AvBuyer Magazine August 2022

FC Bombardier August 2022.qxp_FC December 06 20/07/2022 12:16 Page 1

Volume 26 Issue 8 2022

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ACTIONABLE INTELLIGENCE FOR BUSINESS AVIATION

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G Fastest | Farthest | Smoothest

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THIS MONTH Helicopter Comparison: Bell 206B-3 vs MD 500E

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Bonus Depreciation Ending: Buyers – Act Now! T

businessaircraft.bombardier.com

Even Plumbers Can Fly by Private Jet www.AVBUYER.com

Contents JULY22.qxp 26/07/2022 09:44 Page 1

THE BEST JETS FROM THE PEOPLE WHO KNOW THEM BEST.

When buying a pre-owned Falcon from Dassault, you’re not only investing in a jet that’s renowned for versatility, flexibility, and lasting value. You’re also making the most of your investment by going to the source. The people whose knowledge and experience will keep your Falcon flying for years to come.

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Contents JULY22.qxp 26/07/2022 09:46 Page 1

FALCON 7X 2009 – S/N 031

3297 hrs / 1038 cycles

• One US Owner since new • Impeccable maintenance history including full FalconCare enrollment • EASy II upgrades including Cert. 4 with Push to Load & Faster Chart Database Loading; SVS; CPDLC ATN-B1 & FANS 1A; ADS-B Out; WAAS-LPV, ADM; Dual Jeppesen Charts• Head Up Guidance System (HGS) and Enhanced Flight Vision System (EFVS) • Engines enrolled on ESP Platinum. APU enrolled on MSP Gold • Spacious Twelve passenger configuration with ten seats certified for TT&L. Large crew rest area with divan-style crew seat for TT&L. Excellent condition • 1C/2C inspection due December 2024. 12/24/36 month inspections scheduled August 2022. Landing gear overhaul complied with March 2021

FALCON 2000LXS 2014 – S/N 276

2141 hrs / 1924 cycles

• 8 Pax configuration with aft cabin dinning group, Fwd & Aft lavatories • Impeccable maintenance record and cabin condition • EASA part CAT compliant • EASy II cert 4: ADS-B Out, SBAS-LPV, SVS, RAAS, CPDLC ATN-B1 & FANS 1A, Push to load • Engines under ESP Gold (OC), APU under MSP Gold • 2C check due December August 2026 • Iridium Satcom

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Contents JULY22.qxp 20/07/2022 09:28 Page 1

Vol.26 Issue 8

Trends and Observations from Leading Business Aviation Analysts

Contents

2022

Market Indicators 10

26

Buying & Selling Aircraft Bonus Depreciation Ending: Buyers – Act Now

Ownership

32

The Three Leading Reasons to Fly Private

38

Even Plumbers Can Fly by Private Jet (Charlie Millins Interview)

42

Private Jets: What’s the Most Important Feature?

48

Planning Supplemental Lift for your Operation

52

58

64

Finance

Buying a Jet? Top Industry Asset-Based Loan Tips

Aircraft Price Guide

Very Light & Light Jet Aircraft Values

Helicopter Comparison Bell 206B-3 JetRanger III vs MD 500E

Flight Department Management

72

Aircraft Maintenance Choices: Getting them Right

76

Balance Demand With Pilot Wellbeing: The Pressures

80

Cabin Electronics

Installing USBs in BizJets: An Unexpected Challenge

EDITORIAL Commissioning Editor Matthew Harris +44 (0) 20 8939 7722 editorial@avbuyer.com Editorial Contributor (USA Office) Dave Higdon dave@avbuyer.com ADVERTISING Steve Champness Publisher Americas +1 770 769 5872 steve@avbuyer.com Maria Brabec Account Manager EMEA & APAC Aircraft & Services Sales +420 604 224 828 maria@avbuyer.com STUDIO/PRODUCTION Helen Cavalli Mark Williams +44 (0) 20 8939 7726 helen@avbuyer.com mark@avbuyer.com CIRCULATION Sue Brennan +44 (0) 20 8255 4000 Freephone from USA: +1 855 425 7638 sue@avbuyer.com AVBUYER.COM Michas Rapf michas@avbuyer.com Emma Davey emma@avbuyer.com

Avionics

MANAGING DIRECTOR John Brennan +44 (0) 20 8255 4229 john@avbuyer.com

101

Marketplace

USA OFFICE 1210 West 11th Street, Wichita, KS 67203-3517

106

Advertisers’ Index

106

Aircraft for Sale Index

90

Worldwide Aviation Digital Communications: An Overview

Next Month

EUROPEAN OFFICE AvBuyer House, 34A High Street, Thames Ditton, Surrey KT7 0RY, UK +44 (0)20 8255 4000 Freephone from USA: +1 855 425 7638

• Tips to Make Cross-Border Transactions Easier • Cybersecurity Tips for Cockpit and Cabin • How is Aircraft Ownership Impacted by Registry?

