JetSwiss Pilatus PULSE - October 2022

PILATUS PC-12 MARKET OVERVIEW FOR OCTOBER 2022

Well, here we are in the 4th quarter of the game (or business fiscal year for most). I’ve spent almost 25 years in business aviation and over 20 years specifically with the Pilatus program—and yet, every year at the start of the 4th quarter I always ask myself, “Why, in the world, is the phone ringing off the hook?!?!?” However, as of production date for this October Pulse, the phone has dust on it! So, what’s going on here?

Traditionally, every CFO in the world spends September crunching the numbers and evaluating where their business stands; hoping to then combine the 4th quarter forecast and establish their draft P&L totals. This has occurred, I am sure.

What has also occurred: the Dow has also dipped below 30,000, rates have been cranked up by the FED (probably more to come), and the word ‘recession’ is now in almost every article or news hour segment. Yes, I am sick of talking about it too. Herein lies the quiet before the storm…

What has not occurred for our aviation-loving audience: a November election, peace in Ukraine, China invading Taiwan, the Dow going back to 22,000, OR the massive amounts of ‘money on the sidelines’ being deployed to purchase capital assets like aircraft.

So, how is this affecting the Pilatus market you might ask? Simple. Supply and demand economics 101, combined with poor airline post-pandemic performance, and my personal favorite, the good folks of ‘Brokerville’ artificially pushing asking values up from 102% to 128% than the original sticker new price for any given model year! Yes, you heard this right. Let it soak in just a minute. This overinflated market, in conjunction with what has NOT OCCURRED (see above), is precisely why there is dust on the phone. We feel that the market is waiting for

the first shoe to drop. This may be a global event, further decreasing Dow, or more specifically, the Pilatus owner who wants to sell before year-end dropping his price. Maybe all three, who knows.

Last month we noted that we expected the end of the year to be as hectic as ever. There’s only one little problem—new aircraft deliveries are delayed from almost every OEM. We’ve confirmed this with several of our factory OEM contacts. This means that the used aircraft market is stalling to sell their aircraft. Sure, they’d love to capture all the money with the current inflated high market, but they also don’t like the idea of being without an aircraft for three months. Now, this is certainly not the case for every seller, but it is worth noting. Also worth asking, how many aircraft on the market are really for sale, or are they just throwing out silly asking prices (with the help of “Brokerville”)? As of today, roughly 40% of the market has been for sale for four to six months! This is nuts. Why do you ask? Because sellers are getting bad advice and they’ve been asking too much for their aircraft.

What I do know is our clients did not get to the level of success in life by NOT planning, NOT procuring the necessary resources, and by NOT surrounding themselves with expertise. Smart buyers today are engaging the right resources. They are preparing themselves for the best possible outcome, regardless of timing (end of the year). Conversely, the smart sellers are asking the right questions, analyzing the data, and pricing their aircraft correctly. When these two meet, an aircraft transaction will take place! Sounds simple, I know. We just may not see this little love affair consummated until November 5th, or perhaps in December. See the last page of the Pulse for further helpful hints.

Since our last Pulse issue, we’ve been working on a couple of move-up customer projects. These are clients that are coming out of their PC-12s and transitioning into light jets. We typically see two or three of these types of projects a year. They’re fun! We get to use the same playbook we use in the Pilatus world; we just get to go higher and faster! In addition to these projects, we’ve had one of our management clients’ aircraft in for an annual inspection, exported one of our inventory sales aircraft to Canada, and our marketing team has been putting the finishing touches on our buyer’s guide—look for this to be released in the coming weeks!

As always, we humbly submit ourselves to the betterment of our client base. Our referral network grows organically every day, and it’s through our partnerships and relationships that our success is measured. So, thank you to our past clients, our current clients, and to our many valued partners. We continue to be ener gized by you!

Fly safe, and we’ll see you next month, Bub

ASKING PRICE VS. MODEL

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ASKING PRICE

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HOW TO BUY A PC-12 BY THE END OF YEAR

So, you’ve found the perfect plane (or maybe you haven’t!) and now you’re ready to launch this aircraft ASAP—preferably before the holiday season, and DEFINITELY before 100% bonus depreciation runs out at the end of 2022. As the end of year rush sets in, it’s ‘go’ time.

Beyond the contract, transfer of dollars, insurance and taxes, there are many operational and technical events that can hold up the purchase process. Here are a few things to consider when buying a PC-12 in 2022.

1. GET YOUR HOUSE IN ORDER.

Make a calendar with key dates marking the “point of no return” and any points of financial and legal risk escalation. When the time comes, your business should be properly set up to take on ownership, your finances and insurance are in order and you have a plan for operations and/or management once the ink dries.

2. BOOK A TECHNICAL EVALUATION.

Finding a facility to take on a technical evaluation may be a larger task than you first imagined. Consider maintenance facilities slightly outside of major cities or schedule an eval on site. We are happy to help you perform an evaluation or point you in the right direction of the best way to accomplish a pre-buy inspection.

3. USE EXPERTISE TO YOUR ADVANTAGE.

It’s important to understand your position of strength as a buyer and at what point you have it. For example, don’t be afraid to use the Pilatus’ maintenance schedule to your advantage. Is there a minor repair that coincides with a maintenance event you could also consider? This is where an experienced PC-12 owner can get the most bang for their buck. By leveraging expertise you can minimize timing and continue the momentum on your project!

4. HAVE A PC-12 PILOT ON STANDBY.

You never know when contract details, legal issues or maintenance schedules will require you to move, literally. Know that you have an experienced PC-12 pilot ready to reposition the aircraft to keep the deal progressing on schedule.

JetSwiss has seen more pre-owned Pilatus transactions than anyone in the world. That said, every situation is unique. We hope that this little overview will help you prepare for your Pilatus PC-12 purchase. And as everyone’s year begins to fill up, remember who you can turn to for any advice and assistance regarding pre-owned Pilatus sales, acquisition and ownership. Read more on this concept and topics like this on our blog at jetswiss.com/news.

Founded in 2014, JetSwiss Aviation is a boutique aviation group specializing in acquisition, sales, management and operation of pre-owned Swissmade business aircraft. We see more pre-owned Pilatus projects than anyone else in the world. Interested in learning more about Pilatus ownership? Our experts are here for you. Please reach out to pilatus@jetswiss.com.

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