JETNET iQ 2014 Forecast - Rolland Vincent...Inhibitors(to(New(Aircra(Purchase(1.8%% 4.3%% 4.9%%...

Business Jet Market Update and 2014 Forecast

February 4-‐6, 2014 4th Annual Interna-onal Corporate Jet & Helicopter Finance Conference

Rolland Vincent JETNET iQ Creator/Director 1-‐972-‐439-‐2069 (U.S. Central Time) [email protected] www.jetneOq.com

Certain statements in this report cons-tute forward-‐looking statements or statements which may be deemed or construed to be forward-‐looking statements within the meaning of the Private Securi-es Li-ga-on Reform Act of 1995. The words "forecast", "an-cipate", "es-mate", "project", "intend", "expect", "should", "believe", and similar expressions are intended to iden-fy forward-‐looking statements. These forward-‐looking statements involve, and are subject to known and unknown risks, uncertain-es and other factors which could cause actual results, performance (financial or opera-ng) or achievements to differ from the future results, performance (financial or opera-ng) or achievements expressed or implied by such forward-‐looking statements. These forward-‐looking statements are based on beliefs, assump-ons and es-mates based on informa-on currently available to JETNET LLC, and are subject to certain risks and uncertain-es that could cause actual results to differ materially from historical results or those an-cipated, depending on a variety of factors, including: significant disrup-ons in air travel (including as a result of terrorist acts), regulatory and tax changes, labor disrup-ons, currency exchange rate fluctua-ons, aerospace program development and management risks, aerospace supplier and customer financing issues, economic and avia-on/aerospace market stability, compe--on, consolida-on and profitability. Should one or more of these risks or uncertain-es materialize adversely, or should underlying assump-ons or es-mates prove incorrect, actual results may vary materially from those described. All forward-‐looking statements aYributable to JETNET LLC and its officers, directors, shareholders, employees, agents, and affiliates herein are expressly qualified in their en-rety by the abovemen-oned cau-onary statement. JETNET LLC disclaims any obliga-on to update forward-‐looking statements contained in this report, except as may be required by law.

Forward-‐Looking Statements

February 4-‐6, 2014 4th Annual Interna-onal Corporate Jet & Helicopter Finance Conference 2

!341!! !168!! !172!! !120!! !183!!!803!!

!171!! !200!!

!11,774!!

!507!! !130!!!560!! !834!! !276!! !437!! !233!! !219!! !152!! !125!!

7.7%!

5.1%!4.9%!

2.9%!

2.4%! 2.2%! 1.9%! 1.9%! 1.8%! 1.7%! 1.5%! 1.5%! 1.2%! 1.1%!0.5%! 0.4%! 0.2%!

/1.0%!/1.3%!

/2.0%!

/1.0%!

0.0%!

1.0%!

2.0%!

3.0%!

4.0%!

5.0%!

6.0%!

7.0%!

8.0%!

9.0%!

!/!!!!

!2,000!!

!4,000!!

!6,000!!

!8,000!!

!10,000!!

!12,000!!

!14,000!!

China!&!Hon

g!Ko

ng!

Argen

=na

!

India!

Saud

i!Arabia!

Australia!

Brazil!

South!Africa!

Switzerlan

d!

United!States!

Cana

da!

Russian!

Fede

ra=on

!

United!

Kingdo

m!

Mexico!

Vene

zuela!

Germany!

Austria!

Fran

ce!

Portugal!

Spain!

!Real!G

DP!Growth!Forecast!for!20

13!(B

LUE!Line

)!

Busine

ss!Je

t!Fleet!(u

nits)!/!!D

ec.!31,!2013!(RED

!Bars)! 2013!GDP!Forecasts!and!"Top!20"!Business!Jet!Fleets!!


Markets with 3%+ 2013 GDP growth represent only 4% of the world business jet fleet

Sources: The Economist, February 1, 2014; JETNET

GDP and Fleet EvoluQon: 2013

3,000,000$

3,200,000$

3,400,000$

3,600,000$

3,800,000$

4,000,000$

4,200,000$

4,400,000$

4,600,000$

4,800,000$

5,000,000$

$8,000$

$9,000$

$10,000$

$11,000$

$12,000$

$13,000$

$14,000$

$15,000$

$16,000$

2001$ 2002$ 2003$ 2004$ 2005$ 2006$ 2007$ 2008$ 2009$ 2010$ 2011$ 2012$ 2013$

U.S.$B

usiness$Jet$Cycles$$

$U.S.$G

DP$in$Billions$of$C

hained

$$20

09$$

(Seasona

lly$Adjusted$at$Ann

ual$R

ates)$$$$$

U.S.$GDP$and$U.S.$Business$Jet$Cycles$

U.S. GDP and U.S. Business Jet Cycles


Sources: U.S. BEA, U.S. FAA

Region

10)Years)Actual)Real)

