FC January 2022 Registry of Aruba.qxp_FC December 06 22/12/2021 11:56 Page 1
Volume 26 Issue 1 2022
™
ACTIONABLE INTELLIGENCE FOR BUSINESS AVIATION
INSPIRING INSIGHTS FOR A BETTER TOMORROW.
THIS MONTH Jets Comparison: Citation CJ4 Gen2 vs Phenom 300E What’s the Outlook for Aircraft Financing in 2022? Tips When Buying Jets for Part 135 Charter Ops www.AVBUYER.com
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Vol.26 Issue 1
Contents
2022
8
26
Market Indicators
Trends and Observations from Leading Business Aviation Analysts
Market Insights
Interview with Chad Anderson, Jetcraft
32
An Update on the Business Aviation Market, Q4 2021
38
What’s the Outlook for Aircraft Financing in 2022?
44
A Guide to Sustainable Aviation Fuel
50 54 58 62
Sustainability
Buying & Selling Aircraft
Buying a Jet in 2022? Tips to Start the Process Aircraft Export Laws: Owners, Beware!
Finance
Aircraft Finance Lenders: Specialist or Generalist?
Ownership
Is it Worth Chartering Out Your Jet? (Part 2)
66
Tips When Buying Jets for Part 135 Charter Ops
76
Flight Department or Management Company: Which is Best?
81 84 94 98
Aircraft Price Guide Large Jets Values
Jet Comparison
Cessna Citation CJ4 Gen2 vs Embraer Phenom 300E
Flight Department Management
Rats & Hangar Rash: Keep Your BizAv Standards High
Maintenance
Three Tips to Reduce Your Jet Maintenance Costs
Avionics 102 Understanding BizAv Avionics: Cabin Systems Community News 112 OEM News and Industry Appointments 117 Showcases 118 Marketplace 122 Advertisers’ Index 122 Aircraft for Sale Index Next Month •
Pre-Purchase Questions for Buyers (Pt 1): Trip Profile
•
How to Measure BizAv Key Performance Indicators
•
MRO Special Issue
THE BEST AIRCRAFT FOR SALE SEARCH anywhere, everywhere on pc, smartphone and tablet 4 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
EDITORIAL Commissioning Editor Matthew Harris +44 (0) 20 8939 7722 editorial@avbuyer.com Editorial Contributor (USA Office) Dave Higdon dave@avbuyer.com ADVERTISING Steve Champness Publisher Americas +1 770 769 5872 steve@avbuyer.com Lise Margin Account Manager +1 703 818 1024 lise@avbuyer.com David Olcott Account Manager +1 802 233 6458 davo@avbuyer.com Maria Brabec Account Manager EMEA & APAC Aircraft & Services Sales +420 604 224 828 maria@avbuyer.com STUDIO/PRODUCTION Helen Cavalli Mark Williams +44 (0) 20 8939 7726 helen@avbuyer.com mark@avbuyer.com CIRCULATION Sue Brennan +44 (0) 20 8255 4000 Freephone from USA: +1 855 425 7638 sue@avbuyer.com AVBUYER.COM Michas Rapf michas@avbuyer.com Emma Davey emma@avbuyer.com MANAGING DIRECTOR John Brennan +44 (0) 20 8255 4229 john@avbuyer.com USA OFFICE 1210 West 11th Street, Wichita, KS 67203-3517 EUROPEAN OFFICE AvBuyer House, 34A High Street, Thames Ditton, Surrey KT7 0RY, UK +44 (0)20 8255 4000 Freephone from USA: +1 855 425 7638 PRINTED BY Fry Communications, Inc. 800 West Church Road, Mechanicsburg, PA 17055
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EXCLUSIVELY FOR SALE VIP Airliners
BOEING B767-300ER / CALL FOR PRICE
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AIRBUS A319 VIP / MOTIVATED SELLER
2008 (DELIVERED 2011) / SN 3542 ASKING PRICE / USD $39.50M Annual inspection completed Aug 21 at AMAC and landing gear overhauled 2018 Range capability 9-10hrs, aircraft has ACT’s VVIP configuration and managed by Global Jet
AIRBUS A318 ELITE
2010 (DELIVERED 2011) / SN 4211 ASKING PRICE / USD $26.50M VIP configuration with 19 seats Range capability 9hrs, aircraft has ACT’s Interior completion Lufthansa USA and in good condition
3D & Technical details available here
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8,028 Total Time. EASy II Avionics. FANS/1A 2016 Paint, Interior, & 2C Inspection. U.S. Ownership.
2 0 0 9 L e a r 4 5 X R s /n 4 0 3
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4,289 Total Time. Engines on MSP. WAAS/LPV. ADS-B Out. Double Club Configuration For 8 Passengers.
2 0 0 6 C i t a t i o n X L S s /n 6 5 0 X L- 5 6 3 0
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» Hawker 800XPs: Non-airworthy » Legacy 600 » PC-12/47
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Contact us for current market insight on these transactions • Falcon 900EX Acquisition • Citation CJ2+ Acquisition • Legacy 600 Acquisition (x4) • Falcon 2000 Acquisition • Phenom 300 (x2)
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Hawker 800XP (x3) Hawker 800A Challenger 601-3A Citation Encore Falcon 2000 Citation XLS
• • • • • •
Diamond DA62 Acquisition Citation VII Learjet 40XR Learjet 45XR Falcon 50EX Acquisition Challenger 300
• • • • • •
Falcon 2000LX Acquisition Challenger 601-3A/ER Learjet 75 Citation Mustang Citation CJ3 Global 5000
Duncan Aviation has been assisting companies around the world with the sales and acquisition of aircraft for 65 years.
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MARKET INDICATORS
Business Aviation Market Overview As 2022 rolls in, Brian Foley, Editor of Market Intelligence for AvBuyer, sets out how he sees the Business Aviation market shaping up this year…
D
uring the depths of the pandemic in March 2020, it would have been hard to predict that the Business Aviation market would prove so resilient. After a short, but precipitous drop, pre-owned unit sales later went on to set all-time records. While there was some lag time, new aircraft manufacturers have now begun benefitting from the same upswell, reporting brisk business and breaking the decade-old trend of flat, uninspiring sales. Once figures are finalized, 2021 will undoubtedly go down as a truly outstanding year from both a new and used aircraft sales perspective. As a tough act to follow, the next logical question is whether 2022 will be able to deliver similar results.
8 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
External Market Factors in 2022
As a place to start to attempt to answer this, external market factors going into the New Year must be considered, several of which will undoubtedly continue to stimulate both new and pre-owned aircraft transactions. The most obvious driver will be ongoing concerns about the pandemic, which will extend the strong interest to travel privately by those with the means. Manufacturers, brokers and charter/fractional providers have reported that new users of Business Aviation have accounted for upwards of 25% of their recent business volume, whereas previously it had been less than 10%. In addition, the virus has proven that there will continue to be new
variants which will keep this interest alive, and will undoubtedly buoy sales throughout 2022. Unless there’s some catastrophic, unforeseen event, financial markets and economies are expected to continue recovering throughout 2022, giving buyers the confidence to travel privately. Private aviation is a discretionary spend, with the airlines always being the cheaper alternative. But as long as great earnings reports keep coming from corporations and the financial portfolios of individuals keep thriving, customers will continue to pay. High inflation, a term normally associated with negative effects, can actually have a positive effect on our industry. During periods of rising prices, it’s beneficial to own hard assets
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AVBUYER.com
BRIAN FOLEY formed Brian Foley Associates (BRiFO) in 2006 to assist aerospace firms and investors with strategic research. In addition to his work as Market Intelligence Editor, AvBuyer, he is a regular contributor for Forbes.com and his views are published in the media worldwide. Brian serves the Transportation Research Board as a member of the Business Aviation, helicopter, commercial airline and UAV system subcommittees, and he previously served on the Board of a Wall Street financial firm. Before starting his consultancy business, Brian was marketing director at Dassault Falcon Jet for 20 years, and started his career at Boeing. He is an instrument-rated private pilot. https://www.linkedin.com/in/brifo/
that will also appreciate, and nothing’s better than a high-value business aircraft which can help retain wealth as its price goes up. Think of it as a hedge against inflation, with prices of both new and used aircraft rising in lockstep as we have been seeing.
The More Subtle Changes with an Impact
Aside from these factors, there are more subtle changes expected that will affect new and pre-owned aircraft sales differently in 2022. As an example, the pre-owned inventory will inevitably continue to be constrained throughout the year, compared to historical averages. However, it’s believed that the pendulum will begin to swing the other
www.AVBUYER.com
way towards the last half of the year, and inventory will finally begin to increase, as: a) High pre-owned prices motivate more owners to sell; b) Marginal buyers are slowly priced out of the market; and c) More of the recent, unprecedented market demand is met. All of this points to pre-owned aircraft sales not setting another record in 2022, but rather having a more traditional year. Pre-owned aircraft sales have been improving over the past several years, whereas new aircraft sales stubbornly remained stagnant. It’s believed that this cycle will finally shift in the OEM’s favor with higher sales volumes throughout 2022 and beyond. The same inventory shortage that is
challenging the pre-owned aircraft market will next be seen in the new market as demand outstrips supply. As new aircraft delivery dates extend beyond 18 months we could again see delivery slots being sold at multi-milliondollar premiums, a phenomenon not seen since 2008.
2022: Continuing the New Paradigm
Barring any unpleasant surprises, 2022 is anticipated to be another decent year for pre-owned aircraft sales, and an exceptional, long overdue period for new aircraft sales. Overall, Business Aviation has entered a new paradigm in the size of its addressable market that will continue to benefit all players throughout the year. MI www.brifo.com
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AVBUYER MAGAZINE Vol 26 Issue 1 2022
9
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File Picture
+41 22 787 08 77 / +1 301 525 4380 / +65 6221 0989
2007 BOEING 737-700 BBJ OFF-MARKET 3’500 Total Hours, VIP Bedroom & Lavatory, 15 Passengers
0DNH 2σHU
File Picture
TRADING.GENEVA@SPARFELL.AERO TRADING.USA@SPARFELL.AERO TRADING.SINGAPORE@SPARFELL.AERO WWW.SPARFELL.AERO CHARTER MANAGEMENT SALES & ACQUISITIONS LEASING DESIGN
File Picture
2002 BOEING 737-700 BBJ OFF-MARKET 8’500 Total Hours, VIP Bedroom & Lavatory, 18 Passengers
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2015 PHENOM 300 OFF-MARKET 3’000 Total Hours, EASA, On JSSI and EEC standard
0DNH 2σHU
File Picture
2012 GULFSTREAM G550 S/N 5349
3’100 Total Hours, 1’250 Total Cycles, US-Based, Engines, Airframe & APU on Programs, 16 Passengers
$VN 3ULFH
CITATION X OFF-MARKET 8’500 Total Hours, Winglets Engines on Program, HAPP
0DNH 2σHU
File Picture
2006 CITATION XLS OFF-MARKET 6’200 Total Hours, EASA, On JSSI and ProParts
0DNH 2σHU
2007 HAWKER 400XP S/N 501
4’800 Total Hours, VMAX Engine Program, ADSB, EASA, Fresh A/B/C/D Inspections
0DNH 2σHU
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CHARTER
MANAGEMENT
SALES &ACQUISITIONS
2007 $*867$ $ ( 32:(5 OFF-MARKET
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%(// S/N 8592
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3’750 Total Hours, 5’500 Total Cycles, EASA, Floats Equipped, Recent Paint and Interior
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2014 CHALLENGER 605 S/N 5966
CITATION ULTRA S/N 280
DEAL PENDING
DEAL PENDING
0DNH 2σHU
3’000 TT, EASA, SmartParts, Engines GE OnPoint, APU MSP Gold, One owner since new, 12 Passengers
'HDO 3HQGLQJ
2014 CITATION CJ4 OFF-MARKET
3’400 TT, ADS-B Out v2, T-CAS 7.1, Airframe & Engines on Programs,EASA, 9 Pax, WAAS, LPV, One Owner since New
'HDO 3HQGLQJ
0DNH 2σHU
8’618 Total Hours, EASA, WAAS/LPV, ADS-B Out
'HDO 3HQGLQJ
2013 PC12NG S/N 1349
4’342 Total Hours, ESP Gold, 8 Pax Interior, Large Cargo Door, Cabin Fresh Air and Filtration System
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MARKET INDICATORS
AVBUYER.com
Global Flight Activity Update November 2021 was comfortably the busiest November on record for global business jet activity, says WingX Advance. A total 447,000 sectors were operated, which was 15% busier than November 2019, and only 30,000 sectors shy of October’s activity (the busiest month on record)... Demand for Business Aviation continues to be boosted by the erosion in commercial aviation flying, with airline traffic still trailing 28% behind October 2019 levels. Business jet flight hours were up 19% compared to October 2019, which ultimately highlights a rebound in larger cabin aircraft and longer trip sectors.
Europe
October saw an extraordinary growth in Business Aviation activity compared with previous years. With over 75,000 sectors flown on business jets and turboprops, flight activity in Europe was 28% higher than in October 2019. Until September, UK business jet traffic was well behind 2019 levels, but in October flight departures were up 18% on October 2019, elevating it as the second busiest market in Europe for the month. France was the busiest, with business jet sectors rocketing 23% above normal. The most eye-catching growth in 12 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
October came in Italy, Spain, Switzerland (42%, 52% and 39%, respectively, more active than in October 2019).
United States
October Business Aviation activity in the US, including turboprops, was up 2% on the same month in 2019. For just business jets, it was up 5%. That trend will surely extend to ensure a record total for 2021. Charter and Fractional operators are driving much of the growth in the US, with fleet activity 30% up on October 2019. Meanwhile, Super Midsize Jets accounted for over 20% of all the US traffic in October, with the number of sectors 26% higher than recorded in October 2019. Teterboro, Boston and Dulles were three of the only airports which did not have more traffic in October 2021 than in October 2019. Much of the deficit was in international flights, with transatlantic business jet connections from the US running 32% behind 2019 Year-to-Date.
Rest of the World
Outside the US and Europe, business jet demand stuttered as Q4 began. Having been well ahead of 2019 trends in the Spring and Summer,
sectors flown were up just 4% in October. • •
• •
•
Recoveries in Canada and Mexico appeared to stall, with sectors still 20% below normal. Business jet sectors in China were slightly up on 2019, though down on October 2020 (flight hours were well below two years ago). Business jet activity in Australia fell below 2019 levels. Flight activity in Saudi Arabia had yet to fully recover since 2020. (By contrast, business jet activity in Qatar and the UAE was well above that recorded in October 2019.) Several countries in Africa have been seeing strong growth in business jet activity throughout 2021, and this trend continued in October; notably so in South Africa and Nigeria.
“Business jet activity continues to grow well into the winter period in the US and Europe, which is a strong endorsement of sustained demand,” summarized Richard Koe, Managing Director, WingX. “The opening up of transatlantic connections should boost activity further.” MI www.wingx-advance.com
page 16
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Hatt & Associates January.qxp_Layout 1 24/12/2021 09:32 Page 1
2018 Gulfstream G280 S/N: 2140. Reg: C-GFZG • Asking Price: Make Offer • 1,700.6 hours since new • Planeview280 Cockpit
• FANS 1A / CPDLC / ADS-B Out V2 Display (HUD III) / E, •F,Head and Up G Insp. Completed Enhanced Vision System (EVS) Aero in September2016 by Standard • Synthetic Vision - PrimaryinFlight Teflon Coating completed 2017 Display (SV-PFD)
Unique in Experience, Global in Scope. 2008 Hawker 4000 S/N: RC-11. Reg: N1119K • Asking Price: Make Offer • 5,600 hours since new • Engines enrolled on ESP Gold • Next Gen Avionics ADSB-Out, TCAS 7.1 • ATG-5000 High Speed Internet • Painted April 2018
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MARKET INDICATORS
AVBUYER.com
Jetcraft: 12,261 Pre-Owned Transactions By 2025 Jetcraft released its 5-Year PreOwned Business Aviation Market Forecast predicting pre-owned aircraft transaction volume and value will maintain their current healthy growth rates... According to Jetcraft’s forecast, the market is projected to reach 2,647 transactions, valued at $12.4bn annually, by 2025. “Since the pandemic, the true benefits of Business Aviation have been realized, particularly by new entrants who have had the means to fly privately but never previously had the inclination, and we have seen our industry thrive,” said Jahid Fazal-Karim, Owner and Chairman of the Board at Jetcraft. “The combination of limited commercial airline services, plus expanding offerings within Business Aviation, presents the sector with a real opportunity to further broaden its customer base and secure long16 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
term prosperity, and we have highlighted some of these areas in our forecast,” he added.
Factors Behind the Growth
Jetcraft is predicting the industry will maintain its post-pandemic momentum and expects to see 12,261 pre-owned transactions worth $57.2bn in value over the next five years. “Manufacturer backlogs and wait times for new aircraft are rising,” Fazal-Karim continued. “This factor, paired with a growing buyer pool, means many will be compelled to turn to pre-owned aircraft to meet their needs. “Our forecast finds that regional drivers, such as Wealth Levels and Flying Hours, represent the main reasons behind ownership in North America, Asia-Pacific and Europe, and these continents also retain the highest UHNWI populations.
“So, with the projected growth in wealth converging with increased use in business jet solutions, we expect to see the road to ownership accelerate among many users, which is an exciting prospect.” The current market strength is predicted to last until late 2022, with average transaction value set to grow marginally until 2024, partly due to an increase in Large Jet sales which command higher prices. Depreciation rates are expected to return to normal by 2025. “The evolution of Business Aviation post-pandemic is a demonstration of the industry’s resilience and growing appeal,” Fazal-Karim concluded. MI www.jetcraft.com/marketforecast-2021, and read AvBuyer’s interview with Chad Anderson, President of Jetcraft on p26
page 20
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Elliott Jets January.qxp_Layout 1 21/12/2021 11:38 Page 1
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MARKET INDICATORS
AVBUYER.com
Table A
In-Service Aircraft Maintenance Condition & Marketability
Fleet Maintenance Condition $ Million $1.55 5.40
November’s pre-owned business jet and turboprop sales evidenced the second highest number of monthly trades for the 134 models tracked by Asset Insight… Inventory assets decreased 5.6% (107 units) during the month, representing a 47% reduction Year-to-Date (YTD), or 902 fewer units. The 1,010 assets listed for sale also represent a 52.2% decrease, year-over-year (YoY). A lack of young, low-time aircraft has certainly not dampened buyer enthusiasm. Indeed, aging aircraft sellers hope to benefit from the market’s activity – however unlikely that might actually be.
Aircraft Values
The average Ask Price for our tracked, listed fleet rose 0.6% during the month, but was still 0.3% lower YTD and 4.9% below last year’s figure. The minimal increase might appear to be counterintuitive, until you consider the average age of the limited assets listed for sale. What are often termed “off-market aircraft” (aircraft not listed for sale but whose owners are willing to part with the asset at some price) are actively selling, and many are generating prices above their Ask Price, as buyers compete for the few opportunities to purchase a higher-quality aircraft before year-end. Bonus depreciation is also fueling US-based buyers’ interest, although that is mostly a secondary motivator.
Inventory Fleet Maintenance Condition
Considering how much the listed fleet has been picked over, November’s Quality Rating decrease was not surprising, while the Maintenance Exposure decrease was unexpected. • Quality Rating decreased 0.2% from October’s 5.200 to 5.187. The latest Rating represents the second consecutive 12-month low, along with a YoY decrease of 3.4%. The Rating remained within ‘Very Good’ territory, but buyers should take note that most listed aircraft are approaching more near-term maintenance events. • On the heels of last month’s 1.5% improvement, the listed fleet’s Maintenance Exposure (an aircraft’s accumulated/embedded maintenance expense) decreased (improved) an additional 2.6%, signifying maintenance events for the current inventory mix will cost less to complete. Additionally, that expense will be 1.6% lower than one year ago.
Maintenance Exposure to Ask Price (ETP) Ratio
November’s ETP Ratio recorded a second consecutive monthly improvement (decrease) at 75.8%, following September’s record high (worst) 78%. While this development likely pleased some sellers, the Ratio was worse (higher) than average. The market analysis also revealed that nearly 55% of November’s tracked models, and nearly 60% of Asset Insight’s tracked fleet, posted an ETP Ratio greater than 40%. 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’ (DoM) 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%. During Q3 2021, assets whose ETP Ratio was 40% or higher were listed for sale more than 84% longer, on average, than aircraft whose Ratio was below 40% (296 versus 545 Days on Market).
Market Summary
At 4.6%, availability for Asset Insight’s tracked fleet has never been lower, and inventory units decreased for all four aircraft groups during November. By way of comparison, inventory rested at 10.1% of the
20 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
$1.50 $1.43
5.30 5.187
5.20
$1.45 $1.40 $1.35
5.10
$1.30 D
J
F
Quality Rating
M
A
M
J
J
Maintenance Exposure
A
S
O
N
Quality Rating Trendline
Table B G500 2.8% Citation CJ3+ 3.9% G650ER 4.5% G280 7.8% Global 6000 8.1% F7X 8.9% Citation CJ4 525C 9.2% Phenom 300 12.7% Citation CJ3 13.2% F900EX EASy 13.5% Boeing BBJ 14.3% Legacy 650 14.8% King Air 350i 15.7% Pilatus PC-12 18.8% Piper Meridian 19.0% G150 19.5% Citation Encore + 19.7% Citation Sovereign 680 21.0% Caravan 208-675 21.3% F900EX 21.3% Citation CJ2+ 525A 22.7% TBM 850 24.5% G550 27.4% Piaggio P-180 II 28.0% King Air 350 - Post-2000 29.0% Citation Mustang 510 30.9% King Air B200 - Post 200031.0% GV 31.4% Global XRS 33.2% Caravan Grand 208B 35.5% Citation Encore 37.1% Phenom 100 38.1% Embraer Legacy 600 38.4% Hawker 850XP 38.7% King Air 300 38.7% Hawker 400XP 39.1% Hawker 4000 39.2%
Learjet 40 40.0% King Air 350 - Pre-2001 40.1% Citation X (MSG3) 40.3% Citation CJ2 40.9% Global 5000 42.4% Citation V Ultra 43.7% CL-604 44.3% Global Express 44.7% King Air B200 - Pre-200145.6% Citation Excel 560XL 56.3% Premier 1A 57.3% Citation CJ1 57.5% Hawker 800XP 58.4% F2000 60.5% F20-5 61.4% TBM 700A 64.1% Hawker Beechjet 400A 67.7% GIV-SP (MSG3) 71.9% Citation VII 73.2% Citation V 560 74.4% Citation Ultra 80.1% Hawker Beechjet 400 82.1% GIV-SP 92.3% Premier 1 95.9% Learjet 60 96.2% F50 98.7% King Air C90 102.5% Hawker 1000A 103.7% GIV 104.2% Learjet 31A 107.8% Piaggio P-180 108.8% Citation VI 116.9% G100 117.6% Hawker 800A 129.4% Citation ISP 135.4% Citation II 143.6% CL-601-3A 147.0% Learjet 55 162.3% Citation III 164.4% Learjet 31 198.5% Learjet 35A 222.1% Citation Bravo 237.3% Hawker 125-700A 283.0% GIII 337.1% CL-601-1A 346.4%
Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) as of November 30 2021
page 22
Source: JETNET (www.jetnet.com) Asset Insight, LLC (www.assetinsight.com)
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MarketIndicators.qxp_Layout 1 21/12/2021 10:51 Page 6
MARKET INDICATORS
Large Jets
Mid-Size Jets
Ask Price vs. Maintenance Exposure
Ask Price vs. Maintenance Exposure
$ Millions
$1.27 $1.26
$3.00 $2.50
$1.24
$2.71 Oct-21
Nov-21
Sep-21
Aug-21
Jul-21
Jun-21
Apr-21
May-21
$1.22 Mar-21
$2.00 Dec-20
Oct-21
Nov-21
Sep-21
Aug-21
Jul-21
Jun-21
Apr-21
May-21
Feb-21
Mar-21
Jan-21
Dec-20
$13.96
$1.28
$3.50
Jan-21
$3.60 $3.50 $3.40 $3.30 $3.20 $3.10 $3.00
$3.55
Feb-21
$15.0 $14.0 $13.0 $12.0 $11.0 $10.0 $9.0
$ Millions
Asset Quality Rating
Asset Quality Rating
Scale -2.500 to 10.000
Scale -2.500 to 10.000
5.700 5.400
5.600
5.553
5.300 5.200
5.108
5.500 5.100 5.400
active fleet at the same time in 2020. With new aircraft delivery slots not available for up to 24 months on certain models, many prospective buyers will continue to utilize charter services while awaiting delivery of their asset, maintaining charter’s strong demand for some time to come. While this represents revenue for aircraft owners, it also increases their aircraft’s utilization and is likely to negatively reflect on their asset’s value at time of sale. Large Jets: With listings dropping 11.8% during November (another 30 units), availability for Asset Insight’s tracked 43 models has now decreased 48% YTD (207 units) and 54.7% YoY, and the group’s availability now equates to just 4% of the active fleet. The Quality Rating improved (rose) 2% to 5.553, as buyers opted for lower-rated assets (presumably in exchange for lower pricing), raising the group’s Rating into ‘Outstanding’ territory, although the figure was 3.9% lower (worse) than this time last year. While fewer in number, Maintenance Exposure identified a 9.3% increase in the cost to complete upcoming maintenance events (the highest cost posted during the past 12 months), a figure that is also 18.2% higher YoY. Ask Prices reflected the listed fleet’s highly limited availability, increasing 17.2% (a 12-month high figure), and were up 19.2% YTD, and 20.2% YoY. Lastly, the large Ask Price increase positively impacted the group’s ETP Ratio, reducing it to a 12-month low 58.9%. Lowering the price paid for an asset is important, but equally important is completing a thorough pre-purchase inspection, a crucial event that a surprising number of buyers are currently willing to forego in an effort to secure some aircraft.
