ment, accelerating GOP growth and the prospects UNDER CONTRACT: NONE of a more "pro-business- and -pro•jet' US Con- gress otter November elections take plate has put the emphasis on private jet deals squarely FOR SALE: on US shores as we close out 2014. Europe and Asia remain the question marks os we enter SN YEAR COMPANY NAME ASK PRICE TIME 2015. While Asia has been largely absent from 29273 1998 Piston II 525.914 3743 high activity in the private jet market since 30327 1999 F&L Aviation 538.50M 6891 growth decelerated in 2012, Europe hod stabi- 30751 1999 Legatum 534.0M 5585 lized in 2013 and hopes were high that the Euro• zone hod finally turned the corner entering this 32774 2001 Prime Aviation JSC S35.0M 3719 year. Crisis in the Ukraine with Russia however, 32777 2003 Global Jet Austria (6612) 545.0M 3813 quickly reversed this course as the prospects of 34477 2005 Siva Ltd. 563.0M 1200 Eurozone recession for the third time in six 35990 2006 Samsung Techwin S63.0M 1724 years has now firmly taken shape. With the Euro 36714 2007 Andromeda, Ltd. 558.9M 2788 Tolling 25% against the dollar and the Russian economy being chocked off from Western sans• 36852 2008 Hyundai Corp S63.0M 2105 tions Eurozone GDP is at a standstill as we close 37592 2007 Orex Aviation AVV S72.0M 163 the year out. Unlike the US where several mono• 37700 2009 Agilane Ventures Corporation 549.9M 20 tory policy tools seemed able to twat a races• 38608 2010 Skytrooper Charter 572.0M 133 sion, analyst seem to agree that the some policy tools cannot be employed effectively by the 38633 2010 Deer Jet Company S65.0M 955 European Central Bank (ECB) to reignite growth in 40116 2012 Beijing Capital Airlines Make Offer the Euro Zone. Additionally, China's growth has 40117 2011 HongKong Jet S69.0M 190 considerably slowed in the past twenty four months from double digit growth to the 6-7% range which many analysts believe is actually lower than government figures suggest. Growing concerns over a real estate fueled bubble in China has stalled growth in aircraft soles in 2014. Lastly, two additional factors—radical Islamists in the middle east attempting to take over vast territories in Iraq and Syria fearing further fueling terrorism across the globe—and the outbreak of the Ebolo epidemic in Africa are all conspiring to stall global growth prospects entering into 2015. The two factors which will hart the largest impact on global growth center on how long US GDP con pick up the slack and how long until Chino and Europe recover. Overall soles of private jets will remain constrained in 2015 until the economic growth outlook clears up. EFTA01087028  DECEMBER 2014 4:105WAgir BR) BUYER/SELLER PROFILE 2013/2014 MARKET PROFILE: Charting the profile of buyers and sellers in the 881 market shows the diversity of both parties over the course of the past twenty four months. Geographically, nearly half of all buyers and sellers originated out of Europe and the United States. The next largest block of sellers came from Asian with Russia being the next largest destination for buyers. The break down between types showed an increasing shift toward private ownership as 80% of sellers were private z but at the same time private ownership (buyers) leapt to 60%. The biggest change over the past two years was the lack of activity in the post-2006 model segment with most sales repre- senting pre-2004 models for the first time since production of k the 88.1 began in 1998. >2:e 04, i ii. SELLER PROFILE - —,•...0.10100 5.11.0.0.1dee.e.s9,109, ....el, no,4IA 10% 10% I_ • Private • us • Asia • Corporate O Europe • Government I Africa 80% 40% BUYER PROFILE 20% 30% 10% .is ▪ !Aid ias: • Europe ▪ AfrLca * Russia 10% 30% EFTA01087029