GDP)Growth)

2004:2013

10)Years)Actual)Fleet)Growth)

2004:2013

Ratio)of)Fleet:to:GDP)

GrowthAfrica 4.7% 3.4% 0.72............Asia.Pacific 4.7% 8.9% 1.91............Europe 1.0% 8.7% 8.43............Former.Soviet.Union 4.7% 14.7% 3.14............Latin.America.&.Caribbean 3.9% 3.7% 0.96............Middle.East 4.5% 7.8% 1.73............North.America 1.7% 3.4% 1.96............World 2.6% 4.4% 1.68))))))))))))


GDP and Fleet EvoluQon: The Last 10 Years

JETNET iQ Survey Respondents by Region Q1 2011 – Q4 2013 Surveys (n = 6,100)


Africa'3.6%'

Asia'Pacific'5.0%'

Europe'13.4%'

Former'Soviet'Union'0.2%'

LaAn'America'&'Caribbean'16.8%'

Middle'East'1.5%'

North'America'59.3%'

Respondent'Fleet'LocaAon'Q1'2011'N'Q4'2013'


Where is Business AviaQon in the Current Business Cycle?

7

34%$

Not$yet$reached$the$low$point$

23%$

At$the$low$point$

Past$the$low$point$

Op5mism$about$the$industry$All$Respondents$

43%$

43.3%% 41.7%% 47.2%%33.3%%

39.4%%32.5%%

33.9%% 36.2%%33.1%%

34.7%%

39.4%%

35.0%%

22.8%% 22.1%% 19.7%%32.0%%

21.1%%32.5%%

All#Respondents#

Decision#Makers#and#Influencers#

North#America# La:n#America#&#Caribbean#

Europe# Rest#of#World#

Past#low#point# At#low#point# Not#reached#low#point#


Where is Business AviaQon in the Current Business Cycle?


>60% Likelihood of New Aircrae Purchase – Next 12 Months

22.3% 24.0%

13.1%

8.5%

7.8% 14.3%

16.0%

11.1%

20.0%

16.7%

11.2%

United States

Canada

Mexico

Brazil Other LaBn America

& Caribbean

United Kingdom

Eurozone

Africa

Middle East

Australia & New Zealand

Asia

Last 4 Quarterly Surveys

14.3%

Other Europe & Former Soviet Union

New Aircrae Purchase IntenQons By Business Jet Size Category – Next 12 Months

New Orders (Next 12 months)

Small%Jets%20.0%%

Medium%Jets%37.5%%

Large%Jets%42.5%%


Q4 2013 World Fleet

Small%Jets%41.2%%

Medium%Jets%32.6%%

Large%Jets%26.1%%

0"20%%40.0%%

21"40%%13.4%%

41"60%%12.5%%

61"80%%10.3%%

81"100%%15.6%%

Do%not%know%/%

uncertain%8.1%% 0"20%%

26.7%%

21"40%%9.3%%

41"60%%16.0%%

61"80%%13.3%%

81"100%%22.7%%

Do%not%know%/%uncertain%12.0%%

North America LaQn America & Caribbean

New Aircrae Purchase IntenQons: Next 5 years


New Aircrae Purchase IntenQons: Next 5 years

Europe Rest of World


0"20%%35.2%%

21"40%%12.7%%41"60%%

8.5%%

61"80%%15.5%%

81"100%%22.5%%

Do%not%know%/%

uncertain%5.6%%

0"20%%37.5%%

21"40%%12.5%%

41"60%%12.5%%

61"80%%17.5%%

81"100%%10.0%%

Do%not%know%/%uncertain%10.0%%

Inhibitors to New Aircrae Purchase

1.8%%

4.3%%

4.9%%

5.4%%

5.7%%

6.8%%

7.2%%

8.5%%

9.9%%

12.5%%

12.7%%

20.2%%

Other&

Public&opinion&of&business&avia4on&

Using&alterna4ve&flight&solu4ons&(charter,&commercial,&jet&card,&frac4onal,&etc.)&

