aircraft market

FOR IMMEDIATE RELEASE

EDGEWATER, Md. - Aug. 23, 2019 - National Aircraft Finance Association (NAFA) is pleased to announce that Jack Prewitt & Associates, Inc. has recently joined its professional network of aviation lenders.

“NAFA members form a network of aviation finance services who diligently and competently operate with integrity and objectivity throughout the world. We’re excited to welcome Jack Prewitt to our growing organization as we head to our 50th anniversary,” said Jim Blessing, President of NAFA.

Jack Prewitt & Associates provides a comprehensive aircraft brokerage and acquisition service developed from extensive knowledge gained over the years of the aircraft markets, allowing them to effectively gauge the needs of their clients. The company prides itself on being an aviation partner with a track record of client success and satisfaction. 

The company serves their clients by first establishing what the client’s mission is when acquiring an aircraft, then providing up to date insight into the worldwide aviation marketplace. Their team identifies the best aircraft that fits their customers’ mission and negotiates a fair market price, all while guiding them through the purchasing process from “tip to tail”.

Over the last 40 years, Jack Prewitt & Associates has bought and sold over 1000 aircraft, largely through their extensive, exclusive network of contacts. As an inventory dealer, the company are experienced buyers as well as sellers. Via their leasing subsidiary, AEI, they also own six aircraft, including five large cabin jets, all on long-term lease. The company believes this varied experience sets them apart from the rest of the field.

Much like NAFA, Jack Prewitt & Associates, Inc. has experience in all facets of aviation and provides accurate market knowledge. Jack Prewitt and NAFA are passionate about the aviation industry and promoting excellence in service.

For more information about Jack Prewitt & Associates, Inc., visit nafa.aero/companies/jack-prewitt-associates-inc. 

About NAFA:  

The National Aircraft Finance Association (NAFA)is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit NAFA.aero.

NAFA member, Tony Kioussis, president of Asset Insight, forecasts prices to continue to increase through first quarter 2019.

January 22, 2019 – According to Asset Insight’s Year End 2018 Market Report (AI2 Market Report), demand for late model turboprops and large jets continued to increase in the fourth quarter of 2018 and helped drive a continued seller’s market with higher average selling prices.Excellent quality “for sale” aircraft are expected to drive prices up further in Q1 2019 as buyers’ and sellers’ expectations continue to converge on selling price.

The 4Q 2018 AI2 Market Report analyzes values for every production year of every modern make and model Business Class aircraft, while the Report’s maintenance analytics cover 94 fixed-wing models and 1,591 aircraft listed for sale.

Other trends detailed in the 4Q 2018 Market Report include:

• Ask Prices increased for all groups during Q4;

• Inventory aircraft with higher maintenance exposure relative to Ask Price, spent 57%

  longer on the market than comparable aircraft;

• Tracked fleet’s Quality Rating remained within the “Excellent” range and saw

  improvement in Q4 2018, over previous 12-month best ratings;

• Excellent Asset Quality improves Maintenance Exposure for most groups, except for Large

  Jets as the unsold inventory’s accrued/embedded scheduled maintenance increased (worsened).

  “Q4 continued the trend with sales of high-quality, recent models driving average selling prices higher” said Tony Kioussis, president of Asset Insight, LLC. “The seller’s market continued through the end of 2018, and we are forecasting increased prices well into 2019. However, buyers should continue to research the cost for pending maintenance events.”

  Note to editors, managers and owners: Please see the bottom right corner of each category page for a concise summary of the results and conditions in that specific market segment.

  Exclusively available from Asset Insight, the AI2 Market Report includes eTrend^TM, a 90-day forecast for aircraft value by make and model. This tool is especially helpful to sellers who are evaluating offers on their aircraft while concurrently considering if their prospects are likely to improve.

Statistically, Asset Insight's eTrend^TM forecasts are based on some of the most robust data analytics in the industry and have been thoroughly back-tested to confirm a significant degree of accuracy.

To download the complete Market Report covering Q4 2018, visit www.assetinsight.com or click here.

This press release was published on January 22, 2019 by Asset Insight.

NAFA member, Jetcraft, has released the findings from its fourth annual 10-year business aviation market forecast, building upon the 2017 prediction of a new business cycle of steady, healthy growth and expanding revenues.  

Jetcraft, the global leader in business aircraft sales and acquisitions, is today releasing its fourth annual 10-year business aviation market forecast.

The annual market forecast reaffirms that steady growth in the private jet industry is set to continue, with predictions of 8,736 unit deliveries over the next 10 years, representing $271bn in revenues (based on 2018 pricing). North America will once again take the lead, accounting for 60% (5,241) of predicted new unit deliveries over the forecast period, with Europe expecting 18% (1,572), and Asia-Pacific 13% (1,136).

Jahid Fazal-Karim, Owner and Chairman of the Board at Jetcraft, says: “2018 has been a real turning point for business aviation, as we have now successfully navigated through our industry’s most difficult period. This year’s forecast predicts the continuation of our current business cycle of steady and healthy growth, driven by an increase in wealth creation and the demand for larger and more expensive aircraft.”

The increase in wealth creation over the past decade has spurred growth in family offices that are now offering a wide variety of specialized services, including business aviation. Together with the increase in block charter and fractional programs, this is exposing more UHNWIs to the industry than ever before.

However, despite continued economic growth, Fortune 500 companies have yet to return to historical aircraft transaction levels, due to maintaining a focus on other financial priorities, such as share buybacks and paying down debt. This customer segment is unlikely to restart aircraft purchasing programs until well into the cycle.