22 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Mar-21
Feb-21
Jan-21
Dec-20
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Mar-21
Feb-21
Jan-21
Dec-20
5.000
Mid-Size Jets: A decrease of 41 units to our tracked 45-model grouping lowered availability to 5.6% of the active fleet and equated to a 7.9% inventory decrease for the month, 50.5%, YTD, and 55.8% YoY. With buyers focusing on higher quality assets, the group’s Quality Rating tumbled 3.5% to a 12-month low 5.108 (4.4% lower, YoY), but still managed to maintain Mid-Size Jets within the ‘Very Good’ range. Maintenance Exposure worsened/increased by 2.1% (0.5% higher YoY) to a figure worse/higher than the 12-month average. Ask Price followed suit, decreasing a substantive 16.1%, lowering the group’s prices 12.9% YTD, and 20.3% YoY. Unsurprisingly, the ETP Ratio increased to 79.3%, a 12-month worst figure. Even though demand is quite apparent for Mid-Size Jets, we continue to be surprised by the high number of transactions in view of the limited availability. Light Jets: Ample transactions during November reduced the inventory of 29 tracked Light Jet models to 4.3% of the active fleet. Availability decreased by an additional 14 assets, equating to 3.8% for the month, 48.6% YTD, and 52% YoY. Buyers apparently preferred lower-priced units carrying more upcoming maintenance events, helping worsen the Quality Rating by 0.3% for the month, and 2% YoY. On the plus-side, maintenance events are also going to be less expensive, as the remaining inventory’s Maintenance Exposure decreased 0.4% for November (a second consecutive 12-month low figure) and 7.4%, YoY. Lastly, Ask Price rose 7.3% as we closed November, leaving pricing down 12.4% YTD, and 13.8% YoY. The net effect on the ETP Ratio was a reduction to 112.7% that, while justifiably concerning for sellers, represented an improvement from October’s record-high 121.7%.
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MarketIndicators.qxp_Layout 1 21/12/2021 10:53 Page 7
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Light Jets
Turboprops
Ask Price vs. Maintenance Exposure
Ask Price vs. Maintenance Exposure $ Millions
$ Millions
$1.80 $1.70
$1.70
$1.00
$0.95
$0.60
$1.75
$1.10
$0.55 $0.55
$1.65 $0.90
Oct-21
Sep-21
Jul-21
Aug-21
Jun-21
May-21
Apr-21
Mar-21
$0.45 Dec-20
Oct-21
Nov-21
Sep-21
Jul-21
Aug-21
Jun-21
May-21
Apr-21
Mar-21
Jan-21
Feb-21
Dec-20
$1.60
$1.55
$0.80
$1.40
$0.50
$1.60
$1.50
Jan-21
$1.54
Feb-21
$1.60
Nov-21
$1.90
Asset Quality Rating
Asset Quality Rating
Scale -2.500 to 10.000
Scale -2.500 to 10.000
5.300 5.200
5.200
5.112 5.100 5.100
5.074 5.000
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Mar-21
Outstanding Excellent 5.500 5.250 or to Greater 5.499
Very Good 5.000 to 5.249
Good 4.750 to 4.999
Below Average Average 4.500 Less to than 4.749 4.500
Translation: Sellers of the tracked Turboprop models have ample opportunities to negotiate value-based transactions, especially when you consider that only 4.3% of the active fleet is listed for sale.
MI www.assetinsight.com ❙
TONY KIOUSSIS is President & CEO of Asset Insight, providing valuations, audits, analytics and consulting services, and a uniform methodology for grading an aircraft’s maintenance condition. Previously he worked with GE Capital’s Corporate Aircraft Finance group; Jet Aviation; and JSSI, developing the “Tip-to-Tail” airframe maintenance program. https://www.linkedin.com/in/tony-kioussis-a366b28/
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Feb-21
Dec-20
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Mar-21
Feb-21
Jan-21
Dec-20
Nov-21
Asset Quality Rating Key
Whether the current group of sellers can realize the prices they are seeking is questionable, considering the high number of Days on the Market many Light Jets have accumulated. Turboprops: Sporting the second-best rating in terms of asset quality, Asset Insight’s 17-model tracked Turboprop fleet’s inventory was 5.4% lower (22 units), and is now down 40% YTD, and 44.5% YoY. The last time Turboprops posted such a high Quality Rating was back in July 2021, and, although November’s figure was lower than the group’s 12-month average, 5.112 was an improvement of 2.7% over October’s 12-month low figure (albeit also 1.9% lower than this time in 2020). It was also sufficient to elevate the group back into the ‘Very Good’ range. Maintenance Exposure improved 5.5% for the month, but that was still 5.3% worse (higher) YoY. Ask Price decreased 1.9% (leaving it up 0.3% YTD, and 0.3% lower YoY), and higher than the average Ask Price for Light Jets during eight of the last nine months. The best news is the group’s ETP Ratio. It has floated above and below the 40% ‘excessive exposure’ demarcation point during the past twelve months, improving to 42.1% in November – not that October’s 44.1% Ratio was concerning for most sellers.
Jan-21
4.900
5.000
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AVBUYER MAGAZINE Vol 26 Issue 1 2022
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Market Insights 1.qxp_MARKET INSIGHTS 21/12/2021 09:52 Page 1
MARKET INSIGHTS
Market Insights: Chad Anderson, Jetcraft What are the latest trends and indicators of note in the business aircraft sales marketplace? AvBuyer’s Matt Harris spoke with Chad Anderson at Jetcraft to ask for his market perspectives…
J
etcraft has been in Business Aviation for 60 years, and, during that time, has grown to offer highly astute market research capabilities, plus expertise in aircraft sales, marketing, and deal management – all the tools today’s aircraft buyers and sellers need to ensure a smooth transaction. So it’s unsurprising to hear that in 2021 Jetcraft capitalized on a lightning-quick market, exceeding the previous year’s transaction count, putting it on track for a record year, according to Chad Anderson, President of the company. “With demand at its highest level, low inventory levels present a challenge, with just 3.2% of business jets and turboprops currently available, according to AMSTAT,” he told AvBuyer as he joined us for an interview. “However, we’re managing to overcome this by leveraging our global structure.” The Jetcraft team has experts stationed in more than 20 offices worldwide; a fact that Anderson says gives it
26 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
the ability to provide timely market intelligence in every critical locale. “By drawing on our strong relationships, we also have the ability to source aircraft globally, moving high-quality inventory around the world to make acquisitions possible,” Anderson adds. Aviation has always played an important part in Mr. Anderson’s personal and professional life. “After graduating from the University of North Dakota in Aviation Administration, I worked as an aviation underwriter before joining Bank of America as the National Asset Manager and Business Development Officer in the corporate aircraft finance division,” he shares. “Earlier in my career, I also gained my commercial pilot license, and I take great pleasure flying when I can.” Anderson joined Jetcraft in 2005. “In my current role as President, I lead the company’s overall global operations and strategy,” he explains, as he offered his insights with AvBuyer on the current aircraft sales landscape…
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Market Insights 1.qxp_MARKET INSIGHTS 22/12/2021 09:44 Page 2
AVBUYER.com
AvBuyer: Chad, tell us about the pre-owned business aircraft market in 2021 from Jetcraft’s perspective… Was it a good or bad year, or a little bit of both? CA: 2021 has been an exciting year for Business Aviation, and our industry has proven its resilience during the pandemic. Private flying regained momentum much quicker than commercial aviation, demonstrating both its health benefits and capability to support travel during drastic cuts to airline schedules. As a result, the industry has been inundated with new users. Demand for Business Aviation solutions continues to grow, and with aircraft owners often beginning their journey through air charter, fractional ownership and jet cards, this trend bodes well for the future health of our industry. We’re continuing to see strong levels of demand for pre-owned aircraft, and expect the post-pandemic momentum to carry on into 2022 and beyond.
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AvBuyer: As a result of sales activity post-Covid, preowned business jet and turboprop inventory levels have dropped to record lows. How do you expect sales activity to unfold in 2022 because of this? Is there any near-term, or medium-term, prospect of market replenishment? CA: In keeping with the strong levels of demand our industry is experiencing, Jetcraft’s 2021 Five-Year PreOwned Business Aviation Market Forecast, expects sales activity to remain high, with average volume and values maintaining their current healthy growth rates into 2022 and beyond. We also forecast 2,355 pre-owned transactions in 2022, the highest number in recent years. OEMs are facing backlogs, and wait times are now around 18-20 months for [customers to receive their] new business jets. We believe this will lead to an increase in the number of first-time buyers turning to the pre-owned market, so they
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Market Insights 1.qxp_MARKET INSIGHTS 22/12/2021 09:45 Page 3
MARKET INSIGHTS
AVBUYER.com
“While inventory levels are at record lows, in this environment we still strongly believe that buyers can find an aircraft at the right price, and so there is no reason to halt an acquisition.”
can purchase a Business Aviation solution quicker. Although the market remains competitive, there are still options available in the near-term. Moreover, with greater volume discipline from manufacturers, we predict aircraft values will remain stable. AvBuyer: We’ve seen various comments lately that, with a limited number of suitable aircraft for sale, some buyers may hold off making their purchases at this time. Could this mean much pent-up demand for pre-owned aircraft sales once the market begins to be replenished with newer inventory again? CA: While inventory levels are at record lows, in this environment we still strongly believe that buyers can find an aircraft at the right price, and so there is no reason to halt an acquisition. Even with pent-up demand, the Business Aviation industry is operating in a rational market, reflected by the stable prices seen for pre-owned jets. For example, current prices for pre-owned aircraft models have depreciated by 57%, on average, from their new list price, as should be expected in a healthy market. As new aircraft models roll off the production line from 2022 onwards, we expect pre-owned sales to benefit, offering greater choice as current owners opt to upgrade.
28 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
AvBuyer: What else would you predict for the year ahead in the pre-owned market, and why? CA: First, we predict that rising average transaction value is going to be led by buyers purchasing a greater number of Large Jets, which command a higher price. This is particularly the case as international borders open post-pandemic, increasing the opportunity for long-range journeys. Second, we expect to see the journey to aircraft ownership accelerating. This is driven by reduced [scheduled airline] services and the predicted increase in the wealth-rate among High Net Worth Individuals (HNWIs), which provides a greater incentive for current Business Aviation users to move towards owning their own jet. Our third prediction focuses on the shifting regional levels of ownership we’re expecting to see in the next five years. In Business Aviation’s largest market, North America, some 4% of its 112k estimated UHNWI population are business aircraft owners. In the next largest markets of Asia-Pacific and Europe, owners make up only 1% and 2% of the UHNWI population. We forecast the gap in ownership between these two markets and the US will narrow.
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Market Insights 1.qxp_MARKET INSIGHTS 22/12/2021 11:32 Page 4
MARKET INSIGHTS
AVBUYER.com
Pre-Owned Transaction Volume and Values Outlook, Per Jetcraft's 2021 Five-Year Forecast. PRE-OWNED TRANSACTION VOLUME
PRE-OWNED TRANSACTION VALUE
AvBuyer: Which markets are catching your eye currently, and why is this? CA: The Large Jet segment is an interesting category to watch right now, due to the growing levels of interest in long-range travel. Post-pandemic, aircraft owners are seeking to reaffirm global business relationships and reconnect with their contacts across the world. To do so, they need aircraft that can carry out longer flights without multiple stops enroute. The major manufacturers are investing in their Ultra-Long-Range Jet programs, so it’s an exciting category with lots of potential. We’re seeing heightened interest in Bombardier’s Global 7500, Gulfstream’s new G700, and Dassault’s Falcon 10X model, which is set to make its debut in 2025. AvBuyer: How would you advise buyers and sellers to approach the market at the start of 2022 to extract maximum value from their purchase or sale? CA: Although tightening supply is creating challenges for buyers, there is still quality inventory available, especially for those willing to act quickly and consider aircraft from foreign markets. In this competitive environment, it is even more important to have the right team on hand to support your transaction. My advice to sellers is that current market conditions make this a great time to list your aircraft. The reduced supply is creating a window of opportunity to sell or upgrade, and prices are holding well across the new and pre-owned markets. More information from www.jetcraft.com T
MATT HARRIS is commissioning editor for AvBuyer. HeBOMBARDIER is an experienced General 300 CHALLENGER and Business Aviation journalist and has edited a variety of titles across the last two decades. These include AvBuyer, BizJet Advisor and GA Buyer Europe. https://www.linkedin.com/in/matthew-harris-avbuyer/
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Market Insights 2.qxp_MARKET INSIGHTS 21/12/2021 10:09 Page 1
MARKET INSIGHTS
An Update on the Business Aviation Market, Q4 2021 How was the used business aircraft sales market performing as we moved towards 2022? What factors were impacting jet and turboprop values? Jason Zilberbrand, President and Chief Technical Officer at VREF shares some insights…
W
hat a difference a year makes! The doom and gloom within the pre-owned aircraft sales market just over a year ago is almost hard to believe. Here’s the latest market report as Q4 2021 got under way. While there are still many unknowns in terms of the global supply chain, inflation, interest rates, and another winter of pandemic, the one thing we can say for sure is that General Aviation is back, as evidenced by recent used aircraft sales activity. There was a time when that wasn’t even a thought. Cheap airline tickets, and service to every part of the world made it easy to forget how critical General Aviation is to the economy. Today, however, the erratic behavior of passengers on commercial flights has been problematic, leading to a number of aborted flights. Attacks on airline employees and fellow passengers have made the headlines. As if the airlines needed any more issues to deal with, they also face labor problems, pilot shortages and vaccination mandates. These issues have helped propel private air travel, giving it a
32 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
prominent place in today’s economy. Many former airline passengers have experienced the benefits of Business Aviation and made a permanent shift, and they are unlikely to ever return to the airlines. This is all good news for General Aviation, and especially for Business Aviation. The transactions reported in Q3 2021 comprised an interesting mix of first-time buyers and management companies seeking to add aircraft to their already busy, stressed fleets. Several of these large operators are turning business away, simply unable to support any additional growth for the time being. Q4 is traditionally a hectic time of year for those in aviation. In normalized markets, the time between Thanksgiving and Christmas is the busiest period, and it’s not uncommon to see two- to three-times the number of aircraft valuations coming through VREF’s software. This, however, is not a regular market… It appears ‘normal’ may be a thing of the past as the global economy shifts from pandemic towards recovery. Or maybe the economy is just dealing with the fact that the virus may be here for the longer-term.
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Market Insights 2.qxp_MARKET INSIGHTS 21/12/2021 10:11 Page 2
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What’s Influencing Activity?
The current market is not only one of the tightest we’ve seen during almost thirty years working in the industry, but also one that doesn’t seem to be tied to any single aspect of the economy. Many factors influence the activity levels – and the associated values today – and these are enough to make one’s head spin. Some of the factors seem obvious, yet are rarely written or spoken about in detail. For example, the number of aircraft being removed from service due to expensive maintenance (or lack thereof), accidents, or simple technical or functional obsolescence, is hard to take in. There has been a growing number of days over the past 12-18 months that I have needed both hands to count the number of aircraft being removed from service. Though this might not seem like a massive problem, it has snuck up and is demanding attention. It could have been mitigated had we not lost so many productive years after the Great Recession. This “lost decade” found its way into every R&D budget, and just about every manufacturer felt
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the burn at one point or another. Fast-forward into today’s market, and the hope of offsetting the attrition rate with new aircraft deliveries is just that: ‘Hopeful’. While there will always be a segment of jet buyers who desire, and have the financial ability to buy a new aircraft, this will never be the majority. For most, the value proposition and mission profile analysis are always at the mercy of a budget, driving the majority of buyers to the used jet market. Thus, there will always be solid demand for older private jets and turboprops, until we see a technology-driven shift with alternative fuel or powerplants that force permanent change. We also take for granted the fact that the Great Recession knocked down values to well below what was justified. For the most part, those same models that were so heavily impacted are only now starting to see a plateau in their deprecation. In some, rare, cases there is evidence some are seeing some appreciation (a word not used in the pre-owned airplane market since 2008).
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Market Insights 2.qxp_MARKET INSIGHTS 21/12/2021 10:13 Page 3
MARKET INSIGHTS
AVBUYER.com
“A buyer choosing to pounce on ‘the aircraft of their dreams’ in the current market, ignoring issues that would not usually be overlooked, may find they create an expensive nightmare for themselves when the market cools.” The Hazard of Hurry
The size of the fleet, combined with the number of pre-owned aircraft available for sale, is something appraisers use daily as a measuring stick. It’s something VREF has been tracking offline for many years, and there is a direct correlation between the size of the fleet, the number of aircraft for sale, an aircraft make and model’s popularity, and value. The more desirable an aircraft model is, along with its specific features and avionics, the longer, and potentially more frustrating the wait becomes for buyers as their chances of finding one are reduced to slim-to-none. The scarcity of pre-owned aircraft inventory in this current market has, for obvious reasons, had a direct impact on values and the amount of money a buyer is willing to pay. It has also created an environment that can trip first-time buyers and even seasoned aircraft purchasers up. The ‘hurry-up’ mind-set, along with the low availability of good quality aircraft, is often a recipe for disaster. We have noticed a hard-to-believe trend in the current market in which buyers are prepared to 34 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
overlook logbook issues, missing records, damage history, and uncertain back-to-birth traceability in used aircraft for sale. The question that needs to be asked is, “what if the market changes, and is no longer hot?” Buyers must consider this question before deciding whether a transaction makes sense. A buyer choosing to pounce on ‘the aircraft of their dreams’ in the current market, ignoring issues that would not usually be overlooked, may find they create an expensive nightmare for themselves when the market cools. While there is no promise the next aircraft that matches the need will be better, when it becomes available, patience remains a virtue in today’s marketplace.
Market Trend Report
During Q3 2021, VREF subscribers generated, on average, 20,000 valuation reports every 30 days – up 7% from Q2 2021. The market supply is tight across the board, although some of the market activity has led to more aircraft availability in certain markets.
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Market Insights 2.qxp_MARKET INSIGHTS 21/12/2021 10:14 Page 4
MARKET INSIGHTS
AVBUYER.com
News from VREF While there is no crystal ball at VREF, we do have a lot of data, and we can see that not a whole lot has changed lately. If anything, the market has tightened for certain classes of aircraft. The number of available aircraft has generally continued to drop across the board, with some exceptions. Following are some market highlights at the time of writing… •
•
•
In the single-engine piston market, later model Cirrus SR22s, Cessna 182s (all variants), and Piper Cherokee 180s saw an increase in inventory availability, but values continued to increase. The Light and Mid-Size Jet markets have remained active, and a steady stream of transactions continue to be reported across all popular models. The Large Jets have done remarkably well, with demand increasing month-over-month during Q3.
It is also worth noting that many service centers report long waiting periods, and in some cases are quoting well into 2022 for availability. Be careful when trying to schedule pre-buy inspections, and always schedule maintenance as far in advance as possible, especially with supply chains continuing to be strained. VREF’s Q4 values, updated at the end of November 2021, forecast little market change in the coming months. VREF expects the current market to stay the course for the foreseeable future, with a number of Q4 transactions carrying over into Q1 2022. More information from https://vref.com T 36 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
For the first time in many years, VREF has published a mid-quarter price update. “It is essential for all of our subscribers that we maintain accuracy, especially in a heated market like the one we have today,” Jason Zilberbrand explained. “We will also soon release several new features and improvements to our software. We believe the new data will be well received, and will enable users to see the ebb-and-flow of aircraft transactions like never before,” he added. “Another feature that I’m personally excited about is VREF’s stand-alone engine database, and engine conversions which are almost ready for deployment. As part of the update, users will be able to adjust the TBO on specific engines.” JASON ZILBERBRAND Jason Zilberbrand is the President of VREF. He is an Accredited Senior Aircraft Appraiser with the American Society of Appraisers (ASA), and an Accredited Member of the Appraisers National Association (ANA), and he is also an Accredited Member of the International Society of Appraisers (ISA). He is an expert witness, broker, inventorying dealer, acquisition agent, aircraft owner, aircraft operator, contract negotiator, consultant, teacher, conference speaker, and author.
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Jet HQ inventory FP January.qxp_Layout 1 21/12/2021 11:01 Page 1
Your Headquarters for Global Aircraft Sales
2015 NEXTANT 400XTi • Serial Number: RK-276 • TT: 4,092 • Total Landings: 8,752 • Aircell Gogo Biz w/ATG-4000 • Engines On Programs • Auto-Throttles • Collins Pro Line 21 Avionics Suite • ADS-B Out & WAAS/LPV • FAA Part 135 Certified; IFA Compliant
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MARKET INSIGHTS
What’s the Outlook for Aircraft Financing in 2022? AvBuyer’s Matt Harris asked David Hudak of 1st Source Bank’s Aircraft Finance Division for his insights into the market for financing private airplanes. How did the market develop during 2021, and what will the financing industry look like in 2022? Find out here… onsidered a leading source for aircraft financing, 1st Source Bank’s history stretches further back than aviation itself. Established 158 years ago in 1863, aircraft financing has been offered by 1st Source for more than 35 years. Today, the Aircraft Finance Division at 1st Source can accommodate more than 300 transactions annually, with the main focus currently being the turboprop and jet markets across the United States, Mexico and Brazil. Nevertheless, the bank will actively finance turbine helicopters, too. “The total value of our aircraft financing portfolio is in the mid-nine-figures range, via traditional loan terms,” David Hudak tells AvBuyer as he sits down to discuss the market. Mr. Hudak graduated from Indiana University with a degree in accounting, and began his career financing construction equipment in 1990 before accepting an opportunity to work at 1st Source Bank as a Senior Credit Underwriter in 1995. The position was within the Specialty Finance Group of the bank, focusing on
C
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aircraft and other verticals. “My career included several promotions through the credit group that always had me closely tied to underwriting aircraft transactions,” he explains. In early 2020, upon the retirement of a long-time colleague and friend, Hudak was presented with the opportunity to lead the Aircraft Finance Group. “We have a seasoned team of professionals consisting of Relationship Sales Officers, Credit Underwriters, and Loan Operations, focused solely on financing an aircraft purchase,” he says. Indeed, with offices across the US, most of 1st Source’s aircraft finance sales professionals are pilots. “We help our clients realize their dreams through a service model of distinctive convenience, straight talk, and sound advice that always keeps their best longterm interests in mind,” he explains. Having outlined both his and his Group’s expertise in the industry, Hudak shared insights and outlooks on the aircraft finance market as a feverish year in the Business Aviation industry came to a close…
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AvBuyer: Can you sum up the market for aircraft financing during 2021? How did it change over the course of the year? DH: Since the summer of 2020, the market has been robust. 2021 saw a continuation of what we saw in the second half of 2020 when the market took-off and demand accelerated. We continue to see an increase in opportunities across all segments of the industry, as well as some challenges and stresses with the lack of quality inventory available for sale. Over the past year, we have noticed two major changes to the market: There has been an increasing number of clients asking to be pre-approved while they look for the right aircraft that meets their mission; and transactions are moving at an accelerated speed in comparison to previous years. Despite record low availability of pre-owned aircraft for sale, and rising interest and inflation rates, we continue to see a high volume of business through new acquisitions and refinancing opportunities.