Will&get&a&be@er&deal&on&a&new&business&aircraB&if&I&wait&a&year&

Availability&of&financing&or&capital&for&purchase&

No&compelling&aircraB&that&meet&my&organiza4on's&needs&

Opera4ng&cost&too&high&

Decline&in&business&ac4vity&

Inability&to&sell&current&aircraB&

Purchase&price&or&tradeKup&cost&too&high&

Uncertainty&about&economy&/&regulatory&environment&

Do&not&need&addi4onal&aircraB&

Purchase%inhibitors%

“Which of the following factors are most likely to prevent or delay your organiza-on from purchasing a business aircra^ over the next 12 months?


!100.00!!

!113.09!! !111.64!!

!101.66!! !99.89!!!94.09!! !93.98!! !94.99!!

!99.37!! !97.17!!

!80.68!!

!102.99!!

Q1#2011#Q2#2011#Q3#2011#Q4#2011#Q1#2012#Q2#2012#Q3#2012#Q4#2012#Q1#2013#Q2#2013#Q3#2013#Q4#2013#

JETNET!iQ!Fly/Buy!Index!=!Next!12!Months!Q1!2011!=!100.0!

Baseline##Q1#2011#

JETNET iQ Fly/Buy Index Aircrae UQlizaQon and New Aircrae Purchase IntenQons


JETNET iQ Fly/Buy Index – North America Aircrae UQlizaQon and New Aircrae Purchase IntenQons


100.0$

89.2$84.2$ 80.9$

95.3$90.1$

85.0$ 82.7$

92.9$86.0$

72.3$

93.4$

Q1#2011#Q2#2011#Q3#2011#Q4#2011#Q1#2012#Q2#2012#Q3#2012#Q4#2012#Q1#2013#Q2#2013#Q3#2013#Q4#2013#

JETNET$iQ$Fly/Buy$Index$>$Next$12$Months$North$America$Q1$2011$=$100.0$

Baseline$$Q1$2011$

15

JETNET iQ Fly/Buy Index – Decision Makers & Influencers Aircrae UQlizaQon and New Aircrae Purchase IntenQons


100.0$

123.4$

107.5$ 110.7$101.6$

92.2$ 93.4$101.8$

94.0$ 97.2$

81.9$

105.4$

Q1#2011#Q2#2011#Q3#2011#Q4#2011#Q1#2012#Q2#2012#Q3#2012#Q4#2012#Q1#2013#Q2#2013#Q3#2013#Q4#2013#

JETNET$iQ$Fly/Buy$Index$>$Next$12$Months$Decision$Makers$and$Influencers$

Q1$2011$=$100.0$

Baseline$$Q1$2011$

100.0$ 103.2$

114.9$108.6$

80.0$

60.0$69.1$

83.7$

93.7$ 93.2$

83.4$

97.9$

Q1#2011#Q2#2011#Q3#2011#Q4#2011#Q1#2012#Q2#2012#Q3#2012#Q4#2012#Q1#2013#Q2#2013#Q3#2013#Q4#2013#

JETNET$iQ$Fly/Buy$Index$=$Next$12$Months$Europe$

Q1$2011$=$100.0$

Baseline$$Q1$2011$

JETNET iQ Fly/Buy Index – Europe Aircrae UQlizaQon and New Aircrae Purchase IntenQons


JETNET iQ Forecast -‐ New Business Jet Deliveries

0"

200"

400"

600"

800"

1000"

1200"

1400"

2004"

2005"

2006"

2007"

2008"

2009"

2010"

2011"

2012"

2013"

2014F"

2015F"

2016F"

2017F"

2018F"

2019F"

2020F"

2021F"

2022F"

2023F"

Deliveries"(units)"

Business"jet"deliveries"<"historical"and"forecast"by"size"category:"2004"<"2023"

Personal"Jet" Very"Light"Jet" Light"Jet" Super"Light"Jet" Mid<Size"Jet"

Super"Mid<Size"Jet" Large"Jet" Large"Long<Range"Jet" Large"Ultra"Long<Range"Jet" Airline"Business"Jet"

Deliveries"2014<2023:""9,360"units"


0"

200"

400"

600"

800"

1000"

1200"

1400"

2004"

2005"

2006"

2007"

2008"

2009"

2010"

2011"

2012"

2013"

2014F"

2015F"

2016F"

2017F"

2018F"

2019F"