The forecast predicts that the large jet category, comprising super large, ultra long range and converted airline segments, will constitute 32% of total units (2,778) and 64% of total revenue over the next decade. All new aircraft model programs, both announced and projected, during the forecast period are exclusively widebodies.

Fazal-Karim adds: “Predicted unit deliveries in the large jet category account for a huge proportion of total revenues in the industry, demonstrating the trend towards larger, long range aircraft to support today’s global business needs.”

While the industry is set to embark on a period of substantial growth, its resilience during the challenges of the previous business cycle has prepared it well for expansion.

Fazal-Karim concludes: “We’re confident that the lessons we’ve learned over the past decade will ensure sustainable growth for business aviation in the years to come. Ours is an enduring industry, and one with a buoyant future ahead.”

Jetcraft’s full 2018 10-year Business Aviation Market Forecast is available to download here. Report graphs available for publication on request.

This market report was originally published by Jetcraft on October 10, 2018.  

NAFA member, Brian Proctor, President and CEO of Mente Group, looks forward to firmer markets. 

AH: How was 2017 for Mente Group and what are your expectations for the year ahead?

BP:  That’s a big question! In 2017, last year in February at CJI, we did not know it yet, but the market had already started turning. I think we are now well past the bottom. For example, in terms of units, we see that in the G550 pre-owned market, twelve months ago there were 29 aircraft for sale. As we sit here today at the end of January, there are just 16 pre-owned G550s available for sale. In the Challenger 300 market there were 39 aircraft available, today there are 22. So, we have seen a massive amount of tightening in the pre-owned category. We still haven’t seen a corresponding price increase across the board, though some models are now increasing. 

AH: So the falling price of pre-owned aircraft is slowing?

BP: It has flattened, and I believe that the next iteration of aircraft coming onto the pre-owned market will be at a slight premium to today’s asking price. Our estimate is that some time  during the third quarter of 2018 we are going to see price increases, assuming that nothing happens to upset the market – no “game changers”!

AH: So, we could be looking at a very fortunate conjunction, with new models coming onto the market from the OEMs at the same time as the pre-owned market is shrinking.  That should be good for new purchases since there will be fewer, really attractive, pre-owned alternatives.

BP: The OEMs are probably in a very fortunate position, because the timing of what is happening in the pre-owned market will help them with their new models. However, with most of the new model entrants, the OEMs’ order books have not been as successful so far, as they would have hoped. That said, we are already seeing some people start to shift to new aircraft and that will be great for the OEMs. This is anecdotal, but it is illustrative. We have a client right now who contacted us about buying a pre-owned G280 and that market has just two aircraft available in the world and neither suits his criteria. So, we have shifted to a new search looking at new Challenger 300s and G280s. This is a clear instance of where the OEMs are benefiting from the lack of inventory in the pre-owned market. We are helping him through the comparatives between new and pre-owned. He was looking around the $16 - $17 million ballpark and now that we are a new buyer, we will be somewhere in the $19 - $20 million mark. With that, his out of pocket will be greater, but, with new tax laws in the US, he 
should be net-neutral.

AH: What do you think is driving this shift in the market?

BP:  I believe there are two components to this. The tax changes in the US are creating a significant amount of free cash flow, and this has happened at a stroke of the pen – plus a lot of lobbying! The President is definitely unlocking things. We are already seeing the implications in the market of more cash being available.  And in Europe, we can’t ignore what is going on with the dollar relative to  the euro. A $20 million dollar airplane today is 15% cheaper for a European buyer than it was a year ago. Which is nice, obviously. Now there is typically a lag between a price drop and sales. We have done a lot of statistical studies which graph the dollar’s value against a basket of world currencies, versus sales, and the correlation between sales volumes increasing and significant falls in the dollar value are about 80%, which is very strong. As the dollar weakens relative to this basket of currencies, over a period of time we see an influx of new buyers coming in. We are looking to trade that relationship right now. My guess is that around the third quarter of this year, as I said earlier, you will see sales picking up. 

AH: You must be loving this, because now, for the first time in a long while, you can say to a prospective buyer, don’t dawdle, the price will go up while you’re dithering. 

BP: My first slide in my CJI presentation says: “There has never been a better time to buy”. It is going to get much more expensive, and part of that will be driven by what happens to the dollar. If it drifts to 1.30 euros to the dollar from the current 1.23 euros, that will make the aircraft 10% less expensive for a European buyer. So again, this makes now a great time to buy if you are in Europe. Shifting out of fractional or charter into pre-owned or new today makes a lot more financial sense than it has for a decade. 

AH: Is there a rule of thumb for how much disposable net worth you should have in order to buy a jet at a certain price. For example, do you look for someone to have five or ten times the value of the aircraft available to them either as cash or credit?

BP:  What makes our firm different is that we do a lot more advisory work than most brokers. So our consulting practice will be engaged to do a feasibility study or a fleet planning study, and during that process we lay out the cost of ownership versus fractional, versus jet cards, versus charter. Very seldom do we ask, what does your cash flow look like, or how much are you worth? The decision is theirs to make when they have all the facts.  The thing is, these decisions are very personal. I have a client who is worth more than $10 billion and he refuses to buy an aircraft. I have another client whose net worth is probably under $50 million and he is looking for a Citation to buy. People make value judgments and it is impossible to call. I don’t tell people how to spend their money. We simply frame for them what it is going to cost and then let them make the decision. If I get a sense though that someone is overreaching, going for too big a stretch, I will recommend charter for a few years more. Don’t overspend yourself on an aircraft. Let your business grow a bit more. As my  grandmother used to say, “don’t ever buy something that will change your life if you lose it!”

This article was originally published in Business Aviation Magazine, Spring 2018. p. 14.