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AvBuyer: We’ve heard so much about how the market for pre-owned business jets heated up following the initial Covid-19 lockdown. Was there a corresponding uptick in applications for financing, and who were they coming from? First-time buyers, repeat customers, fractional and charter operators, or a combination? DH: With the Covid-19 shutdown in March 2020 came a lull in activity. At that time, we were providing deferrals, working through various government programs, and providing comfort and counsel to clients who needed assistance in the face of the unknown. In August 2020, we began to see an uptick in applications coming from all facets of the industry, leading to a record month for closing and funding levels in December 2020. We have seen our fair share of first-time buyers (as a percentage of the total applications increase). But more importantly, our ability to serve and advocate for
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our clients has led to increased opportunities with both new clients and repeat customers. Additionally, we have had our share of unqualified buyers attempting to acquire aircraft above their means. AvBuyer: Regarding today’s pre-owned inventory, there is plenty of talk suggesting that many of the aircraft remaining on the market are older jets and turboprops, perhaps with higher, or nearer-term maintenance requirements. Does this impact the appetites of the top aircraft financing companies to lend? If so, what can buyers do to optimize their chance of being approved for a loan? DH: The critical piece to this equation is to ensure you don’t skip a step in the acquisition process. Make sure you go through with a pre-purchase inspection. Customers should always be patient in their buying process, no matter what the economic environment is. Few banks really know aircraft well, and those that do will provide helpful advice to customers so they can navigate the purchasing process, effectively and efficiently. Good aircraft will still enter the market, but will tend to sell quicker. We have seen many off-market aircraft sold. We realize the market is moving fast and aircraft are going off-market as quickly as they come on to it, but due diligence upfront will reduce – or altogether remove – the chance of surprises. Additionally, understanding the pedigree of the aircraft is important. Understanding the prior ownership, and where it has been based can matter greatly. Incidentally, if a client paid cash for their aircraft purchase in order to take ownership in 2021 and then 40 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
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looks to finance it in 2022, a pre-loan inspection is part of our due-diligence. The available pool of used aircraft to lend on has become saturated with older, less-desirable aircraft. When the market corrects itself, I expect that the value of these types of aircraft will decrease substantially. AvBuyer: One market analyst recently said that after more than a decade of flat deliveries from the business jet manufacturers, the next two-or-three years could see a significant increase in the number of shipments being made. Is the aircraft financing industry ready to finance a couple of hundred additional aircraft, should that happen? DH: If this does happen there is plenty of liquidity in the market today to handle the needs of the industry, including here at 1st Source Bank. Aircraft financiers would welcome the shift to a portfolio comprised of newer, more technologicallyand fuel-efficient aircraft. Money is readily available to lend, but paying too much for a higher-time or older aircraft doesn’t make much sense. The more measured increases in production that have been publicly announced will not have a significant impact on the overall market size, and the financing industry can easily handle those increases. The ability to service the client in a timely manner will be key. Some items of concern would be that 1) the aircraft manufacturers typically have long lead-cycles, thereby needing time to make significant increases in production; 2) supply chain challenges may continue for an unknown length of time; and 3) there may be changes in tax law that could have an impact on purchasing a new aircraft.
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AvBuyer: What is your outlook for the aircraft financing market in 2022? DH: Covid-19, while detrimental in many ways, has created more appreciation and demand for the safety and convenience of private aircraft. Quality aircraft availability will be the issue. 2021 burned through whatever cushion there was in the market, in terms of clean, good quality pre-owned jets and turboprops for sale. With lower inventory levels today, we may see a lesser deal volume in 2022, and continued upward pressure on both aircraft pricing and loan interest rates. Availability will likely be an ongoing issue, along with a shortage of pilots and qualified technicians to meet the demand in the market. However, the need to remain safe and healthy, along with the convenience offered by private airplanes, will continue to drive more interest in private aircraft finance. Some new owners who recently entered the market may decide to sell once they become more familiar with the true cost of aircraft ownership, which may help a little with the stress on current inventory levels. AvBuyer: …Speaking of which, if a first-time buyer is considering a first step into aircraft ownership during 2022, what would you advise them if financing is the route they intend to take?
DH: Start the process early, and take a patient, knowledgeable approach. Be prepared, and educated, on the nuances of buying and owning an aircraft. This includes assembling a team of professionals who are experts in the Business Aviation market. Working with a strong broker/dealer, aviation tax professional, aviation-focused attorney, as well as a dedicated aviation lending source, makes a difference in reducing the headaches, and executing the purchase properly. In this time of scarce pre-owned aircraft inventory and rising values, working with a dedicated aviation partner, such as 1st Source, through the buying process will limit the chances of lost deposit funds, undue down-payments, and surprise non-approvals. As it relates to financing an aircraft, compiling a full financial package – including financial statements on your business (both tax returns and accountant-prepared statements); financial statements on the owners/individuals; tax returns; detailed personal financial statement (including bank/brokerage statements to support liquidity); and being prepared to tell us about yourself – helps greatly with response times. Knowing your customer rules is critical in banking. And the more you share upfront, the better it will be for your aircraft financing needs. More information from www.1stsource.com/business/specialty-financing/ specialty-financing/aircraft-and-helicopter T
MATT HARRIS is commissioning editor for AvBuyer. He is an experienced General and Business Aviation journalist and has edited a variety of titles across the last two decades. These include AvBuyer, BizJet Advisor and GA Buyer Europe. https://www.linkedin.com/in/ matthew-harris-avbuyer/
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Freestream January.qxp 22/12/2021 14:08 Page 1
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SUSTAINABILITY
A Guide to Sustainable Aviation Fuel What is Sustainable Aviation Fuel, and what needs to happen for it to become mainstream within Business Aviation (and the wider aviation community)? Fabrizio Poli explores… ustainable Aviation Fuel (SAF) is an alternative to traditional jet fuel. SAF is made by blending conventional kerosene with renewable hydrocarbon. Because it is certified as ‘Jet-A1’ fuel, no modifications are required for aircraft to use it. This mixture can be handled the same way as jet fuel, so there is no need for changes in fuelling infrastructure, nor aircraft modifications. Any aircraft certified for using the current specification of jet fuel can use SAF. SAF is currently more expensive than traditional jet fuel, but some companies are willing to pay extra if it means helping reduce our carbon footprint. As more research is done, and as technology advances, SAF will become increasingly efficient and, in return, it will become cheaper for customers. Following are some quick facts on SAFs, courtesy of IATA: • Over 370,000 flights have taken to the skies using SAF since 2016 • 100 million litres of SAF were expected to be produced in 2021 • SAF can reduce emissions by up to 80%, during its full lifecycle • Around 14 billion litres of SAF are in forward purchase agreements
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What are the Economic & Social Benefits of SAF?
Sustainable Aviation Fuel is mainly produced from feedstocks, and therefore can be sourced worldwide across several different feedstocks that can be produced on the large amounts of land that is unviable for food crops. This can simultaneously reduce the exposure to fuel cost volatility that comes with having a single energy source, while introducing a new industry (sustainable aviation fuel production) to developing nations.
How Much Does SAF Cost?
The main challenge to Sustainable Aviation Fuel will be ensuring an adequate supply of sustainable feedstock at a competitive price. The market price of SAF today is still three- to five-times higher than for conventional jet fuel. There is also a limited production capacity available, of around 0.1% of total aviation fuel consumption. Nevertheless, additional production volume is expected. Companies such as SkyNRG and Neste have already announced plans to install new SAF production facilities across Europe. Fuel costs form a significant proportion of an aircraft’s operating cost, meaning price volatility of crude oil affects long-term planning. This is a barrier to entry to the market. Indeed, kerosene is used in the blending process for SAF, www.AVBUYER.com
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therefore any changes in prices could impact the supply of SAF on the market. In Europe, the typical price of fossil-fuel based kerosene is €600 per ton, compared to SAF, made from cooking oil, which could range anywhere between €950 and $1,015 per ton. In order to see the benefits of SAF realized in full, the price of SAF must be nearer to, or even match, the cost of fossil fuels.
What’s the Cost of SAF Production?
Refining plants can easily switch between SAF and diesel production. However, due to the stricter specification for jet fuel, production of SAF is more expensive. Other cost-drivers include feedstock availability, supply chain, and logistics which are not yet matured. Generally, with the limited current infrastructure, and without the economies of scales, price per unit of production is higher than conventional jet fuel.
SAF: A Road-Map for the Future
All of the above factors play a part in the limited supply of Sustainable Aviation Fuel to meet the total industry demand (less than 1% according to ATAG). To meet the demand, incentives and global policies must be introduced, including: www.AVBUYER.com
•
•
United States: Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard to support new technology production plants, and provide incentives for producing/using SAF. Europe: The Renewable Energy Directive (II) (RED II) (2020-2030), a 1.2X multiplier will be applied in the production of SAF instead of road transportation fuel (i.e. an investment of public or private funding will yield 1.2 x or 20% increase in economic output).
With the need to rapidly decarbonise between now and 2050, it is essential to ensure the initial commercial sustainable aviation fuel plants come on-line in the next few years, if there is to be any chance of scaling up this technology for the future. Much depends on how emerging technology deployment is supported. Reducing costs over the long-term will require investment in advanced technologies to process feedstocks more efficiently, on a greater scale, and investment in the development of sustainable and scalable feedstock options. However, in the short-term, interim support from governments and other stakeholders through policy incentives is needed. This support needs to be part of a long-term framework to give investors the confidence to make the big investments required to grow supply.
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SUSTAINABILITY
AVBUYER.com MAP A: Existing and Announced SAF Production Capacity
Where Can SAF Be Found, Currently?
Map A (above), sourced from ICAO, details all the locations around the world that offer Sustainable Aviation Fuels. The map details whether the SAF is delivered continuously, or in batches. At present, there are 38 airports reported by ICAO as having ongoing SAF deliveries. There are then an additional 15 airports that receive batch deliveries. Sustainable Aviation Fuel has seen a significant rate of growth in the past seven years; growth that is expected to continue exponentially. Interestingly, around 50% of all airports around the world supplying SAF have started to do so during 2021. In terms of SAF production figures, it is expected that 2025 production levels will be around 17 times greater than 2020 production levels.
interest in obtaining, and using their own SAF supply, and Gulfstream has worked to connect them with the World Energy refinery. In 2020, Gulfstream also started to offer the fuel at its service center at Van Nuys Airport in California. In October 2019, Gulfstream flew carbon-neutral for the first time, taking five SAF-fuelled company-owned jets filled with passengers from Savannah to Las Vegas. The offsets represented more than 200% of the carbon emitted during the trip.
Business Aviation and SAF
One of the business jet OEMs leading the way with the uptake of Sustainable Aviation Fuels is Gulfstream. Since March 2016, Gulfstream has used more than 1.2 million gallons of SAF in place of conventional jet fuels. By December 2019, it achieved the milestone of flying its corporate aircraft more than 1 million nautical miles on SAF. Every gallon of SAF used by Gulfstream’s Savannahbased fleet saves at least 60% in carbon dioxide emissions on a life-cycle basis, versus petroleum-based jet fuel. Gulfstream has used a 30/70 blend of low-carbon, dropin SAF and Jet-A in operations at its Savannah headquarters since 2012. To date, it has used more than 980,000 gallons of the SAF blend, reducing carbon dioxide emissions by more than 1,700 tonnes. Indeed, Gulfstream’s use of SAF has encouraged others to embrace this environmentally-friendly fuel. In March 2019, it completed the first sale of SAF to a Gulfstream operator. Nearly 20 other Gulfstream operators have expressed 46 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
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SUSTAINABILITY
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Meanwhile, Gulfstream also designs its aircraft with efficiency in mind. When the industry goals were established in 2009, the Gulfstream G450 and G550 were baselines. The Gulfstream G500 and G600 both fly [nearly 30 knots] faster than the G450 and G550, featuring larger cabins. Offering the same fuel burn as their predecessors, these new-generation jets offer a 32% improvement in fuel efficiency.
“Interestingly, around 50% of all airports around the world
SAF’s Future: Technology & Cost are the Keys
More airports are needed to provide Sustainable Aviation Fuels, helping to driving the price down. This will encourage more aircraft operators to use biofuels. Few would argue that making these fuels more available and developing technology that reduces carbon emissions is the way forward.
supplying SAF have started to do so during 2021.”
More information from www.bizjettv.com and www.orvilleaviation.com. T
FABRIZIO POLI is Senior Consultant at Orville Aviation. He is also an Airline Transport Pilot. Mr. Poli has over 35 years experience in the aerospace sector, both as an aviator and in business. Fabrizio is also founder of popular YouTube channel, Biz Jet TV. More information from www.orvilleaviation.com
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AeroBuyNow January.qxp_Layout 1 21/12/2021 11:39 Page 1
<oZclj`m\ 8Zhl`j`k`fe DXe[Xk\j BEECHCRAFT B200 OR BEECHCRAFT B350 2M$ Max Budget Cash and Educated Buyer
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BUYING & SELLING AIRCRAFT
Buying a Jet in 2022? Tips to Start the Process If you are planning on buying a used business jet or turboprop in 2022, where do you begin? Dave Higdon shares some tips to help get your foray into the market off to the best start…
A
ccording to JETNET iQ’s December ‘Pulse’ report, what appeared as the nascent easing of business aircraft market pressures at mid-year took a battering from a pair of Covid-19 variants as the year rolled toward its inevitable conclusion. “Would-be buyers of late-model pre-owned aircraft have had few, if any, good alternatives to select from for much of the past 12-plus months, further bolstering OEM sales in an environment of stronger pricing,” the report said. For most of 2021, good, late-model pre-owned business aircraft have been in short supply. So much so that pricing helped make new-production models a financially competitive alternative to those attractive, late-model pre-owned aircraft – providing, of course, that you can find one that matches your operating needs. “For the OEMs, 2021 has been – and will continue to be – a year to long remember, when orders were well in excess of deliveries, and firm order backlogs were replenished,” said JETNET. “We expect that
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business jet manufacturers will deliver just shy of 700 new business jets in 2021, up approximately 11% over the Covid-reduced levels of 2020. “Year-over-year delivery volume increases will be broad-based across all aircraft size categories, led by a resurgent Textron Aviation.” Price competition helped boost those orders, at least in part because of demand for pre-owned jets and turboprops under 10 years old. And now, due to the two new Covid-19 variants, higher demand looks set to continue well into 2022. So, what should a would-be buyer do? If you hope to find the perfect business aircraft for your operation in 2022, you are going to need some trusted dealers and brokers on speed dial. At a time where buyers are already active – and prices are rising – shop early, and shop diligently.
The Fundamentals Still Apply…
Hard times may tempt the unwise to hurry the process and jump on the first “good deal” to present itself. The old proverb “act in haste, repent at leisure” would www.AVBUYER.com
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certainly apply here. Rushing the process could cost the buyer in many ways. It is always best to define and use the process that’s helped many a rookie buyer land their best deal knowing that their choice was wise and well-informed. While it is difficult to imagine starting the shopping process too early into the New Year, to do so you will need clear definition of what exactly is needed. Following, we’ve provided some tips and pointers to help establish that definition. Defining your needs could be the toughest step, especially if you are a first-time owner who is new to the processes, terms, and common knowledge. Here are some tips to help get the process off on the right footing…
1. Mission Minima
You will need a well-defined vision of the mission need for your private jet or turboprop to help ensure you do not buy too much, or too little performance and capacity. Establish how many seats need to be occupied on a typical trip in the cabin, and how often additional or fewer seats may be needed. Will the airplane need to provide more than the average luggage space? And who will be flying aboard the aircraft most of the time? Executives, technicians, or others? By establishing this, you can build a picture of how the cabin needs to function, and the types of equipage your passengers will need to have on your www.AVBUYER.com
newly-acquired aircraft to enable them to function at optimal capacity.
2. Where Will You Fly?
What is the ideal range of the aircraft you need to buy? Are you planning on flying shorter legs within your own continent, or to traverse vast swathes of ocean on lengthy trans-continental trips across multiple time-zones? With capabilities ranging from just over 1,000 nautical miles, to approximately 7,500nm, the options available from today’s business jets can be dizzying – especially when you consider that the published range number of an aircraft can be impacted by the payload it’s carrying (and various other factors). So, the answer to ‘where will you fly?’ needs to be married to ‘with whom?’ It is wise to determine what percentage of anticipated travel the aircraft will need to cover as well, and what percentage would it make better sense to utilize supplemental lift (charter)? Factoring in the costs of ownership, it would make little sense to buy a bigger jet that can cover an extra 10% of your flying needs, when a smaller (less costly to buy and operate) airplane can cover 90% of your mission needs. Focus on your core mission needs. Chartering for the occasional longer-range or higher capacity needs beyond your regular mission profile would be the prudent way to go.
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BUYING & SELLING AIRCRAFT
“Chartering for the occasional
3. Budget Matters
A business aircraft can do wonders for the company that owns it. That’s why so many successful businesses use them in their day-to-day work. Business aircraft pay off. Nevertheless, the sums of money involved to own one can be daunting – particularly for a new owner. It’s vital to understand all of these, and have a budget for a projected period of ownership. Some costs will vary, while others are fixed. Maintenance; hangar rental; insurance; crew costs; fuel; navigation charts; software updates for the pilots’ devices; and any upgrades a candidate aircraft on the pre-owned market will need – these all add up. But you should create a budget for them once the aircraft type has been determined.
Start the Process Now
It’s impossible to predict how many of any given aircraft type will be available at any given time on the market, according to various experts polled. They recommend starting the search process early in 2022 –
longer-range or higher capacity needs beyond your regular mission profile would be the prudent way to go.” right after agreeing on the need. Consult with a trusted broker, dealer, or well-versed consultant to help answer mission-related questions, the search, and finally the selection, including prepurchase inspections, and registration issues. They will ultimately save you a lot of time and expense, and maximize the chance of success for your upcoming foray on the market. With your mission questions answered, you can get a running start right off the bat. So give your company the benefit of putting time on your side as you enter the pre-owned business aircraft market in 2022. T
DAVE HIGDON is a highly respected aviation journalist who has covered all aspects of civil aviation over the past 36 years. Based in Wichita, he has several thousand flight hours, and has piloted pretty much everything from foot-launched wings to combat jets.
MAKE MORE INFORMED BUYING & SELLING DECISIONS with AvBUYER.com
Contact him via Dave@avbuyer.com
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GULFSTREAM G550
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GULFSTREAM G280
GULFSTREAM G150
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GULFSTREAM IV
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LEGACY 500 S N
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INFO@AVPROJETS.COM WWW.AVPROJETS.COM l Annapolis, MD 21401 l (410) 573-1515
900 Bestgate Road, Suite 412
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BUYING & SELLING AIRCRAFT
Aircraft Export Laws:
Owners, Beware! With an increase in US government enforcement actions for failure to comply with applicable aircraft export laws, it’s vital to understand these complex requirements and regulations. Here, the National Aircraft Finance Association (NAFA) breaks them down…
A
ircraft transactions are complicated and involve a host of tax and regulatory issues. While attention has rightly been focused on federal and state tax planning and compliance with FAA, DOT (among other agencies) regulations, compliance with US export laws has often been inadvertently overlooked. In many cases, parties have failed to properly export aircraft due to confusion over, and lack of awareness of, the requirements. •
One common misconception is that deregistration from the FAA registry and/or issuance of an export certificate of airworthiness
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• •
satisfy US export clearance requirements. Another common misconception is that export laws and export clearance requirements are not applicable to US registered aircraft. Further, the export regulations are not written with aircraft in mind, so applying them within the context of aircraft transactions can be difficult.
Nevertheless, recent government enforcement actions, including an uptick in aircraft seizures, have placed a spotlight on the importance of compliance with US export laws. As the failure to comply with applicable export laws (including making Electronic Export Information (EEI) filings when required), may result in significant www.AVBUYER.com
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EEI filings are used by the US Census Bureau Foreign Trade Division (Census) – the government agency which administers the Foreign Trade Regulations – to collect trade statistics. They are also used by Customs and Border Protection (CBP) and the Department of Commerce Bureau of Industry and Security (BIS), which administers and enforces the Export Administration Regulations (EAR), for export control purposes. When an EEI is filed correctly, it generates an Internal Transaction Number (ITN), which serves as proof that such filing was made.
When is an EEI Filing Required?
Generally, an EEI filing is required when the value of the item being exported is over $2,500, or if a license is required, unless an exemption is available under the applicable regulations. In the context of aircraft, EEI filings are generally required when aircraft are permanently exported from the United States. If the intent is to base the aircraft outside of the United States for more than one year, the first flight out of the United States would be considered a permanent export and, in such case, an EEI filing would generally be required prior to the aircraft’s departure. This is the case even if the aircraft is on the N-registry and/or owned or operated by US persons. Examples of exemptions to this requirement generally include, among other things: penalties (including, but not limited to, substantial fines, aircraft seizure and forfeiture) you would be well advised to pay attention to this issue.
What is an Export?
The term ‘export’ is broadly defined to include an actual shipment or transmission of an item out of the United States. Accordingly, anytime an aircraft is flown out of the United States it is an export. Generally, when aircraft are physically exported from the United States as part of a sale, lease or transfer of possession/control to a foreign person, and/or if the aircraft is intended to be based outside of the United States for more than one year, an EEI filing will be required.
What is an EEI Filing?
An Electronic Export Information (EEI) filing is an electronic submission of export data, which contains details such as the parties to the transaction, the export classification control number, the value, the date of export, and the country of ultimate destination, among other data. www.AVBUYER.com
(i) Permanent exports to Canada; and (ii) Temporary exports (where the intent is to base the aircraft outside of the United States for no more than one year).
Who is Responsible for the EEI Filing?
Generally, the US Principal Party in Interest (USPPI), or an “authorized agent” (typically a customs broker) acting on the USPPI’s behalf, is responsible for making the EEI filing. The USPPI is the party in the United States that receives the primary benefit, monetary or otherwise, from the export transaction. Examples of parties that may be the USSPI include: • • • • •
The US seller/lessor; The US manufacturer; The US order party; The US maintenance facility; or The foreign buyer/lessee if a representative of such foreign buyer/lessee is physically present within the United States to obtain the aircraft on such foreign buyer/lessee’s behalf.
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BUYING & SELLING AIRCRAFT
“...anytime an aircraft is flown out of the United States it is an export.” In many aircraft export transactions the foreign buyer/lessee controls the removal of the aircraft from the United States. Such transactions are known as ‘routed export transactions’. In a routed export transaction, the Foreign Principal Party in Interest (FPPI) authorizes a US agent to facilitate the export of the aircraft from the United States and to prepare and file the EEI.
Who is the ‘Exporter’?
The term ‘exporter’ is defined in Section 772.1 of the EAR as “the person in the United States who has the authority of a principal party in interest to determine and control the sending of the items out of the United States”. The exporter is responsible for determining license requirements and obtaining licensing authority. Generally, the USPPI is the exporter, except in certain routed transactions where the USPPI contains written confirmation from the FPPI, whereby the FPPI expressly assumes responsibility for determining licensing requirements and obtaining licensing authority. In such case, the FPPI’s US agent is the exporter. 56 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Corrective EEI Filings
As of April 23, 2021, Census, in coordination with BIS and CBP, issued informal guidance setting forth procedures for corrective EEI filings. • Based on informal guidance from Census, it seems that Census construes corrective filings to be indicative of compliance. • There is no guarantee that BIS, or other government agencies, will not impose penalties. • Additional guidance is expected from governmental agencies, but in the meantime the existing guidance at least provides a path moving forward.