2020F"

2021F"

2022F"

2023F"

Deliveries"(units)"

Business"jet"deliveries"<"historical"and"forecast"by"size"category:"2004"<"2023"

Personal"Jet" Very"Light"Jet" Light"Jet" Super"Light"Jet" Mid<Size"Jet"

Super"Mid<Size"Jet" Large"Jet" Large"Long<Range"Jet" Large"Ultra"Long<Range"Jet" Airline"Business"Jet"

Deliveries"2014<2023:""9,360"units"

Year Units 2008: 1275 2009: 927 2010: 793 -‐49% over 6 years 2011: 681 2012: 669 2013E: 644 2014F: 685 +6% YOY

JETNET iQ Forecast – New Business Jet Deliveries


!$348!!

!$844!!

!$401!!!$555!!

!$1,907!!

!$2,276!!

!$2,845!!

!$10,481!!

!$890!!

New$Business$Jet$Delivery$Revenue$2$2013E$$2013$in$Millions$based$on$B&CA$List$Prices$

Very!Light!Jet!Light!Jet!Super!Light!Jet!Mid=Size!Jet!Super!Mid=Size!Jet!Large!Jet!Large!Long=Range!Jet!Large!Ultra!Long=Range!Jet!Airline!Business!Jet!

644 units $US 20.5 billion

!$389!!

!$771!!

!$564!!!$767!!

!$2,245!!

!$2,510!!

!$2,506!!

!$10,048!!

!$1,156!!

New$Business$Jet$Delivery$Revenue$2$2014F$$2013$in$Millions$based$on$B&CA$List$Prices$

Very!Light!Jet!Light!Jet!Super!Light!Jet!Mid=Size!Jet!Super!Mid=Size!Jet!Large!Jet!Large!Long=Range!Jet!Large!Ultra!Long=Range!Jet!Airline!Business!Jet!

JETNET iQ Forecast – New Business Jet Deliveries


685 units $US 21.0 billion

19,537'

Re*rements'and'

Removals'201482023'

New'Deliveries'201482023'

Fleet'Dec.'31,'2013'

2,566'

Fleet''Dec'31,'2023''

26,331'

9,360'

Business'Jet'Fleet'Evolu*on'201482023'

JETNET iQ Forecast -‐ Business Jet Deliveries and Fleet


+35% in 10 Years

About JETNET iQ JETNET iQ is a forecasQng and premium advisory service for the business aviaQon market, designed to help customers “Know More”. Available on an annual subscripQon basis, JETNET iQ consists of three main elements: 1. JETNET iQ Reports are designed to be the definiQve analyQcal reference for the business aviaQon industry, incorporaQng quarterly state-‐of-‐the-‐industry analyses, voice-‐of-‐the-‐customer insights, and detailed delivery and fleet forecasts. 2. JETNET iQ Summits provide unique networking opportuniQes on emerging developments and to interact with other thought leaders in the industry. 3. JETNET iQ Research serves the needs of members with customized research and analysis requirements on a project-‐by-‐project basis. For more informaQon on JETNET iQ, log on to www.jetneQq.com or contact Rolland Vincent, JETNET iQ Creator/Director at 1-‐972-‐439-‐2069 or [email protected].


About JETNET Since 1988, JETNET has delivered the most comprehensive and reliable business aircrae research to its exclusive clientele of aviaQon professionals worldwide. JETNET’s poruolio of services includes JETNET iQ, JETNET EvoluQon, AERODEX, AviaQon Business Index (ABI), AvData, JETNET CRM, Helidex, Rotodex and JETNET EvoluQon Mobile. JETNET is the ulQmate source for informaQon and intelligence on the worldwide fleet of more than 100,000 aircrae, both fixed-‐ and rotary-‐wing. Headquartered in its state-‐of-‐the-‐art facility in UQca, NY, JETNET offers comprehensive user-‐friendly aircrae data via real-‐Qme internet access or regular updates. For more informaQon on JETNET LLC, log on to jetnet.com or contact Paul Cardarelli, JETNET Vice President of Sales, at 800-‐553-‐8638 (USA) or [email protected]; InternaQonal inquiries, contact Karim Derbala, JETNET Managing Director of Global Sales, at 41.0.43.243.7056 or [email protected].


JETNET iQ 2014 Forecast - Rolland Vincent...Inhibitors(to(New(Aircra(Purchase(1.8%% 4.3%% 4.9%%...

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