Page 11 - AAA MAY - JUNE 2016 Online Magazine

COVER STORY

OPPOSITE PAGE: Gulfstream’s
G650ER highlights the
continued need for long-range
business jet travel needs in
China, the Middle-East and
U.S.A

RIGHT: Bombardier has
reported that sales of its
Global 5000, Global 6000 and
Challenger 650 business jets
remain healthy. The Global
7000 program remains on
track to complete its maiden
flight this year

eight passengers and attain a maximum years before sales go up in Brazil. China market momentum continue in its downward
operating speed of M0.925. has not only witnessed a slowdown but the trend, deeper into a buyer’s market,” says
Dassault Aviation is unique amongst market there is also seeing a shift towards aviation consultancy Asset Insight. Tony
business jet manufacturers, in that it only mid-size business jets. The slowdown in Kioussis, Asset Insight President & CEO,
produces large cabin jets that target the China will definitely affect sales of large says “Aircraft Prices may be at a low point,
higher end of the market. The flagship cabin business jets and a glut of aircraft but Asset Quality of the “for sale” fleet has
Falcon 8X tri-jet will enter service this year. on sale in the pre-owned market has also not been this good since we began keeping
However, development of the Falcon 5X has resulted in lower prices for used aircraft. records – in January 2013.” Asset Insight’s
experienced substantial delays on account India remains underserved by business specific market sector analysis for Q1 2016
of troubles related to the development aviation, and though the Falcon is the most reflected the following: “The Large Jets
of Snecma’s Silvercrest engine. 2015 was popular large cabin business jet family in sector registered the best asset quality
a particularly severe year for Dassault India, the near term growth potential of the among the four aircraft groups, while
Aviation’s Falcon business jet division, market appears limited. Russia has also concurrently posting the lowest/best ETP
which saw a reduced order intake amidst a been affected by the fall in oil prices and Ratio, along with low Ask Prices. Indicators
difficult competitive environment. Falcon airframers are now finding it harder to sell suggest that there continue to be great
sales slowed in 2015, with only 45 business aircraft into Russia compared to few years value and excellent quality aircraft available
jets being ordered, as compared to 90 in before. When it comes to the market for for Buyers in the Large Jet segment. For
2014. The company was also impacted by used large cabin business jets, Eric Trappier the Medium Jet sector all indicators in this
the cancellation of a 20 aircraft order from CEO Dassault Aviation acknowledges, “The segment signal that prospective Buyers of
NetJets and the firm ended up delivering only preowned market is a changing thing and the Medium size jets should, following detailed
55 Falcon business jets in 2015, as compared price of aircraft is going down as the market due-diligence, make their purchase...... now
to the planned 65. The current economic slows down. If you own a pre-owned aircraft is an excellent time for Buyers to move on
situation, especially in emerging countries the price has to come down.” their considered purchase of a Medium size
has weighed heavily on Falcon orders which As GDP growth is Asia has slowed over jet.” For owners of large cabin business jets,
dipped by half in 2015 after four years of the last year, it has led to more business this is disappointing news. For those looking
impressive double-digit growth. Demand for jets, entering the pre-owned market and the for an aircraft with long range and a large
large cabin business jets has slumped in the rising inventory levels, have contributed to cabin that is in very good condition, this is
BRICS nations due to plummeting energy the downward trend in market momentum, the perfect opportunity to acquire these
sector revenue, economic uncertainty, and “The 1st quarter of 2016 sees the macro- jets at very attractive valuations.
currency fluctuations. Brazil which is an economic indicators, mood and intentions According to the 4th edition of the
important market for large cabin business and pre-owned aircraft inventory levels all (ASG) Business Jet Fleet which now covers
jets has not been doing well on account of worsen for the Asia Pacific region. A brief not only the Greater China region, but also
the drastic decline in oil and commodity respite experience in the 4th quarter of the important markets of India, Australia
prices. A major market in the South 2015, due to a typical year end spike in sales, and New Zealand, “The most popular added
American region, it will take a few more has passed and we are back to seeing the model across the region was the Global
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