In Summary
Lenders, if an aircraft is based outside of US, place EEI filing on the closing checklist. And make sure to obtain an ITN. Ultimately, the regulations are super complex – consult with counsel. It pays to be proactive! More information from National Aircraft Finance Association, www.nafa.aero. T www.AVBUYER.com
\ BUSINESS AVIATION SIMPLIFIED.
BUSINESS AVIATION FINANCING. FOR THOSE WHO VALUE SIMPLICITY.
Ultimately, business aviation is an exercise in simplicity. The fastest way to get from here to there. No complications. No delays. Simple. Unfortunately, the business of business aviation can be complicated—particularly when it comes to financing. We understand that. Which is why we provide the most straight-forward, flexible and solutions-oriented financing experience in the industry—along with the experience and responsiveness you’d expect from a partner focused exclusively on business aviation financing. With no complications. And no delays. Simple.
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FINANCE
Aircraft Finance Lenders: Specialist or Generalist? The aircraft finance sector features a range of providers, some focused solely on aviation and others working across different industries. Should you opt for a specialist or a generalist aircraft finance provider? The answer can be complex, as Gerrard Cowan discovers… or some, a specialist choice of aircraft finance provider holds clear advantages. Bob Mann, President of R.W. Mann & Company, an aviation consultancy, believes specialists will in most cases “have a much better idea of collateral value, trends in loan-to-value ratios, and offer more customized financing options – especially with Business and General Aviation aircraft”. However, he notes that such lenders could work for either specialist aviation providers or be part of aviation-focused groups within more generalist providers. One benefit of working with an industry-focused provider is that such companies “want to promote General Aviation”, Adam Meredith, President of AOPA Finance, says. His company provides a range of solutions tailored to individual borrowers, in both Business and General Aviation. The company provides options, depending on whether a buyer is focused on rate, payment, chartering an aircraft, or a combination of different factors. The most common request is finance for buying an aircraft outright, though there has recently been an increase in operators looking for avionics upgrades and engine overhauls, Meredith says. AOPA works as a broker and has relationships with many lenders. By providing operators with the right package for them, this also helps the industry at
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large. “By having more options available to them, more people are likely to buy aircraft,” Meredith notes. “We have the experience to help get buyers exactly what they want.” Global Jet Capital is a specialist provider of lending and leasing solutions for business aircraft. Andrew Farrant, the company’s Chief Marketing Officer, says it dedicates its focus to Business Aviation and is led by experts in the area. “We understand the ins and outs of the market, the asset class, residual values, and what it takes to structure and execute a successful transaction in what can often be a complicated landscape,” Farrant says. “This experience allows us to transact quickly and efficiently for our clients.” Various providers aim to combine the advantages of specialist and general options. For example, PNC Aviation Finance is part of PNC Bank, which offers a range of finance solutions across various industries. However, the aircraft arm comprises nearly 40 aviation industry professionals who are focused exclusively on aircraft transactions, from marketing to underwriting to sales and servicing. “We offer our clients the best of both worlds – a team with decades of experience in this industry and the backing of one of the largest financial institutions in the [United States],” said Ramy Sidhon, Head of PNC Aviation Finance. Keith Hayes, Senior Vice President and National www.AVBUYER.com
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Sales Manager for PNC Aviation Finance, says the company provides a wide range of options for corporate aircraft owners, including asset-based loans, credit-based loans, fixed or floating rates, leasing options and more. Importantly, he says: "Our team is exclusively focused on the Business Aviation industry, providing clients with expertise and a holistic transaction process from tip-to-tail.”
Choose a Partner Carefully
Over the past year the company has seen high levels of activity, Hayes reveals – especially with first-time buyers. “Prior to the Covid-19 pandemic, this customer might have been utilizing private jet charter or fractional ownership, but now is interested in moving toward full ownership,” he says. “Due to this trend, extra care must be taken to walk the prospective buyer through the process to avoid any potential pitfalls or delays,” as well as to set the right expectations for the deal flow. All of this means it is critical to choose a finance partner carefully, as well as other third-party advisors, like brokers and attorneys. “Having trusted advisors that specialize in business aircraft and have a vast knowledge of potential pitfalls will aid in successfully navigating this process,” Hayes adds. “Engaging these partners early in the process was always a smart move, but now it’s critical.” www.AVBUYER.com
The Current Aircraft Finance Trends
Hayes notes the increased utilization of corporate jets, which generates continued interest in leasing. This demand is driven by the off-balance sheet treatment that leases provide, and the sales tax at closing. While changes in accounting regulations mean they do not have the same off-balance sheet impact they previously did, there is continuing interest in both operating and synthetic leases. Global Jet Capital has also seen rapidly growing interest in operating leases, Farrant notes. This offers a high degree of predictability around expenditures related to the aircraft, allowing the lessee to deploy capital elsewhere. “With OEM backlogs stretching out, we are also seeing a lot of interest in our pre-delivery Payment product, which allows clients to finance the standard pre-delivery payments associated with ordering an aircraft that will not deliver for several months or longer.” The biggest trend has been the continued strong demand, Farrant adds. This has less to do with financing and more to do with general market dynamics. “Once the initial shock of the pandemic settled and people realized they needed to keep traveling, Business Aviation was more broadly recognized for the value proposition that has sustained it for the last 60plus years: Productivity, flexibility, privacy and safety.
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"Business Aviation was more broadly recognized for the value proposition that has sustained it for the last 60-plus years: Productivity, flexibility, privacy and safety." Only now [due to Covid-19] safety includes healthrelated safety.” There have not been any major shifts in financing, though in the low inventory environment being experienced currently, cash is helping some clients secure aircraft quickly and efficiently. “Based on past experience, some of these cash buyers will look to unlock the capital tied up in their aircraft down the road, which will present opportunities for businesses like ours,” Farrant predicts. Meredith noted that with demand at historic highs, it has been difficult to find aircraft, while the average hold time of owners is shortening as they upgrade more quickly than normal. “One of the things we’ve seen recently is a ‘thinning of inventory’,” he notes. “As a result, buyers have been actively shopping for a pre-approval, so as not to lose out to cash buyers.”
In Summary
In such a market environment, it’s vital that owners consider their aircraft financing options carefully, whether specialist or general. However, aviation analyst Brian Foley warns that operators should be particularly careful when dealing 60 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
with smaller finance providers, some of which he says can be ‘our fair-weather friends’. “They dabble in the market when one of their bank customers requests aircraft financing, but then quickly withdraw when the market heads south – often never to be seen in the industry again.” More information from: AOPA Finance
– https://finance.aopa.org/
Global Jet Capital
– www.globaljetcapital.com
PNC Aviation Finance – https://www.pnc.com/en/ corporate-and-institutional/financing/lending-options/ T pnc-equipment-finance/aviation.html
GERRARD COWAN is a freelance journalist who focuses on aerospace, defense and finance. He can be found on Twitter @GerrardCowan
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Is it Worth Chartering Out Your Jet? (Part 2) If you are looking to generate some charter revenue to offset operating costs when your business jet is not in use, how can you assess whether it’s worth your while? René Armas Maes continues his exploration…
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reviously, we discussed ways to benchmark different Aircraft Management companies and assess which would yield the closest return to your target financial contribution, thereby making it worthwhile to charter your jet out. Here, we consider additional areas that need to be fully understood to build a trust-based, win-win relationship with a management company. When placing a private jet on the operating certificate of an Aircraft Management company, before receiving any income an aircraft owner should expect to pay additional costs, which should be carefully weighed-up. The aircraft owner needs to know what the annual cost will be to maintain the jet to the higher safety and operational standards required for Part 135 62 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
operations. Additionally, you should expect more scrutiny from regulators when operating Part 135 flights. As an example, when a jet is operated under Part 91, service bulletins, airworthiness directives, and special aging aircraft maintenance procedures are recommendations that may not need to be executed as soon as the OEM issues them. However, under Part 135 those recommendations become mandatory and must be executed to maintain airworthiness. Another issue for the aircraft owner to consider is which Part 135 requirements would apply. Different Part 135 requirements apply to aircraft that have ten or more seats than those with less. A seat capacity of ten or more incurs more stringent requirements, potentially adding a significant additional cost burden. www.AVBUYER.com
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Moreover, aircraft owners should expect incremental maintenance cost increases associated with the extra wear-and-tear of flying additional charter hours. A buffer to cover those costs should be built into the Direct Operating Cost per hour. While leasing your airplane to a Part 135 charter operator to generate income can sound attractive, the increased cost of maintenance may prove to be the ‘make or break’ point between a decision to charter the jet out, or not. The decision and process of placing an airplane onto a Part 135 certificate is a lengthy, multi-step one, and includes the modification of operating manuals, more rigorous maintenance oversight (including mandatory overhaul times), and much more besides.
Aircraft Usage, Availability and Cleaning Procedures
One key area to focus on when negotiating a contract with an Aircraft Management company is how the aircraft will be operated. Will it only fly domestic trips, or a combination of domestic and international? Should the aircraft return to its home-base each day? www.AVBUYER.com
Another core area to consider is how flexible you can be in terms of accessibility for Part 135 operations? Placing an aircraft on a Part 135 operating certificate can mean a lack of access to the aircraft, and that needs to be factored in the decision of whether to charter or not. Typically, the aircraft management company will be looking to increase the aircraft’s annual utilization to over 250 hours, which increases the chance of scheduling conflicts arising. Aircraft owners who are serious about offsetting costs via charter will anticipate this. Planning and flexibility are key on both sides for a win-win relationship to flourish. Discuss your month-by-month flight schedule requirements with the Aircraft Management company, along with your “guaranteed” aircraft availability. Agree when the aircraft will be available for Part 135 activities and when it will not be. And agree on the remedy if the aircraft is not available for your use when needed. Will the Aircraft Management company provide supplemental lift? As well as making it clear when the airplane can be used for charter flights, you may also wish to stipulate rules about the type of food and beverages served onboard (i.e., no red wine, preventing stains on carpets, and the associated deep cleaning costs). Agree, too, on which type of cabin cleaning procedure should be executed after each charter flight, and prior to your private use.
Taxes, Liabilities & Accounting
Placing your aircraft on the certificate of an Aircraft Management company to conduct charter services to third parties will impact tax, liability, and accounting, including eligibility for accelerated and bonus depreciation (where the asset is used more than 50% of the time in Part 135 operations), as well as accelerated write-off depreciation schedules. Involve your legal team to understand the plethora of implications. Specifically, state sales and use taxes should be reviewed carefully.
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Depending on the specific arrangement, your team may be able to negotiate different tax structures, while tax exemptions should be reviewed and investigated. Ascertain whether additional insurance coverage is required for flights when operated under Part 135. Liability, insurance coverage and premiums paid to adequately protect yourself should be a part of the negotiations you have with an Aircraft Management company.
In Summary
Most disagreements arising between aircraft owners and management companies come from two key areas: Invoices (costs/revenue share) and poor communication. Be clear, making sure you thoroughly understand one another, or where there’s a lack of clarity, ask questions. Carefully review the administrative fees, mark-ups, surcharges, and fuel prices per gallon. Be clear about your entitlements regarding insurance savings and premium discounts, pilot training, maintenance, spare parts, and bulk purchase benefits (such as fuel procurement). Finally, negotiate preferred fuel, labor, and maintenance rates. And if you need extra work to be done for your aircraft to comply with Part 135 airworthiness, make sure you negotiate that as part of the deal too. T
“One key area to focus on when negotiating a contract with an Aircraft Management company is how the aircraft will be operated.”
RENÉ ARMAS MAES is Vice President Commercial at Jet Link International LLC, an international aviation consultancy. He has built a successful track record for delivering Business Aviation consulting projects for Fortune 500 companies, Venture Capital firms, and HNWIs in North America, the Middle East, Europe and Latin America. His expertise includes corporate travel assessments, business aircraft analysis, aircraft financing and sales.
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Tips When Buying Jets for Part 135 Charter Ops Owners wanting to have their managed aircraft operated on revenue-earning charter flights will quickly learn that the best equipment and furnishings for private flights isn’t always ideal for charter customers. Chris Kjelgaard asks the experts for tips... hose who buy business aircraft purely for their own private and business use often become immensely proud of their aircraft, striving to outfit their jets with the very latest in flight-deck and cabin equipment. In many cases such owners customize the furnishings and fittings to suit their individual style and needs. But while pride in one’s aircraft and the wish to make it a tangible expression of one’s individuality are very natural emotions, they’re unlikely to be helpful for owners contemplating having their managed aircraft operated on charter flights in order to help offset operating costs. The ideal attributes for an aircraft made available for charter hire may be substantially different from those which make it ideal from the owner’s personal viewpoint. The qualities which make an aircraft strongly marketable for charter use start with the aircraft type, its age, its external paint, and its seating configuration. During the Covid-19 pandemic, many are chartering business aircraft for the first time. While they might not know their preferences fully the first time they book and fly, the technologically-savvy customers of today quickly come to know exactly what they want a chartered aircraft to offer, according to Kevin Kliethermes, Director of Sales for Flying Colours Corporation. To such customers, aircraft type and age “does [matter] to a certain extent,” he says. This is because “there are quite a few new entrants” offering charters in today’s very strong market, “and if the aircraft looks old and dated, customers may have a different expectation in terms of safety”. Owners “are better off” when the aircraft they make available for charters are “cleaner and newer-looking,
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because customers tend to choose their aircraft from pictures” (on charter operators’ websites or in printed charter guides). Additionally, it is often best for business aircraft — particularly jets — used for charters to have neutral external color schemes, says Eric Zipkin, Founder and President of Oxford, Connecticut-based scheduled and charter operator Tradewind Aviation. “In the bizjet world, a lot of business goes through brokers, and they want a white-label [generic-looking] aircraft,” he says.
Operating Economics and Seat Capacity
Next, says Zipkin, “You really need to talk about the [operating] economics” of the aircraft. “Some aircraft are better than others — for instance, the Cessna Citation CJ3 versus the Citation Bravo or Bombardier Learjet.” Better operating economics can make all the difference to owners who want to make their aircraft available for charter: “The margin the owner makes per hour is sufficient to make it worth their while to charter” the aircraft out, he explains. “Typically, low direct operating cost argues for newer, higher-capital cost aircraft — aircraft which have better fuel burn and are robustly supported” (by the OEM). Tradewind Aviation is best known for its 18-strong scheduled and charter fleet of gunmetal gray-liveried Pilatus PC-12 turboprops, and its robust scheduled and charter route networks in the Northeast US, and in the Caribbean, operating from a busy base at San Juan. But Tradewind also operates US domestic and US-Caribbean charter flights with three Citation CJ3 Light Jets it manages for their owners. www.AVBUYER.com
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“In today’s market we’re seeing a lot of new customers to the [charter] industry,” Zipkin notes. “They’re starting with Turboprops and Light Jets. They’re a very hot commodity right now.” Passenger-seat capacity is an important consideration when buying, or outfitting aircraft for charter work, says Zipkin. Regarding the particular type of aircraft, “you want to default to a higher cabin capacity,” he suggests. “You can always sell an eight-seat aircraft to six passengers [for a charter], but you can’t sell a six-seat aircraft to eight passengers. However, Zipkin recommends that would-be aircraft owners always take advice on aircraft selection from the Part 135 operators they have chosen to manage their aircraft. “It’s best to work closely with the Part 135 operator you will use,” he says. “They will be able to advise you as to what is the most suitable aircraft.”
Tips on the Avionics
Many owners of privately operated business aircraft want to install the latest avionics suites in their aircraft, on occasion replacing equipment items which are standard fit for the flight deck with newer, more highly functional aftermarket equipment. Doing so is not generally advisable for owners who plan on chartering their aircraft out, Zipkin and Kliethermes say. Both reckon charter aircraft should retain the standard avionics fit for the aircraft as originally delivered. “To go through the general process that the FAA requires [for certifying an operator to operate Part 135 charters], a certain level of pilot training is required,” says Zipkin. “This needs to be available in simulators and in other aircraft of www.AVBUYER.com
the same type” in the operator’s fleet. If it isn’t available, “it becomes much more difficult to train and qualify pilots. You don’t want to have an orphan avionics suite [in any given aircraft] — it is much less efficient to operate that way.” “A consistent OEM approach is the best,” Kliethermes adds. “Otherwise there will be training, obsolescence and certification issues. If multiple aircraft in the fleet are odd ducks, you will have limited crew available to fly them, or you’ll have to train the entire crew to fly two different airplanes.” “Charter operators look for modern cockpit platforms that are well supported and reliable,” says Ann Pollard, an Aircraft Sales and Acquisitions Representative for Duncan Aviation. “Reliable equipment and a solid support network are key factors that enable charter operators to maximize efficiency and minimize downtime.” While standardized avionics suites are important for charter aircraft, “Legacy avionics systems can be expensive to maintain,” Pollard argues. As a result, “Many operators elect to participate in avionics protection plans. “These programs are often transferrable to new owners, for a small fee. The two notable programs are the Corporate Aircraft Service Program (CASP) offered by Rockwell Collins, and MSP Avionics from Honeywell. Both programs are similar in how they work.” For an annual fee, any time that an avionics unit fails, the operator can order an exchange part from the manufacturer and this is shipped via overnight delivery at no additional cost. All exchanges and freight charges are covered. “In today's age of avionics platforms of EFIS displays and integration of what used to be multiple units into one unit,
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in many cases the cost of one exchange part could be more than what one of these programs costs for an entire year,” Pollard adds. “The protection plans offer a way for operators to streamline their budgets and avoid expensive surprises.”
Tips on Cabin Management Systems
The best cabin management systems for charter aircraft are those which are “easy to operate and maintain,” notes Zipkin. “There’s kind of a minimum standard [for CMS functionality] in the charter business, but then not a great deal more.” However, from the viewpoint of a large MRO company which performs many cabin refurbishments, Kliethermes doesn’t see charter aircraft CMS requirements in quite the same way. “From a charter perspective, people are becoming increasingly savvy. “They like to have the bells and whistles, and they know how to operate them. The market is becoming more educated about the feature sets available,” he says. “Charter operators want passengers to be able to use their devices to stream content to and from their phones; to stream to the bulkhead monitor; and to get the moving map [display] to their phones,” Kliethermes adds. But operators "don't 68 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
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necessarily... want passengers to be able to change the lighting [from their devices] or move the window shades up and down — that’s not a huge deal for a charter flight.” However, an increasingly important CMS issue for charter operators is “control of the audio by the clients,” says Kliethermes. “How do I get that on the aircraft? I need Bluetooth capability. There is a movement to better audio systems, and Bluetooth [control] is increasing in popularity. It’s now in almost all Flying Colours refurbishment projects.” From the owner’s standpoint, CMS choice “is a trade-off,” says Kliethermes. “Can you spend $1m or less and still provide all the functionality needed? The more complex [the CMS] is, there can be more potential issues. It’s always a difficult line to walk.”
Tips on Connectivity
Connectivity is “always top of the list” in terms of cabin requirements for charter aircraft, notes Kliethermes. “It’s very important for charter operators — it’s the difference between a customer booking or not booking an aircraft. “Whatever the aircraft type happens to be, you book with the one that has the connectivity.” Arguing against the need for charter operators to install very sophisticated cabin management systems in their
aircraft, Zipkin says: “Cabin entertainment is almost a thing of the past these days” — passengers prefer to bring their own electronic devices on board and stream content from those devices. As a result, “Connectivity is more and more important: People expect it, and the next level is supporting twoway streaming to and from electronic devices.” But while having broadband capability is a must now for charter aircraft, “You might not turn up the spigot completely, but you would want the ability to ratchet up” bandwidth over time, as wireless connectivity technology continues to evolve, and as customer demand gradually increases, Zipkin suggests. “There are two ways to look at it. You can get the cheapest” workable option, “or you can get the best technology available in the longest run, going forward. That also speaks to your target horizon for [ownership of] the aircraft.” For example, if the owner plans to keep the charter aircraft for ten years, then they should install a connectivity system which can be upgraded throughout that ten-year period. Duncan Aviation recommends Gogo’s AVANCE L5 terrestrial 4G cellular Wi-Fi system to its customers, says Pollard, as the system is able to offer streaming capability to and from multiple devices in the cabin. However, Kliethermes says that today streaming is becoming much more important, so bandwidth is becoming much more important.” Satcom connectivity is growing in popularity because of the higher bandwidths, lower rates per megabyte and greater area coverage provided. Kliethermes says the costcompetitiveness of very high bandwidth satcoms will only increase further as more new entrants join the
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Business Aviation satcom connectivity market. (The same goes for air-toground systems too). “Competition will make it more palatable for high-bandwidth systems to be installed in smaller aircraft,” he predicts. “Today, we’re seeing it [being installed in aircraft] down below Bombardier Globals, into Bombardier Challengers.” Of course, Gogo is reacting to the growing cabin connectivity competition. “Duncan Aviation is partnering with Gogo and is providing engineering and certification services for completion of the first-article Supplemental Type Certification (STC) for the Gogo 5G system,” Pollard says. “Duncan Aviation will use the experience and data from certifying the first article to modify all of its fullequipment AVANCE L5 STCs to include Gogo 5G, which will cover more than 30 aircraft models,” enhancing the in-flight connectivity experience for passengers.
Tips on Lighting
Brightness, quality and passenger control of cabin lighting are increasingly important considerations for owners and operators of business aircraft operated on charter services. “The lighter the cabin is, the better,” says Zipkin. “New charter customers are usually not accustomed to being in a smaller airplane. The better the lighting, the more you can 70 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
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surmount” the feeling passengers have of being in a small cabin environment. “LED lighting is the way it is going,” Zipkin notes. “It is very, very nice to have in business jets. You get very much more longevity of components.” Kliethermes agrees. “LED lighting is huge – all the old fluorescent lighting is being replaced. We’re seeing brighter lighting and brighter cabins.” Moreover, Kliethermes is “seeing requests grow to handle lighting via phone apps, even for changing the coloring of the lighting — and even for some charter aircraft”. Interest from charter owners and operators in passengers being able to control cabin lighting levels and colors using their mobile phones “probably lags behind private [Part 91] a bit, but it’s a simple app download when you get on the aircraft. “We’re definitely seeing that more and more,” he continues. “It’s not a first-time [customer] thing. But then, the customer becomes a long-term client and wants a particular aircraft because of the [lighting] options.”
Tips on Furniture and Fittings
Cabin furniture materials and finishes are highly important considerations for owners buying aircraft that will be made available for charter operations. Making sure that the furniture coverings and fittings are robust, longlasting and easily maintainable is of critical importance.
The aircraft “can’t be out of service because someone spilled red wine or there’s a tear” in the seat cover or carpet, says Kliethermes. Owners should bear in mind that aircraft made widely available for charters generally operate more flying hours than those operated purely on private flights. “From a charter perspective, durability is huge,” he adds. “Coloring [of furniture coverings, carpets and finishes] is important. Red wine and blue jeans are terrible for cabins.” Furniture coverings need to be made of tough materials, such as Ultraleather. Window linings also need to be made of durable materials. Carpets and furniture coverings can’t contain silk because it is too fragile – they need to be made of strong materials and they shouldn’t be light in color. So, white-leather seats are a nono, as are light-colored carpets. “There are many beautiful interiors you can’t maintain for a charter aircraft,” says Zipkin. “It needs to be hard-wearing. A good refurbishment shop can provide insight into what wears well and what does not.” High-polish veneers on wooden panels are not good from a maintainability perspective, he warns. Additionally, “an innocuous interior allows the aircraft to age well from a style standpoint”. Neutral cabininterior colors — particularly “earth tones,” are best, says Kliethermes.
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“Another often-overlooked feature on charter aircraft is the configuration of the main entry door and stairway...“
Tips on the Galley
Highly equipped galleys usually aren’t necessary in smaller aircraft operating US domestic charters, which tend to comprise under three hours’ flight duration, according to Zipkin. “In the US domestic market, people are less demanding than in the international market.” Kliethermes says that, “on normal aircraft for Part 135 charters, as long as there is a decent microwave [cooker], coffee, beverages and the ability to take care of catering”, those necessities will amply suffice for most charter passengers. “Even on [US] transcontinental flights, 90% of clients will be comfortable with the standard galley offering. The other 10% will search for their jets accordingly.” But for “flights of five hours or more, there is a different expectation,” Kliethermes adds. “There will be differences in how you store beverages and prepare food, etc.” This is particularly true for aircraft operated on long-haul international charters and in markets outside North America. Pollard agrees. “A lot depends on the mission, cabin size, and passenger count. Ovens, microwaves, wine 72 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
coolers, coffee makers and espresso machines are all amenities that can be combined into the functional and beautiful galleys found in today’s business jet cabins.” These features are very popular with charter passengers and aircraft owners alike, she notes.
