JETNET releases April 2011 and first four months of 2011 pre-owned business jet and business turboprop aircraft and helicopter market information | Press Release

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Press Release

Issued by JETNET.

June 6, 2011

JETNET releases April 2011 and first four months of 2011 pre-owned business jet and business turboprop aircraft and helicopter market information

JETNET LLC, the leading provider of corporate aviation information, has released April 2011 and the first four months of 2011 results for the pre-owned business jet, business turboprop, and helicopter markets.

Last month, JETNET reported that the 1st quarter 2011 pre-owned market showed early-stage recovery signs with expectations that 2011 would be a year of correction. In April this trend continues as JETNET reports double digit growth of 15.7% in pre-owned business jet retail sales transactions in the first 4 months of 2011, along with a decline in average asking price. The health of the pre-owned market sets the stage for new aircraft orders.

New Business Aircraft Deliveries

While the total percentage decline of deliveries across all aircraft sectors is down by 5% and total billings are down by 20% (or $1.9 billion), new business jet deliveries were down by 22% in 1st quarter 2011 compared to 2010.

Cessna is the only OEM in the quarterly comparison that did not report a decline in new business jet deliveries, with 31 business jets delivered in 1st quarters 2011 and 2010.

Embraer led all OEMs with the largest decline in the quarterly comparison.

However, new piston (both single and multi-engine) aircraft deliveries have improved by 13% in 1st quarter 2011 compared to 1st quarter 2010. This is very good news. Historically this is the first time since 2007 that new piston aircraft deliveries in the first quarter have increased. There were a record number of new piston deliveries of 600 in 2006.

US Economy

The U.S. Bureau of Economic Analysis (BEA) reported that real gross domestic product, the output of goods and services produced by labor and property located in the United States, increased at an annual rate of 1.8 percent in 1st quarter 2011 (that is, from 4th quarter to 1st quarter) according to the "second" estimate. In the fourth quarter, real GDP increased 3.1 percent. Historically, whenever the US economy shows a growth in GDP of greater than 3.0%, the business aviation market is in a growth mode. Next month BEA will release the final estimate of the US GDP for 1st quarter 2011, but the current estimate of 1.8% is a concern as 2011, the year of correction, continues to unfold.

Market Summary

Business Jet inventory For Sale percentage showed the largest change (down 1.2 points), to 14.3% from 15.5%. However, the only market sector to show an increase in for-sale inventory is the piston helicopter market, increasing 4/10 of a point, from 6.4% in April 2010 to 6.8% in April 2011.

Business Jet Sale Transactions increased 15.7% in the first four months of 2011 compared to the same period in 2010. Business turboprops also showed an increase of 3.5%. Both helicopter categories saw large double-digit declines in sale transactions (down 12.8% for turbine and 14.4% for piston) in the first four months of 2011 versus the first four months of 2010, a further softening of asking prices.

All Pre-owned aircraft categories showed large decreases in average asking price percentages except piston helicopters, which showed an increase of 4.2%. The decrease in the average asking price ranged from a -24.5% for business jets to -9.4% for business turboprops and -10.3% for turbine helicopters.

US Flight Operations—Domestic

U.S. Business Jet Domestic Flight Operations were 95,000 flights, or 25% below the peak level of 373,000 in October 2007 compared to 278,000 in April 2011. However, there has been an unsteady improvement from 225,000 flights in February 2009 to today, as reported by the FAA.

US Flight Operations—International

U.S. International Flight Operations reached 57,000 in April 2011. The April 2011 result was up 8.8% from April 2010 at 52,000, and down from the new record peak of 62,000 set in September 2010. However, the current April results have improved from 44,000 flights in January 2011. The low point was 40,000 flight operations in February 2009.

US JET A Fuel Prices

The 1st quarter 2011 U.S. Jet A Fuel Price of $6.05 per gallon is on the rise, up $.69 per gallon from $5.36 in 1st quarter 2010. However, current prices are well below the 2008 fuel price bubble of $6.83 per gallon.