Cabin Storage, Baggage Capacity, Lavatories and Aircraft Access
Owners and operators of aircraft used for charter flying also have to take into account several other equipment factors that can strongly impact the desirability of an aircraft for charter operations, says Pollard. For instance, “While cabin storage isn’t as much of a challenge on Super Mid-Size or Large Jets, it can be a real issue on Light and Mid-Size Jets,” she says. Duncan Aviation often reconfigures cabinets to allow for more efficient storage of catering and cabin supplies. “Well-designed galley and lavatory storage can reduce cabin clutter and enable operators to stock a wider range of catering and passenger amenities, thereby improving the passenger experience,” Pollard adds. “Internal and external baggage
capacity is also a key factor for charter aircraft,” she continues. “Passengers are not always familiar with the size of aircraft baggage compartments, so it is important for operators and brokers to explain the limitations. There's a reason that aircraft with larger baggage compartments tend to be more popular charter aircraft, particularly for Light and Mid-Size Jets. “In the charter world, not being able to fit all of a customer’s luggage is often referred to as a ‘Bagtastrophe’ and is dreaded by crew members and passengers alike. Passengers prefer aircraft that can accommodate bulky items such as golf clubs, skis, and even precious works of art.” While not a topic that commands much media discussion, “Lavatory size and functionality is important to passengers, particularly on longer missions,” Pollard notes. “There are many ways to increase the functionality of small spaces. “Pop-up lavatory storage compartments can create places to keep essentials, and luxury amenities and slight shifts in fixtures can give passengers greater access to them.” Providing sufficient washroom space to ensure passengers feel comfortable at www.AVBUYER.com
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all times, is a must, particularly for longer-haul flying.” Another often-overlooked feature on charter aircraft is the configuration of the main entry door and stairway, Pollard shares. “Aircraft with wider doors and entry steps with handrails provide easier access for the elderly, or for passengers with mobility challenges, and stand-up cabins with flat floors are very also popular features.” All of these factors increase the sense of space and relaxation for passengers.
Cabin Air Filtration and Purification Considerations
Of course, today, more than ever, owners and operators of business aircraft available for charter have to make guaranteeing the continuing health of their passengers as much of a
priority as assuring their passengers’ safety. “One of the primary reasons people choose to fly private in the age of Covid-19 is to minimize the risk of exposure to contagions,” Pollard says. Duncan Aviation and Flying Colours perform retrofit installations of Aviation Clean Air’s (ACA’s) plasma ionization cabin filtration system, and both have seen a significant increase in demand for the system. “This component is designed to work with an aircraft’s existing environmental control system as an active air- and surface-purification system,” Pollard explains. “‘Active’ means it’s not passive like an air filtration system that works only when air passes through it. As the aircraft flies, the ACA system cleans and improves air quality throughout the aircraft by disabling
CHRIS KJELGAARD has been an aviation journalist for 40 years, with a particular expertise on aircraft maintenance. He has served as editor of ten print and online titles and written extensively on many aspects of aviation. He also copy-edits most major documents published by a global aviation industry trade association.
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harmful pathogens and neutralizing odors and allergens. Charter clients frequently ask their providers what measures are being taken to combat the spread of Covid, and measures like this provide an added level of comfort.”
In Summary…
So, as you will see, there are multiple areas of the cabin, cockpit and the aircraft’s exterior that an aircraft owner or operator must consider when planning to make it available for Charter. An aircraft management company or MRO center will be able to talk these through with you in greater detail to ensure you plan and execute an aircraft refurbishment in a way that will maximizes the potential revenue you can make from your aircraft when it isn’t flying privately for you. T
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Ownership 3.qxp_Finance 21/12/2021 16:13 Page 1
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Flight Department or Management Company: Which is Best? Is it better to have your aircraft operated by an Aircraft Management company, or should you have an in-house flight department structure? The option that works best for you will typically be determined by a variety of factors, says René Armas Maes… he factors that determine whether you should use an aircraft management company or establish an in-house flight department for your aircraft’s operations are many, and include the projected number of annual flight hours, your requirement for privacy, economies of scale, asset control, team expertise, and more. If you fly more than 225 hours annually, having an inhouse flight department to operate your business jet can make financial and operational sense under the right circumstances. If you fly between 150 hours and 200 hours per year, the economics will tend to favor a management company. This creates a gray area for those with annual utilization between 200 and 225 hours per year. Either option could make sense, based on individual criteria including service level and asset control needs. With this in mind, we’ll consider the pros and cons of each option…
T
The Aircraft Management Company Option
The Pros: Owning and managing a business aircraft is logistically complex. Perhaps the biggest value an Aircraft Management company offers an aircraft owner is its ability to handle these complexities, relieving the owner of the burden of managing their own business aircraft. Management companies also offer operational flexibility in terms of sourcing flight crews, aircraft maintenance, flight planning, and more. The use of an Aircraft Management company will also increase flexibility in terms of supplemental lift, and provision of 76 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
aircraft on ground (AOG) support. If your aircraft becomes unavailable (due, for example to a maintenance event), an Aircraft Management company can provide a replacement jet, since they typically have a large fleet of aircraft available to them. Likewise, if an aircraft owner occasionally requires the use of multiple aircraft on a single day, the management company will be able to accommodate the need. And then there are the ‘economies of scale’ to consider. Larger Aircraft Management companies buy in larger quantities than individual aircraft owners, so their buying-power is stronger and cost savings can be leveraged. An Aircraft Management company can pre-screen and hire dedicated personnel to operate your aircraft, and many will also involve you in shortlisting and recruiting dedicated flight and cabin crew personnel. Operating under strict policies and procedures – including risk management, safety, and standard operational procedures – an Aircraft Management company may well raise the bar on safety and operational readiness for the aircraft owner. Ultimately, an Aircraft Management company offers the possibility of a turn-key solution, bringing peace of mind to the aircraft owner, whether payroll-related, record-keeping, regulatory oversight, aircraft planning, scheduling, maintenance, or concierge services. And an Aircraft Management company can assist owners with offsetting the cost of owning a business aircraft by marketing the aircraft for charter flights under an FAA Part 135 charter certificate (see ‘Is it Worth Chartering Out My Jet’, p62 of this issue). They will bring www.AVBUYER.com
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independent expertise and advice, including knowledge and skills that may be difficult to match with an in-house flight department. The Cons: Although they offer many benefits, Aircraft Management solutions do not suit every owner. For example, ‘privacy’ and ‘asset control’ are the most common deterrents for aircraft owners. If an aircraft is enrolled on a Part 135 charter management program run by the management company, scheduling conflicts will potentially arise, and flexibility will be needed on both sides for the arrangement to work. The cost of aircraft management should be factored in an aircraft owner’s decision, too. If the owner flies more than 225 hours per year, the cost, surcharges, and fees of having the aircraft managed by a third party might not be worth considering. Finally, a lack of transparency in billing, surcharges, and accounting is sometimes cited by aircraft owners as an area that creates conflicts between them and an Aircraft Management company – especially when additional service fees are added to invoices without adequate explanation.
The In-house Flight Department Option
The Pros: Arguably the four most important benefits of operating your own flight department are: • Asset control • Trip personalization • Privacy, and • Employee engagement. www.AVBUYER.com
If an aircraft owner requires strong control over the running of their aircraft, and exclusive use of the asset, an in-house flight department is the best – and most likely only – option. Similarly, personalization, specific security requirements, and privacy needs are accommodated to the highest level with an in-house flight department. Furthermore, many aircraft owners believe that having dedicated flight crew and cabin crew on their payrolls brings a greater sense of employee pride, job security, and loyalty to the company. The pilots and flight crew are engaged in managing the end-to-end operation and its costs, which can bring further job involvement and satisfaction. The Cons: As with Aircraft Management companies, an in-house flight operation is not suitable for everyone. For example, an in-house flight department may not be cost-effective if the aircraft is not being flown enough. An in-house flight department may also not be able to offer the same variety of in-house services as an aircraft management company, including avionics, interiors, MRO, onsite parts inventory, repairs and upgrades that allow an aircraft operator to optimize dispatch reliability. And an in-house flight department will require more up-front capital expenditure, including resources for a hangar rental and crew. Sourcing appropriate scheduling and flight planning tools might also prove time-consuming and expensive.
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TABLE A: Flight Department or Management Company? Criteria Summary ()*+,-.%'/0#12$' 6#"7"&8$' !"#$%"#&'' 3%4&"$5%)$' 9&)&1%5%)$' !"#$%&'(()#&*"+#,"%& -)(& ."& *,)/&0$12%2$,2#3& -)(& ."#&'%/$3(& 4,25$63&$+7&8)69,2#3& :2;<)(#& 0$2,& 8),526)&=)5)%& :2;<)(#& >""7& 0%)?2@2%2#3& :2;<)(#& A$,2)(& *$B2#$%&C?B)+72#9,)& :2;<)(#& ="/& C6"+"13&"D&86$%)& ."& -)(& 'E>F&89BB",#& ."#&'%/$3(& -)(& '2,6,$D#&89BB%)1)+#$%& ."& -)(& 0'G&4$,#&HIJ&*"(#&EDD()#& KD&',,$+;)7& -)(& 4)$6)&"D&L2+7&'2,6,$D#&EB),$#2"+& ."#&'%/$3(& >9$,$+#))7& Source: Consultant analysis. *AOG - Aircraft on the Ground
Ultimately, the long-term cost savings of operating an in-house flight department, as opposed to an Aircraft Management company, may only materialize over a longer timeframe.
In Summary…
As demonstrated, both third-party aircraft management companies and in-house flight departments offer benefits. Aircraft owners need to do their homework, defining what operational and financial criteria they value the most while choosing a solution. Table A offers a high-level criteria summary for this. It is worth noting that I have seen multiple aircraft
Management company can pre-screen and hire dedicated personnel...”
owners choose to join forces and set up dedicated in-house flight departments between them. The idea of shared cost for hangar and office space, ground support equipment, and other sundry items is appealing in such cases. The down-side of having multiple aircraft owners under one flight department roof is the extra complexity – particularly when the criteria one owner values the most differs substantially from the others. Ultimately, the question of whether an aircraft owner should go down the flight department or aircraft management company route is not only strategic, but also highly tailored and individualized. T
RENÉ ARMAS MAES is Vice President Commercial at Jet Link International LLC, an international aviation consultancy. He has built a successful track record for delivering Business Aviation consulting projects for Fortune 500 companies, Venture Capital firms, and HNWIs in North America, the Middle East, Europe and Latin America. His expertise includes corporate travel assessments, business aircraft analysis, aircraft financing and sales.
78 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
“An Aircraft
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VALUES - LARGE JETS
Business Aircraft Values: The Large Cabin Choice There are occasions when the operator’s mission dictates an aircraft of larger capacity. This month our value study focuses on our definition of Large Cabin and Ultra-LongRange business jets.
T
he average Large Cabin and Ultra-Long-Range jets share more in common than they differ, with similar cabin sizes and comparable cruise speeds ranging roughly between 450-500kts. For the purpose of this month’s focus, we’ll categorise Large Cabin and Ultra-Long-Range jets under the generic category of ‘Large Cabin jets’, on the basis of their shared characteristics, and MTOWs that generally range between 38,000-100,000 pounds. Large Cabin jets have much in their favor. Seatsfull range capabilities typically go up to, and into the 6,000nm range, making these effective nonstop continent and ocean-crossing machines. The fewer the stops, the shorter the overall trip time! One disadvantage the Large Cabin jets have over their Small and Medium jet kin is their need for runways longer than 6,000ft, which restricts the number of airports they can use by comparison. Nevertheless, for the trans-oceanic traveller, the advantages offered by these airplanes far outweigh the negatives. Where the Large Cabin airplanes really excel (as the name would suggest) is in their cabin capacities. A cabin will typically stretch from 30-40 feet or more, enabling operators to enjoy a wider array of finishing options and office capabilities than jets in the smaller segments can provide.
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Cabin heights in excess of six feet guarantees stand-up cabin comfort, while seating capacity of 8-18 is typical. Naturally, the size and range capabilities of Large Cabin jets don’t come cheaply, and you’ll need a larger fuel budget, more hangar space and a larger maintenance budget. Yet for the company with the need, the Large Cabin jet will rarely prove too small, and only occasionally be too large for an airport you’d prefer to access. In these situations, supplemental charter is the answer.
Large Cabin Jet Price Guide
The following Large Jets’ Average Retail Price Guide represents current values published in the Aircraft Bluebook–Price Digest. The study spans model years from 2002 through Winter 2021. Each reporting point represents the current average retail value published in the Aircraft Bluebook by its corresponding calendar year. For example, the Bombardier Challenger 650 values reported in the Winter 2021 edition of the Bluebook show $15.0m for a 2017 model, $14.0m for a 2016 model and so forth. Aircraft are listed alphabetically. With the reader’s knowledge of aircraft, equipment, range and performance, the following Guide allows the reader to determine the best value aircraft for consideration.
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VALUES - LARGE JETS
Large Jets: Average Retail Price Guide MODEL YEAR $
2021 US$M
2020 US$M
2019 US$M
2018 US$M
2017 US$M
2016 US$M
2015 US$M
32.4
20.0
17.0
16.0
15.0
14.0
13.0
2014 US$M
2013 US$M
2012 US$M
MODEL BOMBARDIER CHALLENGER 850ER BOMBARDIER CHALLENGER 650
10.0
BOMBARDIER CHALLENGER 605
-
-
9.0
9.5
9.0
10.5
10.0
9.5
10.5
10.0
12.0
11.5
BOMBARDIER CHALLENGER 604 BOMBARDIER CHALLENGER 350
26.7
17.0
16.0
14.5
13.0
12.5
BOMBARDIER CHALLENGER 300 BOMBARDIER GLOBAL 7500
75.0
68.0
60.0
BOMBARDIER GLOBAL 6500
56.0
44.0
40.0
BOMBARDIER GLOBAL 6000
62.3
37.0
33.0
29.0
27.0
25.0
23.0
21.0
19.0
17.0
BOMBARDIER GLOBAL 5500
46.0
35.0
BOMBARDIER GLOBAL 5000
50.4
33.0
27.0
24.0
21.0
19.0
17.0
15.0
13.0
12.0
BOMBARDIER GLOBAL EXPRESS XRS
16.5
BOMBARDIER GLOBAL EXPRESS DASSAULT FALCON 8X
60.0
50.0
43.0
39.0
37.0
36.0
DASSAULT FALCON 7X
53.8
37.0
34.0
30.0
28.0
25.0
24.0
22.0
21.0
20.0
DASSAULT FALCON 900LX
44.0
33.0
29.0
25.5
23.5
21.5
20.5
19.5
18.5
17.5
35.1
28.0
26.0
24.0
22.0
20.5
19.5
18.5
DASSAULT FALCON 900EX EASy DASSAULT FALCON 900EX DASSAULT FALCON 900DX DASSAULT FALCON 900C DASSAULT FALCON 2000LXS DASSAULT FALCON 2000LX
17.0 17.0
DASSAULT FALCON 2000S
28.8
25.0
15.0
21.0
19.0
18.0
17.0
16.0
14.0
12.0
39.0
36.0
34.0
30.0
26.0
24.0 22.0
20.0
19.0
18.0
17.0
16.0
15.0
14.0.
13.0
12.0
12.0
10.0
9.0
7.5
DASSAULT FALCON 2000EX EASy DASSAULT FALCON 2000EX DASSAULT FALCON 2000DX EASy DASSAULT FALCON 2000 EMBRAER LINEAGE 1000E EMBRAER LINEAGE 1000 EMBRAER LEGACY 650/E EMBRAER LEGACY 600 EMBRAER LEGACY 135BJ GULFSTREAM G650/ER
70.5
59.5
GULFSTREAM G600
58.5
50.0
GULFSTREAM G550
36.0
GULFSTREAM G500 (NEW MODEL)
48.5
41.0
50.0
41.0
39.0
37.0
35.0
33.0
32.0
30.0
28.0
25.0
23.0
21.0
37.0
35.0
31.0
29.0
48.0 19.0
GULFSTREAM G500 (OLD MODEL)
18.0 14.0
GULFSTREAM G450 GULFSTREAM G400
19.0
17.0
16.0
GULFSTREAM G350
15.0
14.0
13.0 9.5
GULFSTREAM G300 GULFSTREAM GV GULFSTREAM GIV-SP AIRCRAFT BLUEBOOK DATA - CHRIS REYNOLDS, EDITOR. EMAIL: CHRIS.REYNOLDS@INFORMA.COM
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What your money buys today
Winter 2021 2011 US$M
2010 US$M
2009 US$M
2008 US$M
2007 US$M
2006 US$M
8.0
7.0
6.0
5.0
4.0
3.0
2005 US$M
2004 US$M
2003 US$M
2002 US$M
MODEL YEAR $ MODEL BOMBARDIER CHALLENGER 850ER BOMBARDIER CHALLENGER 650
8.5
8.0
7.5
7.0
6.5
BOMBARDIER CHALLENGER 605
5.6
5.3
5.0
4.7
4.4
7.0
6.5
6.0
5.5
5.0
4.2
BOMBARDIER CHALLENGER 604 BOMBARDIER CHALLENGER 350
9.0
8.5
8.0
7.5
BOMBARDIER CHALLENGER 300 BOMBARDIER GLOBAL 7500 BOMBARDIER GLOBAL 6500 BOMBARDIER GLOBAL 6000 BOMBARDIER GLOBAL 5500
11.0
10.0
9.0
8.0
7.0
6.5
15.5
14.5
13.5
12.5
11.5
10.5
6.0
BOMBARDIER GLOBAL 5000
9.5 8.0
BOMBARDIER GLOBAL EXPRESS XRS 7.5
7.0
6.5
BOMBARDIER GLOBAL EXPRESS DASSAULT FALCON 8X
18.0 16.5
17.0
16.0
15.0
14.0
13.5
13.0
12.5
DASSAULT FALCON 7X
15.5 14.0 12.0
DASSAULT FALCON 900LX
11.5
11.0
10.5
12.0 9.5
11.0
10.0
9.0
DASSAULT FALCON 900EX EASy
8.5
8.0
6.0
5.8
8.5 6.4
DASSAULT FALCON 900EX DASSAULT FALCON 900DX
6.2
DASSAULT FALCON 900C DASSAULT FALCON 2000LXS
13.0
11.0
DASSAULT FALCON 2000LX DASSAULT FALCON 2000S 10.0
9.5
8.5
8.0
8.5
8.0
7.5
7.0 6.0
9.0
DASSAULT FALCON 2000EX EASy 5.5
DASSAULT FALCON 2000EX DASSAULT FALCON 2000DX EASy 4.0
DASSAULT FALCON 2000 EMBRAER LINEAGE 1000E
18.0
16.0
10.0
9.0
-
7.0
14.0
EMBRAER LINEAGE 1000 EMBRAER LEGACY 650/E
6.5
6.0
5.5
EMBRAER LEGACY 600 5.0
4.5
4.0
3.7
3.5
EMBRAER LEGACY 135BJ GULFSTREAM G650/ER GULFSTREAM G600
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0
9.0
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
12.0
11.0
10.0
9.0
8.5
7.5
6.5
GULFSTREAM G550 GULFSTREAM G500 (NEW MODEL) GULFSTREAM G450
7.5 8.5
8.0
7.5
7.0
6.5
6.0
GULFSTREAM G500 (OLD MODEL)
7.0
GULFSTREAM G400
5.5
GULFSTREAM G350 5.0
4.5
GULFSTREAM G300 9.0
GULFSTREAM GV
5.1
GULFSTREAM GIV-SP
AIRCRAFT BLUEBOOK DATA - CHRIS REYNOLDS, EDITOR. EMAIL: CHRIS.REYNOLDS@INFORMA.COM
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JET COMPARISON
CESSNA CITATION CJ4 GEN2
Jet Comparison: Cessna Citation CJ4 Gen2 vs Embraer Phenom 300E How do the Cessna Citation CJ4 Gen2 and the Embraer Phenom 300E Light Jets compare side-by-side? What are the pros and cons offered by each model? Mike Chase analyses them side-by-side…
O
ver the following paragraphs we’ll consider key productivity parameters for the Cessna Citation CJ4 Gen2 and the Phenom 300E, including payload, range, speed, and cabin size, to establish which aircraft provides the best value in the Light
Jet market. Does a higher purchase price with lower operating (per mile) costs drive a purchase decision? It is hoped that the following jet comparison will help clarify.
Cessna Citation CJ4 Gen2
As Cessna’s largest and most capable CitationJet model, the Cessna Citation CJ4, offered a longer cabin and range compared to other Citation Jet models. It also differed from the previous models through its moderately swept wing design, which it borrowed from the larger Citation Sovereign. The first flight of the Citation CJ4 took place on May 5, 2008 with deliveries beginning in 2010. It is powered by two Williams International FJ44-4A engines each offering 3,621lbst, and proved popular with new and pre-owned aircraft buyers alike. The Citation CJ4 Gen2 was introduced in 2021, and began
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EMBRAER PHENOM 300E
deliveries a few months later. The CJ4 Gen2 is equipped with enhanced features, including new folding airstairs with a lower step to the ground, step lighting, and handrail; added seating options; new ambient lighting; skylights in the lavatory; and a galley with improved storage. As of this writing, there were 20 Cessna Citation CJ4 Gen2 business jets in operation worldwide (all wholly-owned), with 17 (85%) units based in the US.
Embraer Phenom 300E
Introducing a new interior design and avionics, the Embraer Phenom 300E represented a significant upgrade over the original Phenom 300 when it entered the market in 2018. Powered by a pair of Pratt & Whitney Canada PW535-E1 turbofan engines, each producing 3,478lbst, the Phenom 300E is equipped with a Prodigy Touch Flight Deck with Garmin 3000 avionics. As of this writing, 148 Phenom 300E business jets had been delivered worldwide, though 100 (68% of the fleet) were based in the United States. Breaking the fleet down, there were 135 wholly-owned aircraft, nine fractionally-owned, and four more in shared ownership. www.AVBUYER.com
AirCompAnalysisJAN22.qxp_ACAn 22/12/2021 11:39 Page 2
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CESSNA
EMBRAER
Citation CJ4 Gen2
Phenom 300E
vs.
(Produced 2021 to Present)
(Produced 2018 to Present)
HOW MANY
9
$10.75 Million (2021 Model)
EXECUTIVE
7
SEATS
$9.65 Million (2021 Model)
WHICH OF THESE LIGHT JETS WILL COME OUT ON TOP? HOW FAR
CAN WE GO? 4 Pax with Available Fuel Citation CJ4 Gen2
1,927nm 2,010nm
Phenom 300E
HOW MANY
UNITS IN
OPERATION?
WHAT’S THE
HOW MUCH
PAYLOAD CAN WE TAKE?
Citation CJ4 Gen2
LONG RANGE (Lbs)
2,220
Phenom 300E
2,636
HOW MANY
NEW/USED JETS SOLD EACH MONTH?
20 5 (0.7%)
CRUISING SPEED? Citation CJ4 Gen2
(Knots) 377 385
Phenom 300E
WHAT’S THE
COST
PER HOUR?
2 (10%)
148
Citation CJ4 Gen2 Phenom 300E
$1,153 $1,192
12-Month Average Figure Sources used: JETNET, B&CA and Chase & Associates.
(% = Global Fleet For Sale)
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JET COMPARISON
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Table A - Payload & Range Comparison Payload & Range Comparison
Citation CJ4 Gen2 Embraer Phenom 300E
17,110 18,552
5,828
5,404
Max Fuel (lb)
MTOW (lb) Source: OEMs, B&CA
2,220
2,636
Max Payload (lb)
1,122
1,586
Avail Payload w/Max Fuel (lb)
1,425
1,381
Max Payload w/Avail Fuel IFR Range (nm)
1,312 1 334
When comparing business jets, an important area for potential owners and operators to focus on is the payload capability, and especially the ‘Available Payload with Maximum Fuel’. Table A (left) shows the Phenom 300E has a greater ‘Available Payload with Maximum Fuel’, at 1,586lbs. By comparison, the Cessna Citation CJ4 Gen2 offers 1,122lbs.
Cabin Cross-Section Comparison
Chart A - Cabin Cross-Section Comparison
4.83 ft
5.10 ft
4.90 ft
Embraer Phenom 300E
4.75 ft
Cessna Citation CJ4 Gen2
Source: UPCAST JETBOOK
Chart A (left) depicts the cabin crosssections side-by-side and shows the Phenom 300E offers greater cabin height (4.9ft vs 4.75ft) and width (5.1ft vs 4.83ft) than the Citation CJ4 Gen2. However, the net cabin lengths of both business jets are almost the same - with the Citation CJ4 Gen2 offering 17.3ft, compared to the Phenom 300E’s 17.2ft. The greater cabin width and height for the Phenom 300E provides more overall cabin volume (324cu.ft. vs 293cu.ft.), factoring the net main seating area, but excluding the lavatory. Configured with executive seating, the Citation CJ4 Gen offers seating for up to nine passengers with two crew. The Phenom 300E accommodates seven seats with two crew. The Phenom 300E provides more internal (10cu.ft.) and external luggage volume (74cu.ft) compared to the Citation CJ4 Gen2 (7cu.ft. internal and 71cu.ft. external).
Range Comparison
Chart B - Range Comparison Citation CJ4 Gen2 Phenom 300E
1,927 (nm) 2,010 (nm)
w/4 Pax w/4 Pax
Using Wichita, Kansas as the start point, Chart B (left) shows the Embraer Phenom 300E has a range of 2,010nm with four passengers and available fuel – which is 83nm more than the Cessna Citation CJ4 Gen2 at 1,927nm. Note: For business jets, ‘Four Pax Range’ represents the maximum IFR range of the aircraft at long range cruise. The NBAA IFR fuel reserve calculation is for a 100nm FAR Part 23 or 200nm FAR Part 25 alternates. This range does not include winds aloft or any other weather-related obstacles.
Powerplant Details
Source: Chase & Associates
86 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
The Cessna Citation CJ4 Gen2 has two Williams International FJ44-4 engines producing 3,621lbst each. These burn 172 gallons of fuel per hour. The Embraer Phenom 300E has two Pratt & Whitney PW535-E1 engines, providing 3,478lbst each, burning 169gal/hr of fuel.
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The Private Jet Company December.qxp_Layout 1 23/12/2021 10:18 Page 1
2004 Citation CJ2
5,800 Hours, Engines enrolled on Tap Elite Blue, Airframe enrolled on Proparts, Winglets, WiFi, 2015 Paint, 2017 Interior, Make Offer
2000 Challenger 604 S/N 5447
15,286 Hours, Engines Enrolled on GE On Point, APU Enrolled on MSP Gold, Airframe Enrolled on Smart Parts, GoGo ATG-5000 WIFI, Make Offer
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JET COMPARISON
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Chart C – Cost Per Mile Comparison Cost per Mile Comparison
Citation CJ4 Gen 2
Chart C (left) details the ‘Cost per Mile’, comparing the Citation CJ4 Gen2 and Phenom 300E, and factoring direct costs with both aircraft flying a 1,000nm mission with an 800lbs (four passengers) payload. The Phenom 300E has a higher cost per mile at $3.92 per nautical mile, which is 7.1% more per mile than the Citation CJ4 Gen2 ($3.66 per nautical mile).
$3.66
Phenom 300E
$3.92 $2.00
$0
$4.00
$6.00
US $ per nautical mile
Variable Cost Comparison
* Based on a 1,000nm mission Source: JETNET
The ‘Variable Costs’, illustrated in Chart D (left), are defined as the estimated cost of fuel, maintenance labor, scheduled parts, and miscellaneous trip expenses (e.g., hangar, crew and catering). These costs DO NOT represent a direct source into every flight department and their trip support expenses. For comparative purposes, the costs presented are the relative differences, not the actual differences, since these may vary from one flight department to another. The Cessna Citation CJ4 Gen2 ($1,153/hr.) has a lower variable cost than the Embraer Phenom 300E ($1,192/hr.) – a difference of $39 (3.3%) per hour.
Chart D – Variable Cost Comparison
Citation CJ4 Gen2
$1,153
Phenom 300E
$1,192 $0
$500
$1,000
Market Comparison Table
Table B (left) contains the new prices (per B&CA) for a 2021-model Cessna Citation CJ4 Gen2 and Embraer Phenom 300E ($10.750m and $9.650m, respectively – a difference of $1.1m). Also, listed are the long-range cruise speed and range numbers (per B&CA), while the number of aircraft inoperation, the percentage for sale, and average sold are from JETNET. There were two Citation CJ4 Gen2 jets ‘for sale’ on the pre-owned market at the time of writing, representing 10% of the fleet, according to JETNET. Just one of the 148 Phenom 300E fleet was available “for sale”. Meanwhile, the average number of new and used transactions per month over the previous 12 months averaged two, for the Citation CJ4 Gen2, and five for the Phenom 300E.
$1,500
US $ per hour Source: JETNET
Table B - Market Comparison Table
Citation CJ4 Gen2 Phenom 300E
Maximum Scheduled Maintenance Equity 377
385
Long Range Cruise Speed (Kts)
293
324
Cabin Volume Cu Ft
1,927 2,010 4 Pax w/Avail Fuel IFR Range (nm)
$10.750 $9.650 Price New (2021 Model), per B&CA
*Average Full Sale Transactions in the past 12 months as of Nov. 2021; Source: JETNET Data courtesy of B&CA ; JETNET
88 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
20
148
In Operation
10%
<1%
% For Sale
0%
22
5
New/Used Average Sold per Month*
Chart E and Chart F (overleaf) display the Cessna Citation CJ4 Gen2 and Embraer Phenom 300E, respectively. They depict (and project) the Maximum Maintenance Equity each jet has available, based on its age. • The Maximum Maintenance Equity figure was achieved the day an aircraft
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Recent Transactions by Leading Edge Leading Edge has just completed its 61st aircraft transaction since the beginning of 2020
• 27 Gulfstreams • 10 Citations • 8 Global/Challengers • 4 Hawkers
• 4 Turbo Props • 2 Falcons • 6 Others
Leading Edge Aviation Solutions is one of the world’s premier private aviation brokers/dealers with 926 aircraft transactions, 50+ years of experience and over $10B worth of aircraft transactions. Not just aircraft brokers, we offer a deep suite of services that can be employed long before and long after any aircraft transactions are contemplated. Contact us to learn more about what Getting The Edge can do for you
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JET COMPARISON
Chart E - Maximum Scheduled Maintenance Equity Citation CJ4 Gen2 Assumed Annual Utilization: 311 Flight Hours Average Maximum Maintenance Equity: $1,804,337
•
Pct of Max Mtnc Equity
Pct of Avg Max Mtnc Equity vs. Aircraft Age 100% 90% 80% 70% 60% 50%
Depreciation Schedule
40% 30% 20%
2
1
4
3
5
7
6
8
9
10
12
11
14
13
15
Aircraft Age (Years) Source: Asset Insight (www.assetinsight.com)
Chart F - Maximum Scheduled Maintenance Equity Phenom 300E Assumed Annual Utilization: 230 Flight Hours Average Maximum Maintenance Equity: $2,811,275 Pct of Avg Max Mtnc Equity vs. Aircraft Age 100%
90%
Pct of Max Mtnc Equity
came off the production line (since it had not accumulated any utilization toward any maintenance events). The percent of the Maximum Maintenance Equity that an average aircraft will have available, based on its age, assumes: - Average annual utilization of 311 flight hours (in the case of the CJ4 Gen2), and 230 flight hours (in the case of the Phenom 300E); and - All maintenance is completed when due.
80%
70%
60%
50%
40%
1
2
3
4
5
7
6
8
9
10
11
12
14
13
15
Aircraft Age (Years) Source: Asset Insight (www.assetinsight.com)
Table C - Cessna Citation CJ4 Gen2 Sample MACRS Depreciation Schedule 2021 Citation CJ4 Gen2 - Private (Part 91) Full Retail Price - Million $10.750m 1
2
3
4
5
6
Rate (%)
20.0%
32.0%
19.2%
11.5%
11.5%
5.8%
Depreciation ($M)
$2.150
$3.440
$2.064
$1.238
$1.238
$0.619
Depreciation Value ($M)
$8.600
$5.160
$3.096
$1.858
$0.619
$0.000
Cum. Depreciation ($M)
$2.150
$5.590
$7.654
$8.892
$10.131
$10.750
Year
2021 Citation CJ4 Gen2 - Charter (Part 135) Full Retail Price - Million $10.750m 1
2
3
4
5
6
7
8
Rate (%)
14.3%
24.5%
17.5%
12.5%
8.9%
8.9%
8.9%
4.5%
Depreciation ($M)
$1.536
$2.633
$1.880
$1.343
$0.960
$0.959
$0.960
$0.479
Depreciation Value ($M)
$9.214
$6.581
$4.701
$3.358
$2.398
$1.439
$0.479
$0.000
Cum. Depreciation ($M)
$1.536
$4.169
$6.049
$7.392
$8.352
$9.311
$10.271
$10.750
Year
Aircraft that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, taxpayers can use accelerated depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period. In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favorable Alternative Depreciation System (ADS), based on a straight-line method meaning that equal deductions are taken during each year of the applicable recovery period. In most cases, recovery periods under ADS are longer than recovery periods available under MACRS. There is a variety of factors that taxpayers must consider in determining if an aircraft may be depreciated, and, if so, the correct depreciation method and recovery period that should be utilized. For example, aircraft used in charter service (i.e. Part 135) are normally depreciated under MACRS over a seven-year recovery period, or under ADS using a twelve-year recovery period. Aircraft used for qualified business purposes, such as Part 91 business use flights, are generally depreciated under MACRS over a period of five years or by using ADS with a seven-year recovery period. There are certain uses of the aircraft, such as non-business flights, that may have an impact on the allowable depreciation deduction available in any given year. The US enacted the 2017 Tax Cuts & Jobs Act into law on December 22, 2017. Under the Act, taxpayers may be able to deduct up to 100% of the cost of a new or pre-owned aircraft purchased and placed in service before January 1, 2023. This 100% expensing provision is a huge bonus for aircraft owners and operators. After December 31, 2022 the Act decreases the percentage available each year by 20%
Source: Aircraft Bluebook
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Asking Prices & Quantity
As mentioned, as of this writing, there were two pre-owned Cessna Citation CJ4 Gen2 business jets on the market, both with sales pending. The one Embraer Phenom 300E on the used market also had a sale pending. While each aircraft serial number is unique, the Airframe Total Time (AFTT) and age/condition will cause great variation in the price of a specific aircraft – even between two aircraft from the same year of manufacture. The final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.
Productivity Comparison
The points in Chart G (right) are centered on the same aircraft. Pricing used in the horizontal axis is as published in B&CA. The productivity index requires further discussion since the factors used can be somewhat arbitrary. Productivity can be defined (and it is here) as the multiple of three factors: 1. Four Passenger Range (nm) with available fuel 2. The long-range cruise speed flown to achieve that range 3. The cabin volume available for passengers and amenities
Others may choose different parameters, but serious business aircraft buyers are usually impressed with price, range, speed, and cabin size. The Embraer Phenom 300E offers a higher speed, larger cabin volume, greater ‘Available Payload with Maximum Fuel’, and
2021 Phenom 300E - Private (Part 91) Full Retail Price - Million $9.650 Year
1
Rate (%)
Depreciation ($M)
Depreciation Value ($M) Cum. Depreciation ($M)
20.0%
$1.930 $7.720 $1.930
19.2%
$3.088
$1.853
$1.112
$1.112
$5.018
$6.871
$7.982
$9.094
$2.779
$4.632
6
11.5%
11.5%
5.8%
$0.556
$0.556
$1.668
$0.000 $9.650
Full Retail Price - Million $9.650 Year
1
Rate (%)
14.3%
2
3
24.5%
17.5%
5
4
8.9%
12.5%
6
8.9%
7
8
8.9%
4.5%
Depreciation ($M)
$1.397
$2.363
$1.688
$1.205
$0.862
$0.861
$0.862
$0.430
Cum. Depreciation ($M)
$1.379
$3.742
$5.430
$6.635
$7.497
$8.358
$9.220
$9.650
Depreciation Value ($M)
$8.271
$5.908
$4.220
$2.153
$3.015
$1.292
$0.430
$0.000
Source: Aircraft Bluebook
Chart G - Productivity Comparison $20.0 $15.0
2021 Citation CJ4 Gen2
$10.0
2021 Embraer Phenom 300E
$5.0 $0.0 0.000
0.100
0.200
0.300
0.400
0.500
Index (Index = Speed x Range x Cabin Volume / 1,000,000,000)
marginally longer range than the Citation CJ4 Gen2. The Cessna Citation CJ4 Gen2 cost just over $1m to buy new (in 2021) but offered lower operating costs than the Phenom 300E (3.3% lower hourly variable operating cost, and 7.1% lower cost per mile). It remains to be seen how the impact of depreciation will play out with the Citation CJ4 Gen2 as it matures and a pre-owned market is firmly established. Prospective buyers of one of these Light Jets would need to weigh the capabilities of each jet very carefully against their specific
MIKE CHASE Mike’s analytical and consultancy services are highly valued within the Business Aviation industry. He is founder and president of Chase & Associates, and works closely with several respected sources to compile his unique Aircraft Comparative Analysis features. Contact Mike via mike@avbuyer.com
w www.AVBUYER.com
5
4
3
2
32.0%
2021 Phenom 300E - Charter (Part 135)
Prices (millions)
to depreciate qualified business jets until December 31, 2026. Table C (bottom, left) depicts an example of using the MACRS schedule for a 2021model Citation CJ4 Gen2 in private (Part 91) and charter (Part 135) operations over fiveand seven-year periods. The price is as published by B&CA at the time of writing. Table D (right) depicts an example of using the MACRS schedule for a 2021edition Phenom 300E in private (Part 91) and charter (Part 135) operations over five- and seven-year periods. The price is per B&CA at the time of writing.
Table D - Embraer Phenom 300E Sample MACRS Depreciation Schedule
mission need to determine which one is the best fit for their flight operations. Within these paragraphs we have touched upon several of the attributes that business jet operators value, although there are other qualities, such as airport performance, terminal area performance and time-to-climb that might factor in a buying decision. Ultimately, there is plenty for a prospective buyer to consider when deciding which performance criteria is better suited to them in an aircraft. Both business jets offer great value in the market today. T
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AIRPLANE UPDATE
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Epic E1000 GX Replaces Epic E1000 aving featured the Epic E1000 single-engine turboprop in a recent Turboprop Comparison (November issue, p70), in the interests of clarity it is important for AvBuyer to specify that Epic received FAA Type Approval for its next generation E1000 GX model in mid-2021 starting with serial number K011 and up. The company subsequently stopped producing the original E1000 model, and is today producing the E1000 GX model with a range of upgrades. The new Epic E1000 GX is equipped with the Garmin GFC 700 Automated Flight Control System and the Hartzell 5-Blade Composite Propeller, offering improved performance, safety, comfort and versatility, Epic Aircraft says. “The Garmin GFC 700 [offers] full integration with our G1000 NXi-equipped flight deck, along with impeccable ease of use and advanced safety features,” notes Doug King, CEO of Epic. “It’s a perfect upgrade to our world-class line of E1000 aircraft.”
H
The Garmin GFC 700 is an advanced Attitude & Heading Reference System (AHRS)-based flight control system, providing flight director, autopilot, yaw damper, automatic trim capabilities, emergency descent protection, coupled go around and more, all intended to inspire confidence and ensure safe, smooth flight operations. “We are also seeing benefits from the Hartzell 5-blade propeller, including improved speed, climb, range, payload and
take-off performance,” King adds. “Plus, we are experiencing quieter operations inside and outside the cabin.” The Hartzell 5-blade propeller provides stronger, composite resin-injected blades that allow for a thinner, wider airfoil which optimizes flight performance, offering faster take-off acceleration and enhanced speed, versatility and comfort. Offering a generous 18 cubic feet of internal baggage space, fully fuelled the Epic E1000 GX provides an impressive range and is a truly competitive airplane in the single-engine turboprop market. Powered by the Pratt & Whitney 1,200horsepower PT6A-67A engine, the all-carbon fiber single-engine turboprop also delivers cruise speeds over 333 knots, climbs at 4,000 feet per minute, and operates up to 34,000 feet, with a maximum payload over 2,200 pounds and a full fuel payload of 1,100 pounds. More information from www.epicaircraft.com
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File photo
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2670 hours. Air conditioning. Single/Dual pilot IFR
1490TT. Recent paint and interior. Air conditioning. Engine particle filter
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FLIGHT DEPARTMENT MANAGEMENT
Rats & Hangar Rash: Keep Your BizAv Standards High With private aviation insurance premiums growing and renewals becoming harder to get, thanks to a rise in preventable claims, what can Flight Department Managers do to uphold the highest standards? Andre Fodor provides some thoughts… ver the past 18 months there has been a huge uptick in demand for Business Aviation. The industry is straining to deliver high-quality service to new and existing customers alike. Compounding the situation is a shortage of experienced workers. This is a time when we all must be focused, vigilant, and flexible, meticulously planning ahead in great detail to maintain high standards of service. Just recently I renewed our aircraft’s insurance. Once again, I saw an increase in premiums, higher deductibles and even less coverage offered. It seems we were the ‘lucky’ ones. There are smaller, single-pilot operations which have been flatly told that non-renewal is imminent unless they fly with two equally trained-in-type pilots. And for some who are operating older aircraft, denial of renewal may well force their aged aircraft into obsolescence.
O
94 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
As I spoke to one insurance broker, he told me of ever increasing preventable claims emanating from ‘hangar rash’, damage to aircraft under tow, and maintenance mishaps. With these challenges facing our industry, we need to stay laser-sharp in preventing them from happening. But how? Perhaps these examples from my own personal experiences will help spark some ideas…
Spotting the Signs of Slipping Standards
During a busy day in our hangar, as our aircraft was being cleaned and given its post-flight check, I answered a call on my cell phone. Becoming engrossed in the call, I was painfully reminded of my immediate environment as I hit my head against the aircraft’s leading edge slats. It was a hard hit, classified as a concussion by my doctor, which required me to sit out several trips to recover. The bigger problem is that I wrote the hangar www.AVBUYER.com
Flight Dept 1.qxp_Finance 21/12/2021 15:37 Page 2
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safety standards and then broke my own guidelines. This was a clear indication that we had let our standards slip and needed to re-focus on excellence.
Don’t Compromise on Experience
Experience, or the lack of it, can also be crucial in avoiding mishaps. You may find yourself working with FBO employees that have only a few weeks of aviation exposure. This could be your wing-walker, or the person servicing the water and lavatory of your multi-million-dollar airplane. After watching some security camera footage in which a wing-walker was staring at the wingtip of an airplane, rather than the winglet extending four feet beyond it, we made a decision that our airplane should not move under tug power without someone from our team present to supervise. While the wing tip in the security footage never struck the hangar, the protruding winglet did – and it required a full (and costly) replacement. Similar challenges are applicable to maintenance and quality assurance. A colleague recently called from London having just ‘crewswapped’ into an airplane. He was doing a pre-flight check before crossing the Atlantic. www.AVBUYER.com
During that inspection, he’d found a roll of safety wire in the floor of the aft equipment bay. Unsure of whether he should just pick up the roll, continue his pre-flight, and proceed with the flight, or whether the find merited a maintenance write-up, he sought the second opinion of someone he respected. The perspective of an experienced colleague who is removed from the pressure of the moment will help you assess a situation. It may also help fill a knowledge gap, or add experience and knowhow to an ongoing discussion. In this case, we reasoned that if the roll of safety wire had been forgotten, there was a chance that something else (like a set of pliers) could also be lingering in the bay. And considering that the airplane had left the maintenance facility several weeks before this flight, who could tell if the wire moving around had caused some damage? Although we concluded that all was probably Okay, we agreed that such a find warranted calling maintenance to do a thorough inspection before flight. Nothing unusual was found, but that was preferable to encountering an otherwise undetected problem mid-Atlantic.
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FLIGHT DEPARTMENT MANAGEMENT
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“Few of us in aviation management would have thought our job descriptions made us responsible for pest control.” Oh Rats!
There had been an unusually high rain fall, which, according to the pest control guy, causes rats and other rodents to seek shelter. Unfortunately for us, they managed to gain access to our hangar where we keep our aircraft, tooling, service lifts and our very expensive Ground Power Unit (GPU). One day, when our technician attempted to power up the aircraft with the GPU, nothing happened. Inspecting it for signs of malfunction, he heard a squeak as a large rat and its entire brood emerged and fled from inside. Further inspection revealed that these rats had a healthy appetite for colorful wiring and computer cables. Weeks have passed and we are still attempting to fix the GPU. Few of us in aviation management would have
thought our job descriptions made us responsible for pest control. But then, like all things in aviation, many of us have grown to accept the many surprises as they come our way. Be prepared to expand the scope of your oversight to anticipate even some of the more unlikely mishaps occurring in your operation.
In Summary…
These are exciting times for our business, and it has been a while since we saw so much demand. That should be your cue to become safer, renewing your efforts to stay sharp and safety minded. This is achieved with a culture of self-empowerment, and a sense of ownership and pride within your team. Together, we can make our industry become a reference for high standards and great service. ❚
ANDRE FODOR With a focused approach on global excellence and creativity, Andre Fodor has managed flight operations for the U.N. and Flight Options as well as being a senior demonstration pilot and instructor for Embraer Aircraft. He is the Aviation Director for his current employer. https://www.linkedin.com/in/andrefodor/
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P R E S E N T E D
B Y
C O N C O R D E
B A T T E R Y
C O R P O R A T I O N
3 FAA APPROVED IA SEMINARS PISTON
ROTORCRAFT
TURBINE
January 13-14, 2022
January 20-21, 2022
January 27-28, 2022
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Three Tips to Reduce Your Jet Maintenance Costs Operating an aircraft for the benefit of a company doesn't cost, it pays. At least, it pays if the operation is managed properly. Dave Higdon offers three tips on managing the substantial costs of private jet maintenance. o enjoy the well-documented benefits of Business Aviation, good management of all the sundry costs is paramount. Maintenance forms a significant part of an operating budget and needs to be carefully controlled. When a business jet’s operating costs run into thousands of dollars per hour in variable costs, operators can ill-afford to neglect managing even the most mundane of costs – whether they are variable or fixed. While military planners tell us how many maintenance hours an aircraft faces for every flight hour, civilian operators seldom think of, or plan, in the same stark terms. If they did, their approach to
T
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the maintenance budget might be more carefully managed. Following, and in no particular order of importance, are three areas you could look to improve the management of your own business jet maintenance budget…
Tip 1: Predictive Maintenance Enhances Preventative Maintenance
Certain preventive maintenance must be conducted throughout an aircraft’s flying career. When diligently followed through to ensure the aircraft’s needs are always met and up-to-date, preventive maintenance can help operators avoid the sticker shock associated with an unplanned www.AVBUYER.com
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maintenance event. Preventive maintenance is also required to keep any warranties in force, so it’s certainly something to be taken very seriously. In the long run, an aircraft should run better and cost less if it is well maintained by your in-house maintenance team, or a trusted Maintenance, Repair and Overhaul (MRO) partner. But how can you enhance your preventative maintenance efforts? New and emerging predictive and prescriptive maintenance capabilities are making maintenance programs more effective, by leveraging smart machines and the industrial Internet of Things to diagnose potential problems and alert www.AVBUYER.com
maintenance teams, before they can cause significant disruption. Thus, predictive maintenance can help the maintenance technicians identify and catch possible unplanned maintenance events, enhancing the preventative maintenance process (which usually includes items checked after every flight).
Tip 2: Use Maintenance Tracking Software
Between maintaining the airframe, the powerplant system – engine, nacelles, thrust reversers, and necessary accessories – there is plenty to manage regarding the maintenance of a modern turbine business aircraft.
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“Such programs can also prove to be big money savers when an unplanned maintenance event happens.”
No wonder – given the complexity and sophistication of a business aircraft – that managing and tracking its maintenance needs is such a substantial task. Today’s operators (particularly those managing multiple aircraft) are increasingly turning to specialized computer software, or an independent maintenance-recording and management company, to help oversee their maintenance needs. Operators employing a digital storage and tracking scheme for maintenance records enjoy a distinct advantage over operators who have yet to transition from paper. Leafing through pages of paper-based logs, file folders full of reports, and purchase orders, and seeking to confirm that parts used were indeed correct, is far more timeconsuming. But aircraft maintenance tracking software is specifically designed to make this whole process more efficient. Using such a tool, operating crews can enjoy the ability to track, maintain and analyze a complete system of records. Better still, the records are accessible by more than one person at a time, eliminating choke points that occur when records, files and logs are accessible to only one person, or at one location. The time saved in searching and filing is a tangible, documentable result which can be shown to save money.
DAVE HIGDON is a highly respected aviation journalist who has covered all aspects of civil aviation over the past 36 years. Based in Wichita, he has several thousand flight hours, and has piloted pretty much everything from foot-launched wings to combat jets. Contact him via Dave@avbuyer.com
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Tip 3: Hourly Maintenance Programs
Hourly maintenance programs help remove the unpredictability of aircraft maintenance for operators. Offered by third party providers, or the equipment provider – i.e. engine or avionics OEMs – themselves, the operator is typically billed on a monthly or quarterly basis for the number of hours flown during the billing period. That amount accrues in an account. In return, the program provider delivers services that are spelt out in the contract, according to the level of coverage the owner/operator selects. However, the program provider will usually also stipulate who performs the maintenance work, with a list of approved MRO centers. Coverage may also provide AOG services for stranded aircraft, or access to a replacement aircraft or rental engines, when needed. The greater the level of coverage, however, and the more complicated the aircraft, the higher the hourly fee will be for the contracted services. Such programs can also prove to be big money savers when an unplanned maintenance event happens. Ultimately, an hourly engine program will help bring predictability to maintenance costs, enabling you to benchmark whether the costs will change monthly, quarterly, and annually – which is something the folks in accounting will certainly come to appreciate. ❚ MAKE MORE INFORMED MAINTENANCE DECISIONS with AvBUYER.com
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Understanding BizAv Avionics: Cabin Systems Ken Elliott concludes his series on the basics of Business Aviation avionics with a look at how today’s cabin systems work in tandem with an airplane’s other avionics…
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ver several articles we have covered the ins and outs of avionics in business aircraft, where it may be relevant to an aircraft owner, operator, buyer, or broker. Here, we conclude the series delving into the core category of aircraft Cabin Systems. The area of Cabin Systems joins four other avionics categories discussed, including Communication, Navigation, Surveillance (CNS), and Interactive, all of which applied to the aircraft cockpit, remote equipment, and the pilots. Cabin Systems are specific to passengers and cabin crew. In the case of ‘Interactive’, there is some connectivity between the cabin and the cockpit that will be addressed here. In the cabin there is an overlap of trade responsibility, in that some electrical aspects (lighting, galley and environmental control) are under the purview of avionics. For the purposes of this article all cabin electrical, communication, entertainment and electronics will be assumed to be ‘Cabin Systems’.
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The Cabin Evolution
Providing an insight into some of the evolutions of cabin technology, Figure 1 (overleaf) demonstrates changes on several fronts. For each, the development has occurred exponentially, providing increased capability, reliability and options for the cabin experience. Overall, there is now greater connectivity, allowing passengers to function as they would in their office or home. Another evolution is an ability to ‘wirelessly connect’ within the cabin, saving on wiring and equipment. This has further permitted the use of personal electronic devices (phones, iPads, laptops and more) to replace onboard devices and stored entertainment. Flight departments have different approaches to the cabin experience, which is essentially driven by budget, the primary purpose of the aircraft, where the aircraft will operate, priorities within the cabin, and security concerns. It is common for flight departments to limit the cabin experience, thereby reducing cyber exposure. Connecting the passengers to a head office intranet or corporate IT network has its risks, and especially the
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AVIONICS FIGURE 1: The Cabin Technology Evolution !"#$%&'()*+%,-..+//+01*-2+"%
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potential weakness of breaking into a closed system from an external (in this instance aircraft) network. Some of these concerns, and others, have applied braking to cabin systems evolution. As with cockpit systems and anything aircraft-related, the clock moves cautiously forward, ensuring safety and reliability compliance. One specific and current example of a cautious approach is the ongoing concern of potential interference from C-band 5G internet, to be introduced soon by AT&T and Verizon for terrestrial applications. The radar altimeter is a crucial navigation device on the aircraft, and it operates on the same frequency as C-band 5G. If the Cband 5G signal impacts the radar altimeter signal, the measurement of aircraft height above the ground may fluctuate, which could have disastrous consequences for the aircraft. Because of this issue, heads are now locked in discussion and the US implementation of C-band 5G is on hold. For many years there have been interference concerns when operating Bluetooth or Wi-Fi routers within the aircraft, relating to potential interference with existing aircraft electronics. Airworthiness authorities have spent years evaluating, and steadily approving, the various applications of these technologies within the cabin. 104 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Legacy versus Current Entertainment Systems
Figures 2 and 3 (below, and opposite) shows the evolution from simplicity to complexity in cabin entertainment and features. The evolution is primarily from disparate, to integrated, equipage and the use of common elements for many functions, such as a cabin data bus, touch-screen control panels, and fewer Line Replacement Units (LRUs) scattered throughout the airframe. Interestingly, more recently the introduction of wireless technology is allowing a reduction of
complexity, especially as personal devices are permitted to control multiple cabin functions. Figure 2 depicts a typical arrangement from the 1980s or 1990s. It looks busy but is simplistic in how it lacks integration, with limited equipment and capability. Figure 3, meanwhile, shows a typical arrangement found in modern business jets today. Although it still appears busy, it is more integrated, with significant capability and less onboard equipment. It also needs less wiring and fewer ‘Happy Boxes’. The ‘Happy Box’, as it is known in the
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“...there is no better place to find gadgets than within the cabin.”
times over the life of the aircraft). Today’s business aircraft are likely to roll off the production line with an all-inclusive suite of cabin electronics, often from the same manufacturer that provided the aircraft’s CNS avionics equipment. This suite will be fully-integrated within the cabin, and to the CNS as needed, including to the Satcom, and for cockpit internet or data access. While one evolution of cabin avionics is from independent to integrated, another is the replication of the home office and home theater. The latter includes
industry, is for the purpose of interfacing and converting information between incompatible systems and their functions. Note the way that nonentertainment cabin functions are shown as one output. This can be one data bus offering multiple selections for multiple cabin systems, such as temperature control or lighting. In the last century it was common for new aircraft to be delivered with sparse facilitation for passengers, only for necessary items to be added later by third parties (and then several more
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the onboard use of personal devices and laptops, sourcing and routing entertainment or the virtual office experience to installed cabin avionics. Methods of routing include wireless Bluetooth and wired HDMI.
Cabin Evolution: The Role of Passenger Expectation
The cabin evolution includes the ever-changing expectations of passengers. Apart from the ‘new and novel’, there will be a different experience anticipated for privately-owned aircraft and for fractional, managed, chartered, or leased aircraft. If the aircraft is not solely used by one owner or corporation, it is likely to be more generic, less complex, and (especially) more intuitive, enabling an easier interaction for different flyers’ experience. Non-private owners look for less that can break, be damaged, or misused. Another decider in cabin equipage is driven by the intended operation of the aircraft. Continental (North American) operations will be less reliant on satellite connectivity, preferring the less expensive and widely available Air To Ground (ATG) method of connectivity. For aircraft flying oceanic routes, a Satcom with voice and data will be necessary. To enable streaming video, the satellite system will need to support the broader bands and AVBUYER MAGAZINE Vol 26 Issue 1 2022
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faster speeds required. Table A (right) presents available and future cockpit and cabin connectivity services, with large Low Earth Orbit (LEO) constellations coming online soon. There will be several ‘large LEO’ offerings from Boeing Satellite’s Vband, to Space X’s Starlink, to Amazon’s Project Kuiper.
Pre-Owned Aircraft Cabin Systems
When purchasing a pre-owned aircraft, a cabin configuration resulting from several previous overlaid upgrades can be challenging to face. Here the buyer may find switches appearing to control nothing, or an illogical match between seat positions and controlled audio-visual features, or even unresolved functionality issues. When undertaking a pre-buy inspection, take a good look at all cabin systems. There should be no unmarked switches, and all of those that are marked should match their intended function. For any pre-buy cabin inspection, create a checklist. The list should consider: • • • • •
Functionality Physical Cosmetic Ergonomic and Environmental aspects of the cabin.
Walk up the airstair and simulate a typical flight as though you were the owner, a passenger, and then as cabin crew. For each there will be different features, functions and priorities to consider. All systems should perform as each operator would expect. Here are some examples: Owner: Check that the overall functionality fits the expectation. Does the cabin experience feel right? Does the cabin arrangement match how you, your family, or your business team expect to experience a flight? Can you control what you need or want from each seat? 106 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
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Passenger: This is where the role of the aircraft must be clear. For example, will the passengers be regular flyers, or is the aircraft to be managed, chartered, or leased? Will flights be long or short in duration? Are flights domestic or international? The overall cabin configuration must be intuitive and adequate for each passenger, aligned with where, and how the aircraft is intended to operate. Cabin Crew: If there is to be cabin crew, is the jump-seat and galley configured correctly? How does the cabin crew communicate with the cockpit, and to each passenger? Is the galley providing the services necessary to meet the expectations of each passenger? For these scenarios, a prepurchase inspection should establish the serviceability of every function.
Cabin Systems in General
When surveying an aircraft, check for potential obsolescence. A major headache for some larger legacy jets, is the lack of continued support for cabin systems. Either the system manufacturer is no longer in business, or the product line has been discontinued. Seat and zone switch-panels are perhaps the biggest victim of obsolescence. There are solutions available, but look for those that are virtual plug and play replacements. Do not blindly accept the promise of ‘plug and play’, however. The reality with every upgrade is the potential need for additional parts, equipment, labor, and wiring – because aircraft are
different to each other. While the model of aircraft can indicate identical equipage, differences occur between groups of serial numbers. While ‘plug and play’ may apply to one range of serial numbers, it may not apply to another, because the aircraft OEM elected to change the cabin arrangement at some point during the production run. As with cockpit avionics, cabin systems are ‘suite-like’ for new aircraft. It is not unusual to find most of the cabin electronics integrated into one package, installed on the production line, during ‘green aircraft’ completion. In these instances, it can be difficult to integrate your own favorite feature as an add-on to the cabin. However, integrated solutions do come with several options that are selectable from completion menus. One newer technology that seems to work around the concern of integration limitation, is the addition of ATG Wi-Fi Internet (such as Gogo Business Aviation or SmartSky Networks). This is fortunate, as many business aircraft have delivered with complex integrated cabin systems, but without highly capable internet access. These ATG technologies have their own external broadband antennas, and cabin Wi-Fi broadcast antennas. While they look for a GPS position and other aircraft performance information from existing onboard avionics, they mostly involve stand-alone systems. As a result, and because of their astounding performance and capability, they are a popular upgrade across many aircraft platforms.
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AVBUYER.com FIGURE 4: Some Cabin Functions and Either New or Popular Available Upgrades :6;"&):.&%1.*)96&0*2
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For those already equipped, 5G capability is on its way. For Gogo Business Aviation that means an existing Avance L5 system, a Gogo X3 unit for 5G, and two MB13 5G ‘direct replacement’ antennas. Size of cabin matters, with larger cabins having the flexibility of allowing independent zones. The seating arrangement drives the capability and the need for each main cabin sub-zone. Club seating will lend itself to conferencing with individualized controls. Divan seating will have common controls and limited selections. Outside of the main cabin (seating), most medium and large business aircraft will have the following cabin zones: •
•
•
Vestibule as an entry area. Pilots and passengers transit the vestibule, and a jump seat is provided for a third crew member or cabin attendant. If installing Wi-Fi in an aircraft, with the forward location jump seat make sure the internet is available (especially useful for Part 135 or 91K operations). Typically, the galley and forward closets are situated before the main cabin. Some aircraft will have a forward lavatory. Aft of the main cabin is a closet and lavatory with vanity. Many aircraft extend the cabin further with additional onboard storage for larger items.
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from owners and operators in forums such as operator conferences. These are good opportunities to request or suggest cabin solutions you cannot have now. In addition to those listed in Figure 4, a few specific, noteworthy upgrade paths to mention include: 1.
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Specific Cabin Experiences
Specific cabin systems are many and potentially complex, and yet there is simplicity in the wireless, Wi-Fi, and Bluetooth capabilities that are in use today. Being able to walk aboard an aircraft with your own mobile phone, select your favorite music, and hear it over transducer driven cabin walls and ceilings (Bongiovi Acoustics Labs), is simplicity in action. To use the same, or other, device to select a movie from the internet and connect via HDMI to a flat panel 4K monitor, is a further streamlining of activity. It also involves less wiring, switches, relays or adapters. Figure 4 (above) depicts just five cabin experiences, highlighting some of the upgrades a prospective buyer can consider. For many new aircraft buyers, by the time their serial number airframe is delivered, its technology may not have the latest cabin functionality. Over time, some manufacturers will offer software and hardware upgrades, or there may be options that can be added post-delivery. For many, it is certainly a challenge to remain current. It may not be possible to upgrade your aircraft with some of the features represented in Figure 4, or you may need to request them from a third party. Aircraft manufacturers do solicit feedback
2. 3. 4.
Personal Service Units (PSUs) as novel, clean overlays (Duncan Aviation); Cadence switch panel replacements, general and customized (Alto Aviation); LED lighting used for cabin data broadcast, as light fidelity – Li-Fi (Lufthansa Technik); Wireless Avionics Intra Communications (WAIC) opensource operating status of cabin electronics, including items such as galley ovens (Coming to aircraft cabins soon).
The Real Cabin Avionics System
Because modern cabin avionics are moving to wireless technology, there appears to be just a few switch panels and displays in the cabin, leading some to assume that cabin avionics must be an easy upgrade. As there are many legacy aircraft in service and a shortage of new aircraft for eager buyers, it is worth considering a typical cabin avionics system on a not-so-new business aircraft. In most instances, legacy cabin avionics is a mix and match of various sub-systems. Older VCRs, CD players, speakers, handsets, headsets, displays, lighting, phones, internet, and more, are removed, altered and upgraded at different service events and it is the resultant outcome hidden behind the veneer that is the reality of the overall system. Because of engineering, design, physical limitations, power requirements, wiring and access, it is necessary to integrate new capabilities to existing technologies. Here are some examples of existing cabin technology:
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“As speeds and
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Speaker and Phone Amplifiers Power Supplies from Fluorescent Lighting used for LED Replacement Relay Boxes and Hidden Devices that Convert Data, and Control Existing Aircraft Systems, Including: Temperature Galley Equipment Reading Lights Cabin Briefing Passenger Address Cabin Call Water Heat Displays Airstair.
The passenger may only see side rail-mounted tactile switches, touchscreen control panels and displays, but behind the scenes there is significant integration. Here the translation of new technology to existing airframe, electrical, and avionics systems takes place; a translation of communication and action to equipment that is not being upgraded. Different cabin avionics systems
will have several features in common. An upgrade should consider the impact on, and between, all. For illustration, Table B (above) provides examples of the many cabin avionics systems.
In Summary…
An aircraft cabin in any business aircraft is designed to meet passenger expectations, and understandably these are high. Just as the look, feel and utility of interior furnishings is given maximum attention during design and build, so is the electronics. While much of the electronics is unseen to the passenger, it still needs work as advertised. There is as much in the design and engineering as there is in the installation of cabin electronics. It only takes one small feature to malfunction or not operate as expected for an operator to become discouraged with the complete upgrade. Pilot expectations revolve around safety first. Passenger expectations revolve around the experience within a safe environment.
bandwidth expand, and satellites fill the void, the world of IoT will extend exponentially into aircraft cabins.” By the time you read this article there will be innovations and novel features reaching into cabins, new and pre-owned, that were not covered here. Change comes fast to the gadget-hungry Business Aviation community, and there is no better place to find gadgets than within the cabin. Here the safety criticality and operational requirement is not as stringent. Flexibility of choice and features abound. Certification is important, as with non-interference testing between Wi-Fi internet and existing aircraft avionics, but, overall, there is more leeway given to cabin certifications. Like the cockpit, the cabin of today is miles ahead of yesterday’s; and tomorrow’s will be further ahead still. Expect more wireless capability, and an ability for anyone, anywhere to connect in several different ways to any passenger, and the wider world outside, at any time throughout the flight. As speeds and bandwidth expand, and satellites fill the void, the world of IoT will extend exponentially into aircraft cabins. ❙
KEN ELLIOTT has 52 years of aviation experience focused on avionics in General and Business Aviation. Having a broad understanding after working in several countries on many aircraft types and avionics systems, he has contributed to several work groups and committees, including for NextGen, Airport Lighting, Human Factors, Unmanned Aircraft and Low Vision Technology. In retirement, he is striving to give back the knowledge gained with an eye on aviation’s future direction.
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Beechcraft Denali Makes First Flight
Airbus Corporate Helicopters signed a renewal of the highly successful design collaboration with Mercedes-Benz which introduced the concept of partnerships between the automotive and aerospace industries in 2010. Since launch, 26 unique examples of the ACH145 Mercedes-Benz Style Edition have been sold, with the companies revealing a facelift of the helicopter is already underway to further reflect contemporary design values.
Textron Aviation’s new single-engine Beechcraft Denali turboprop flew for the first time in late November, marking the start of the flight test program.
A
ccording to Ron Draper, President and CEO, Textron Aviation, “With its more environmentally friendly engine and largest cabin in its class, [the Denali] is an aircraft that will change the landscape for high-performance singleengine turboprop aircraft.” Piloted by Senior Test Pilot Peter Gracey and Chief Test Pilot Dustin Smisor, the Beechcraft Denali prototype aircraft, powered by GE Aviation’s new Catalyst engine, took off from the company’s west campus at Eisenhower International Airport. During its 2-hour and 50-minute maiden flight, the team tested the aircraft’s performance, stability and control, as well as its propulsion, environmental, flight controls and avionics systems. The aircraft reached an altitude of 15,600 feet and attained a speed of 180 knots. The Denali prototype aircraft, along
with two additional flight test articles and three full airframe ground test articles, will continue to expand on operational goals, focusing on testing aircraft systems, engine, avionics and overall performance. The company targets certification for the Denali in 2023. Once certified, it should be capable of a cruise speed of 285kts and offer a range of 1,600 nautical miles at high-speed cruise, carrying one pilot and four passengers. That would enable passengers to fly from Los Angeles to Chicago, New York to Miami, or London to Moscow non-stop. The FADEC-controlled 1,300shp GE Catalyst engine will burn up to 20% less fuel than older turboprop technologies, Textron says, while in the cockpit pilots will utilize the Garmin G3000 avionics suite. More information from www.txtav.com
RECAP on Key Business Aviation news, appointments, and events with
AVBUYER 112 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
In additional news, The Helicopter Company (THC), the first and only helicopter services provider licensed to operate commercial flights in the Kingdom of Saudi Arabia, has signed a second purchase agreement with Airbus Helicopters, for twenty of the newly launched five bladed H145 and six ACH160 models. https://www.airbus.com/en/ products-services/helicopters
AirGO and Victor announced a partnership which will see the introduction of ‘opt-out’ Sustainable Aviation Fuel into the standard pricing structure of charter flights. A new quotation format will promote the use of, and invert the approach of, existing schemes by asking buyers if they want to ‘opt-out’ of the program, rather than requiring them to ‘opt-in’ at the end of the transaction. https://airgo.de and www.flyvictor.com www.AVBUYER.com
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AVBUYER.com
OEM Bites
Falcon 6X Engine Receives Transport Canada Nod
Bell Textron’s Bell 429 and 505 continue to make “exceptional progress” in the European private travel market, according to the company. Purchase agreements were signed for five aircraft by customers in Ukraine recently. The Ukrainian purchase agreements included two Bell 505s, two Bell 429s, and one Bell 407GXi with the newly certified IFR configuration. www.bellflight.com
Dassault’s Falcon 6X moved a step nearer certification after Pratt & Whitney Canada received Transport Canada Civil Aviation type certification for the PW812D engine.
A
ccording to Maria Della Posta, President of Pratt & Whitney Canada, the engine OEM successfully achieved the PW812D design and program schedule milestones “by working closely with Dassault since the launch of this great program”. Dassault Aviation Chairman and CEO Eric Trappier congratulated Pratt & Whitney Canada on the Transport Canada approval. “It’s a major step forward in fuel efficiency, maintainability and performance, helping make the 6X an outstanding new Falcon,” he said. The engine powers all three of the Falcon 6X aircraft currently in flight-testing, and the aircraft test campaign has accumulated over 500 flight test hours and 150 flights to date. Dassault’s test pilots have praised the smooth handling of the aircraft as it continues to make steady
progress toward planned type certification in late 2022. According to Pratt & Whitney Canada, the PW812D engine has been thoughtfully designed for all the key stakeholders, including the passenger, pilot and maintenance crews, and provides an unmatched experience with an exceptionally quiet and comfortable cabin, making it the quietest engine in its class. The engine sets the industry standard for maintenance, according to P&WC, requiring 40% less scheduled maintenance and 20% fewer inspections than other engines in its class. Offering an output of 13,500lbs of thrust, the PW812D will provide the Falcon 6X with a range of up to 5,100nm.
Bombardier delivered the 1,000th Global aircraft in December. The milestone aircraft – a Global 7500 – joined the NetJets fractional ownership fleet. The Global 7500 “adds a new dimension to our long-range aircraft offerings,” according to Patrick Gallagher, President, Sales, Marketing and Services, NetJets as his company received its newest jet. www.bombardier.com
More information from www.dassaultfalcon.com or https://pwc.ca Gulfstream announced its G500 and G600 both successfully demonstrated steep-approach landings into the UK’s London City Airport, and Switzerland’s Lugano and Sion Airports, an achievement that is “key in the process of securing customers’ access to even more locations worldwide”, according to Mark Burns, President of Gulfstream Aerospace. www.gulfstream.com
www.AVBUYER.com
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COMMUNITY
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Aero-Dienst Celebrates 15 Years in Vienna Aero-Dienst, the Nuremberg-based full-service provider for Business Aviation and air ambulance services is celebrating 15 successful years of operations for its maintenance line station in Vienna.
I
Christian Weigl (left), Manager Maintenance Line Stations Austria, and André Ebach (right), Head of Maintenance at Aero-Dienst
n 2006, Aero-Dienst began providing line services to Vienna-based Learjet operators and has steadily expanded the range of both its services and its authorizations to work on a wider variety of aircraft models and manufacturers, thereby continually increasing its capacity over the years. In 2017, Dassault Aviation designated the Vienna line station as an Authorized Service Center. According to Aero-Dienst, this success story has only been possible due to the efforts of the enthusiastic and highly competent Vienna team, which has grown to 10 employees in the last five years. It includes five licensed technicians with multiple type ratings, each of whom has more than 20 years of experience in aircraft maintenance. The team currently completes up to 500 maintenance events per year. A component shop for wheels and batteries has been
integrated into the Vienna line station, making replacement parts available as required. “In general, our work is guided by our customers’ requirements, as well as those of potential customers,” said Christian Weigl, Head of Aero-Dienst’s Vienna Station. “So, we have set ourselves the goal of steadily expanding our maintenance portfolio to new aircraft types, and growing in a circumspect way.” In addition to the Vienna station and its headquarters in Nuremberg, Aero-Dienst operates a station in Klagenfurt, and this year saw the opening of a maintenance station in Oberpfaffenhofen, near Munich. Meanwhile, its component shop in Landsberg am Lech allows Aero-Dienst to provide fast and local repairs for maintenance operators in Europe, the Middle East and Africa. More information from www.aero-dienst.com
Industry Appointments Karen Blake was appointed Sales Manager at JetHQ . Ms. Blake previously handled data reporting, system accounting and aircraft databases for client accounts at AMSTAT. David Caporali has been appointed Vice President of Business Development for Latin America by Jet Support Services, Inc. He brings more than 15 years of industry experience to the role. Greg Fell became JETNET’s first CEO recently. Among his career highlights, Greg previously served as COO for Gama Aviation leading a massive growth phase for the company that saw it emerge as the largest Part 135 operator in the US, ultimately being acquired by Wheels Up in 2020. “His extensive experience, values, and ethics helped us realize that he was the appropriate person to bring into the fold,” said Tony Esposito, President of JETNET. Kenny Mazingo was named as the new Market Analyst, Planning and
114 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Transactions for Mente Group, and will be based at the company’s Dallas headquarters. He is responsible for collecting, interpreting and analysing General Aviation market data in order to support Mente Group’s transactions and business development teams. Stephen Mitchell is the new Head of Sales for the UK and Ireland for Savback Helicopters. He brings 25 years of experience in civil aviation sales to Savback, having begun a career in helicopter sales specializing in Robinson and Leonardo Helicopters transactions. Amelia Schaefer joined JetHQ as Manager of Market Research. Ms. Schaefer previously worked as a domestic and foreign market research analyst, handling fixed-wing and helicopter transactions at AMSTAT. Scott Wilbanks was promoted to the role of Senior Vice President of Aircraft Management Sales at Jet Linx, responsible for overseeing the day-today functions of the company’s aircraft management sales team. T
Karen Blake
David Caporali
Greg Fell
Kenny Mazingo
Stephen Mitchell
Amelia Schaefer
www.AVBUYER.com
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Clip Group 2020 Bell 505 Jet Ranger X August.qxp_Heeren Cit Ultra sep 22/12/2021 11:02 Page 1
S H O W C A S E
2020 Bell 505 Jet Ranger X Serial Number: Registration: Airframe TT:
65253 SP-MRW 26
As owner, we are proud to present this BRAND NEW Bell 505 Price from Bell in this configuration (including ferry to EU) was $1,85M Now reduced to $1,72M Airframe Delivery hours: 26 hours Dual Pilot Controls Wire Strike protection Engine Dual-channel FADEC engine control system Auxiliary Control Unit (backup for HMU) Automatic startup Surge and flame-out protection Engine parameter recording for maintenance (BOOST compatible) Automatic cycle and flight hour counting
ADS-B GPS / WAAS receiver VHF COM transceiver VHF NAV and glideslope receivers Exterior Painted 2020 Metallic Black with Dynamic White Bell 505 logo Interior 2020 Premium interior with black leather seats Floor protectors: Baggage bay, Cockpit & Cabin A20 Bose headsets w/Bluetooth Air-Conditioning Location Swarzędz Gmina, Greater Poland, Poland Contact: Agnieszka Hips
Avionics ADS-B Equipped Garmin G1000H™ avionics suite Integrated on PFD / MFD Traffic Information System (TIS) Moving Map Fuel and NAV range HTAWS, and Synthetic Vision System
STS Centrum Dystrybucji Samochodów Sp. z o.o. Swarzedz, Poland
www.AVBUYER.com
Tel: +48 663 792 802 E-mail: agnieszka.hips@clip-group.com
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M A R K E T P L A C E
2013 Gulfstream G650
Tel: +1 (314) 409-4791 E-mail: sales@jet-transactions.com
The Ritchie Group Price:
Please call
Year:
2013
S/N:
6015
Reg:
-
TTAF:
1,509.8
Location: USA, CA
LOW TIME, EXCELLENT PEDIGREE. Inquire Today! U.S. Registered, Professionally Maintained and Operated, Excellent Pedigree. Engines & APU Enrolled on JSSI Platinum Program 100% Coverage. 96-Month Inspection Completed April 2020. Block Point 2’ (ASC 902A & ASC 038A Incorporated). ADS-B Version II (DO-260B). CB 162 FMU and Fuel System Upgrade Completed. ASC 093 Flight Control Computer software (V7.1). REU and MEC Reliability Updates. ASC 098 Horizontal Stab Control Unit Mod 4. Main Entrance Door Lock, Latch Actuator and Rigging Improvements. Avionics: The Gulfstream G650 is Equipped with the Gulfstream PlaneView™ II /Honeywell Primus Epic Avionics Suite
www.jet-transactions.com
BELL 412EMS
Leonard Hudson Drilling Price:
Offer
Year:
1981
S/N:
33017
Reg:
N554AL
TTAF:
15265
Tel: +1 (806) 662 5823 Email: ronfernuik@hotmail.com
Full EMS Medical 4 patient and 4 attendant interior. Recent ‘no expense spared’ airframe refurbishment at Acro Helipro within the last 100 hours. Both engines are fresh Pratt and Whitney overhauled. Immediate delivery, Meticulous records. Current with medical interior and 13 passenger utility interior are included, aircraft is ‘turn-key’ will provide Fresh annual /Export C of A
Location: USA
BELL 212 (Five Available)
Leonard Hudson Drilling Price:
Please Call
Year:
1991-1996
S/N:
Call for details
Reg:
Call for details
TTAF:
Call for details
Tel: +1 (806) 662 5823 Email: ronfernuik@hotmail.com
Five, Late Model, Bell 212s In 'Off Shore’. Available for immediate use. Asking $3.1M to $3.6M USD. Serial numbers: 35034, 35048, 35060, 35088 and 35096
Location: USA
McDonnell Douglas 500E
Anthony Draper Price:
Make offer
Year:
2002
S/N:
0563E
Reg:
G-MDDE
TTAF:
4465
Location: United Kingdom
McDonnell Douglas 500E
Bill Woods Price:
$1,749,000 No VAT
Year:
2009
S/N:
369E-0594E
Reg:
N421KY
TTAF:
665
Location: USA & Canada
118 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Tel: +44 (0)787 680 1006 Email: anthony.draper@me.com Beautifully refurbished MD500e. Completed in 2018 with custom designed paint and interior. Always hangared and well maintained. The aircraft has been valued at $1.45m, however we are accepting sensible offers. Airframe: Equipment Dual Controls. Bristol Wire-strike Kit (Upper and Lower). Passenger Flight Steps. Sliding Vent Windows (Front). Avionics: Aspen EFD1000H with traffic unlock. Garmin GTN750H GPS/nav/com 1. King KY 196B com 2. Garmin GTX345 ADS-B transponder. Int: Beautiful Internal Farnborough Interiors Luxury Interior - Completed 2018. Ext: External New Porsche Crayon and Agate Grey Paint Scheme - Completed 2018. Helicopter is in immaculate condition, always hangared and well maintained
Tel: +1 (541) 957 2000 E-mail: skyking@douglasfast.net Only Two Owner's Since New, NDH, All Logs, Always Hangared, Fresh Annual April 2021. The Nicest 500E Anywhere In The World. Never Worked. No Damage History, Owned & Flown Privately. No Expense Spared. Will Consider All Trades. Blades Factory Refurbished About 40 Hours Ago. 10-Year Driveshaft Couplings Have Been Completed. This Machine Needs Absolutely Nothings For Many, Many Years To Come. The MD500E Has A starting Price Of $3.25-Million & Keeps Going Up From There. . That Is If You Can Even Get One From The Factory. Then, If You Can Get One, Delivery Can Take As Long As 2-Years. Due To MD Being So Busy Building These Ships For The Militaries Around The World.
www.AVBUYER.com
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McDonnell Douglas 902 Explorer
DynamicPitch Ltd Price:
Make offer
Year:
2002
S/N:
900-00103
Reg:
G-CIOS
TTAF:
2900
Location: United Kingdom
McDonnell Douglas 902 Explorer
DynamicPitch Ltd Price:
Make offer
Year:
2007
S/N:
900-00121
Reg:
G-HMDX
TTAF:
3600
Location: United Kingdom
McDonnell Douglas 902 Explorer
DynamicPitch Ltd Price:
Make offer
Year:
2000
S/N:
900-00074
Reg:
G-SASR
TTAF:
6621
Location: United Kingdom
Airbus H125
Helitrade AG Price:
Please email
Year:
2016
S/N:
8211
Reg:
-
TTAF:
3704
Location: Switzerland
Airbus/Eurocopter AS 355N
Sean Lee Price:
USD $599,000
Year:
1999
S/N:
5683
Reg:
N824AF
TTAF:
5,245
Location: USA & Canada
www.AVBUYER.com
M A R K E Tel: +44 (0)794 359 1121 T Email: bobby@dynamicpitch.net P L A well specified MD902 Explorer helicopter in excellent condition. A PWC PW207E Engines. Category A, Single Pilot. IFR Certified. C NVIS Certified. EMS/Multirole Configuration. The aircaft can be specified, painted or modified to the new owners exact E
specification. A Spares package and ongoing maintenance/spares support also available.The MD902 Explorer posseses No Tail Rotor (NOTAR) Technology, an ultra smooth rotor system with plenty of ground clearance, spacious cabin, and powerful Pratt & Whitney engines. All resulting in a supremely capable and cost effective helicopter. The true definition of a multi-role helicopter, this MD902 Explorer is a worthy addition to your helicopter fleet
Tel: +44 (0)794 359 1121 Email: bobby@dynamicpitch.net This distinctive looking, later serial number MD902 Explorer helicopter is in excellent condition and ready to fly. The aircaft can be specified, painted or modified to the new owners exact specification. A Spares package and ongoing maintenance/spares support is also available. PWC PW207E Engines. Single Pilot, Category A IFR Certified. NVIS Certified. Utility / Air Medical Interior. The MD902 Explorer posseses No Tail Rotor (NOTAR) Technology, an ultra smooth rotor system with plenty of ground clearance, spacious cabin, and powerful Pratt & Whitney engines. All resulting in a supremely capable and cost effective helicopter. The true definition of a multi-role helicopter, this MD902 Explorer is a worthy addition to your helicopter fleet.
Tel: +44 (0)794 359 1121 Email: bobby@dynamicpitch.net A great example of an MD902 Explorer in excellent condition. Available to purchase now. The aircraft is presented in attractive British Racing Green adorned with a striking swirl of Super White, complimenting those classic Explorer lines.•PWC 206E Engines •Cat A, Single Pilot Day/Night VFR Certified• NVIS Certified • Utility / Air Medical Interior. The aircaft can be specified, painted or modified to the new owners exact specification. A Spares package and ongoing maintenance/spares support also available. The MD902 Explorer posseses No Tail Rotor (NOTAR) Technology, an ultra smooth rotor system with plenty of ground clearance, spacious cabin, and powerful Pratt & Whitney engines. Get in contact to discuss your requirements.
Tel: +41 (0) 796 321 116 Email: tprospero@europavia.ch The H125 (previously named the AS350 B3e) outclasses all other single-engine helicopters for performance, versatility, low maintenance, and low acquisition costs, while excelling in high and hot and extreme environments. It is a member of Airbus’ Ecureuil family, which has accumulated almost 36 million flight hours worldwide. Our Helicopter is equipped for Aerial Work & pax missions, full swing, mirrors and floor window, equipment list availabe on request. Aircraft immediately operational. Engines: ARRIEL 2D. Total Run Hours : 3608 Hrs 21 mn. Cycles N1 : 14813 10 - Cycles N2 : 3252. FM Radio, Upper/Lower Cargo for long line ops.
Tel: +1 (754) 666 2997 E-mail: Seanethan@leeaviation.com Beautiful Helicopter was operated by the police so all maintenance was done!!! She's ready to fly nothing is wrong. One of the engines was recently overhauled only 15 hours! Call me won't last long 754-6662997. or what's app if your outside of the USA 305-733-0037. 12 year inspection and 5000 hrs ( 2012). Engines: TURBOMECA. Avionics: Garmin 500H EFIS -Synthetic Vision, L-3. Trilogy - Standby Horizon, Garmin 430 NAVCOMM - GPS, Garmin SL-40 - VHF, Garmin GTX-330 - Transponder, Garmin 350- Audio. Panel 3D, Guardian Avidyne- GPS Tracker, EX5000 Multi-Function Display. 406 MhZ KRA10A KCS-55A Ryan. ATS9900B, ELT Radar Altimeter, Compass System, TCAD. Int: Done in 2012. Ext: Paint done in 2012. Price Reduced
AVBUYER MAGAZINE R Vol 26 Issue 1 2022 R
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M A R K E T P L A C E
Airbus/Eurocopter AS 350B-2
Price:
Make offer
Year:
1985
S/N:
1809
Reg:
HB-ZAR
TTAF:
8264
Location: Switzerland
Airbus/Eurocopter AS 350B-3
Tel: +44 (0)203 290 3311, +44 (0)771 732 7065 E-mail: slambert@auraaviation.com
Aura Aviation
Aura Aviation are delighted to present this best in class Eurocopter AS 350B2 Ecureuil (Squirrel) which has undergone an extensive and complete renovation during the 12 year overhaul including the conversion from BA to B2 standard, with the installation of a freshly overhauled Turbomeca Arriel 1D1 engine. The works were undertaken by RUAG, the internationally respected Swiss government owned MRO. Swiis Tax is paid, therefore the aircraft enjoys free circulation within the EU, if it stays on the HB register. The aircraft presents as showroom fresh. A video walk around is available and a link included in the specification. The complete works took 14 months to complete and cost $1,460,000. The aircraft will stand up to all and any inspection.
Tel: +43 (0) 664 819 3682 E-mail: hermann.eder@sennair.at
Hermann Eder Price:
Make offer
Year:
2001
S/N:
3414
Reg:
-
TTAF:
4330
Location: Austria
We are offer our utility/passenger/VIP AS350 B3 Helicopter which is currently in use for sightseeing and VIP flights. Carefully stored in hangar only and very well maintained. - This AS350 B3 comes wiht a 5 passenger configuration. - Cargo hook and swing - Floats fix - VIP leather interior - Great component times - New Enginge - on SPH contract - Cockpit floor window - New Starflex - New Tail Rotor - Newly painted With 600 hrs 24 months inspection currently done - Engine flushing w/out removal of cowlings - Pilot’s windshield wiper Dual Controls - Emergency Floatation Gear – Fixed parts If you have any question, please do not hesitate to contact us
Tel: +91 9023929214 E-mail: neeru@caladriusaero.com
Neeru Singh
Bell 412EP
Price:
Make offer
Year:
2010
S/N:
-
Reg:
-
TTAF:
3633:41
Location: India
Highly motivated Seller for BELL 412EP with comfortable VIP configuration along with the airconditioning system. The asset is currently located in Delhi, India. The helicopter is configured for a wide rage of missions like VIP transporation, off shore & other special operations, etc. Immediate Transaction feasible. Attractive price with maintenance adjusted values to incentivise buyer investment. #bell412forsale #helicopterforsale #bell412EP #helicopter #VIPheli. Airframe: • Aluminium alloy fuselage loading space • Glass windshields • Tinted overhead windows • Dual windshield wipers • Fresh air ventilators with adjustable outlets (8 cockpit and 12 aft cabin). Engine Details : Pratt & Whitney
Tel: +34 (0) 651 951 951 Email: info@machhelicopters.com
Anibal Martinez Varde
Agusta A109A MK II
Price:
€480,000 Excl. VAT FANTASTIC HELICOPTER, ENGINES AND COMPONENTS WITH A
Year:
1987
S/N:
7384
Reg:
EC-MSF
TTAF:
4350
Location: Spain
Aircraft Spare Parts
Wheels, Starters, Brakes, etc. Outright and Exchange
BIG POTENTIAL. EXCLUSIVELY USED FOR VIP OPERATION. OPERATED ON AOC, MAINTENANCE AND CAMO. NO DAMAGE HISTORY. 2 x VHF 8.33, 8 seats, air conditioning/heating, new hub and main rotor head, new leather interior. Ready for immediate delivery. Motiveted seller. Airframe Total Time: 4.350 Hours. Powerplant (Left): Allison 250-C20B SN CAE-835841 with 4.340 Hours. Powerplant (Right): Allison 250-C20B SN CAE-833755 with 2.539 Hours. - Interior 10/10: The interior has been renewed in grey leather in 2021. Headsets provided to all seats. - Exterior 10/10: Immaculate condition, repainted in 2021 in black paint with a silver grey stripe.
Par Avion Ltd
Cessna, Learjet, Hawker, Westwind, Falcon, Gulfstream, Global Express
FALCONS • HAWKERS • LEARS
Tire Inflation Cage, Hydraulic Wheel Dolly, Lav Cart Brake Bleed Kits, O2 & N2 Single Bottle Carts, Socket Kits Mobile A/C Cart, Oxygen Fill Adapter, Jack Adapters
www.paravionltd.com
Manufacturer of Select GSE & Speciality Tooling Preowned GSE also available
www.AlberthAviation.com 120 Vol 26 Issue 1 2022 AVBUYER MAGAZINE
Buy * Sell * Trade
SALES • ACQUISITIONS • CONSULTING
832-934-0055 www.AVBUYER.com
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Aircraft For Sale • AIRCRAFT • HELICOPTERS
AIRCRAFT
PAGE
AIRBUS A318 Elite . . . . . 5 A319 VIP . . . . . . 5
AIRCRAFT
BOEING/MCDONNELL DOUGLAS BBJ . . . . . . . . . . . 43, 124 BBJ3 . . . . . . . . . 124 BBJ MAX 8 . . . . 43 737-700 . . . . . . . 10 767-300ER . . . . . 5
BOMBARDIER Global 5000 . . . . 124 Global 6000 . . . . 124 Global Express XRS. 14
Challenger 300 . . . . . . . . . . . 53 601-3A . . . . . . . . 53 604 . . . . . . . . . . . 87 605 . . . . . . . . . . . 11
Learjet 45XR . . . . . . . . . . 6, 13
CESSNA
AIRCRAFT
PAGE
HAWKER BEECHCRAFT King Air
SR20 GEN2 . . . . 29 SR22 . . . . . . . . . . 29
DASSAULT FALCON 6X . . . . . . . . . . . . 1 8 X . . . . . . . . . . . . 53 50-40 . . . . . . . . . 123 50EX . . . . . . . . . . 35 900EX . . . . . . . . 6, 124 900EX EASy . . . 14 2000 . . . . . . . . . . 41 2000LX . . . . . . . . 53
250 . . . . . . . . . . . 124 350 . . . . . . . . . . . 93 360 . . . . . . . . . . . 37 B200 . . . . . . . . . . 93 C90GTi . . . . . . . . 93 F90-1 . . . . . . . . . 13
Beechcraft 1900D . . . . . . . . . 49
Hawker 800XP . . . . . . . . . 10, 93 900XP . . . . . . . . . 93 4000 . . . . . . . . . . 13
EMBRAER
NEXTANT
Legacy 500 . . . . 6, 53 Legacy 600 . . . . 53 Legacy 650 . . . . 124 Phenom 100 EV. 31 Phenom 300 . . . 10, 93
400XTI . . . . . . . . 37
PIAGGO P180 EVO Avanti. . 123
GULFSTREAM IV . . . . . . . . . . . . . 53 IV SP . . . . . . . . . . 53, 93 V. . . . . . . . . . . . . . 93 150 . . . . . . . . . . . 53 280 . . . . . . . . . . . 13, 53 450 . . . . . . . . . . . 93
AIRCRAFT
550 . . . . . . . . . . . 10, 15, 53, 93 650 . . . . . . . . . . . 118 650ER. . . . . . . . . 75
CIRRUS
Citation II . . . . . . . . . . . . . 29 III . . . . . . . . . . . . 79 X. . . . . . . . . . . . . . . 10 XLS . . . . . . . . . . . . 6, 10 XLS+ . . . . . . . . . . . 93 CJ2. . . . . . . . . . . . 87 CJ4. . . . . . . . . . . . 11
PAGE
Ultra . . . . . . . . . . . 11 172S Skyhawk. . 29 182S Skylane . . 29 T182T Skylane . 29
PAGE
HELICOPTERS
AIRBUS/ EUROCOPTER AS 350B-2 . . . . . 120 AS 350B-3 . . . . . 120 AS 355N. . . . . . . 119 EC 120B . . . . . . . 49, 93 EC 135T2 . . . . . . 93 EC 155 B1 . . . . . 53 H125 . . . . . . . . . . 119
AGUSTAWESTLAND AW109A MK II . . 120 AW109E Power . 11
BELL 206 . . . . . . . . . . . 11 212 . . . . . . . . . . . 118 412EP . . . . . . . . . 93, 120 412EMS . . . . . . . 118 505 Jetranger X 117
McDONNELL DOUGLAS 500E . . . . . . . . . . 118 902 Explorer . . . 119
PILATUS PC-12 NG. . . . . . 11, 37
PIPER Meridian . . . . . . . 6 PA46-350P Jetprop. 49
The best aircraft for sale search anywhere, everywhere - on pc, smartphone and tablet Advertiser’s Index 1st Source Bank ................................................. 61 Action Aviation ..................................................... 75 AeroBuyNow........................................................ 49 Aircraft Blue Book ...............................................92 Airline Transport Professional........................... 97 Aradian Aviation .................................................. 93 Assent Aeronautics ......................................... 115 Avpro ..................................................................... 53 Bombardier ....................................................... 101 Carolina GSE ...................................................... 61 Central Business Jets ..................................... 123 Clip Aviation ...................................................... 117 Concorde Battery .............................................. 97 Dassault Falcon Pre-Owned ........................ 2 - 3
Duncan Aviation .............................................. 6 - 7 Eagle Aviation ...................................................... 29 ElliottJets .............................................................. 17 Engine Assurance Program .............................. 21 Freestream Aircraft ............................................ 43 General Aviation Services................................. 41 Global Jet Capital .............................................. 57 Global Jet Monaco ................................................ 5 Gogo Business Aviation.................................... 69 Hatt & Associates ............................................... 13 Jetbrokers ............................................................. 79 Jetcraft Corporation ......................... 18 - 19, 124 JetHQ .................................................................... 37 Jet Values............................................................ 111
Leading Edge Aviation Solutions ................... 89 More & Company ..............................................111 NAFA .................................................................. 109 OGARAJETS ....................................................... 31 Par Avion ............................................................... 35 Pratt & Whitney.................................................... 47 Satcom Direct ..................................................... 71 Singapore Airshow ............................................ 80 Sparfell & Partners ..................................... 10 - 11 The Jet Business......................................... 14 - 15 The Private Jet Company................................... 87 The Registry of Aruba .......................... 1, 24 - 25
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AvBuyer (USPS 014-911), January 2022, Vol 26 Issue No 1, is published monthly by AvBuyer Ltd, 1210 West 11th Street, Wichita, KS 67203-3517 and has a targeted circulation to decision makers within business and corporate aviation throughout the world. It is also available on Annual Subscription @ UK £40 and USA $65. POSTMASTER: Send address changes to: AvBuyer Magazine 1210 West 11th Street, Wichita, KS 67203-3517. Postage is paid at Wichita, KS and additional mailing offices © Copyright of AvBuyer Ltd. Every effort is made to ensure the accuracy of material published in AvBuyer Magazine. However, the publishers cannot accept responsibility for claims made by manufacturers, advertisers or contributors. The views expressed are not necessarily those of the Editor or the publishers. Although all reasonable care is taken of all material, photographs, CD & DVDs submitted, the publishers cannot accept any responsibility for damage or loss. All rights reserved. No part of AvBuyer Magazine - Advertising, Design or Editorial - may be reproduced, stored in a retrieval system, or transmitted in any other form, or by any other means, electronic, mechanical, photographic, recording or otherwise, without prior written permission of the publishers.
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COLLINS PROLINE 21 AVIONICS PACKAGE, AGT-5000 GoGo WIFI, Extended Altitude S.B. 49,000 FT capable, 3rd Collins VHF, Baker LCD Cabin Control System w/ 10 Panels, One 15” LCD Monitor, Artex ELT w/ NAV Interface, XM Weather, Baker Cabin Video System (4 ea. 5.6” Slim Line Plug in Monitors), Fire blocked foam with Fabric Protection
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Citation X SN281
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1999 DASSAULT FALCON 900EX S/N 38
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