4 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

PRINTED BY Fry Communications, Inc. 800 West Church Road, Mechanicsburg, PA 17055 www.AVBUYER.com

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Contents JULY22.qxp 26/07/2022 10:28 Page 1

Contents JULY22.qxp 26/07/2022 10:19 Page 1

TRADING.GENEVA@SPARFELL.AERO / +41 22 787 08 77 TRADING.USA@SPARFELL.AERO / +1 301 525 4380 TRADING.SINGAPORE@SPARFELL.AERO / +65 6221 0989 CHARTER, MANAGEMENT, SALES & ACQUISITIONS, LEASING, DESIGN

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2002 BOEING 737-700 BBJ OFF-MARKET

2011 CHALLENGER 605 OFF-MARKET

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1998 CHALLENGER 604 OFF-MARKET

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Contents JULY22.qxp 26/07/2022 10:24 Page 1

Just Sold File Picture File Picture

LEGACY 450 S/N 8

2015 PHENOM 300 OFF-MARKET

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3’000 Total Hours, EASA, On JSSI and EEC standard

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GLOBAL 6000/6500/7500

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GULFSTREAM 500/600/650ER

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CHALLENGER 604/605/650

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PHENOM 300/300E

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MarketIndicators.qxp_Layout 1 18/07/2022 16:33 Page 1

MARKET INDICATORS

Business Aviation Market Overview

T

For those concerned about the impact of economic uncertainty on the aviation industry, Brian Foley offers words of encouragement: Business Aviation can weather a mild recession (and may even benefit). Here’s why…

here has been a lot of discussion of if and when the current economic slowdown could manifest itself into a full-blown recession. Defined as two consecutive quarters of negative GDP growth, there are those who believe it could happen later this year or next. Still more who think it will never happen.

And there are others who think we’re already in a recession.

In the US, the world’s largest Business Aviation market, GDP growth was already minus 1.6% for the first quarter of this year. By the time you read this article the second quarter advance 10 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

estimate will have been released and we’ll all know whether we’re in a recession already. But it won’t really matter…

A Different Kind of Slowdown

This would arguably be a different kind of slowdown than we’ve typically seen in the past. Strangely, the job market remains robust despite a slowing economy. Consumer spending drives the economy, and having a job should keep the spigots flowing albeit at a reduced rate in this inflationary environment.

Business Aviation is arguably better

prepared to weather the storm than other industries. It already has a lot of built-in reserves should the sledding get tough.

Take, for example, the pre-owned aircraft inventory for sale which currently stands at 4% of the business jet fleet, according to AMSTAT. This is well below the historical average of 10-12%, which allows for a lot of wiggle room should the economy take a header.

Similarly, business jet utilization, which is a monthly measure of the number of take-offs and landings, has been at all-time highs. Taking a little ‘haircut’ wouldn’t necessarily be www.AVBUYER.com

MarketIndicators.qxp_Layout 1 18/07/2022 16:34 Page 2

AVBUYER.com BRIAN FOLEY

formed Brian Foley Associates (BRiFO) in 2006 to assist aerospace firms and investors with strategic research. In addition to his work as Market Intelligence Editor, AvBuyer, he is a regular contributor for Forbes.com and his views are published in the media worldwide.

Brian serves the Transportation Research Board as a member of the Business Aviation, helicopter, commercial airline and UAV system subcommittees, and he previously served on the Board of a Wall Street financial firm. Before starting his consultancy business, Brian was marketing director at Dassault Falcon Jet for 20 years, and started his career at Boeing. He is an instrument-rated private pilot. https://www.linkedin.com/in/brifo/

“The next economic slowdown would be unlikely to resemble anything like the catastrophic 2009 financial crisis, and indeed may even be a benefit.”

unwelcome, given that providers such as charter, fractional and MRO centers have been stretched to offer an acceptable level of availability and service to their clients.

Slowing down just a bit would allow these providers to catch their breath during a period of high demand, while getting adequately staffed in this tight job market.

Even the new business jet manufacturers have some winter fat reserves to endure a slowdown. Delivery lead times are being pushed out to two or more years, while backlogs have consistently grown.

Some OEMs are challenged by supply chain issues and the need for more skilled workers, and currently risk losing loyal customers prepared to switch brands to one that can deliver a little bit sooner. www.AVBUYER.com

Other Fringe Benefits of a Slowdown

There are other fringe benefits of a slowdown as well. During an economic downturn the price of oil often declines due to a drop in demand from industry.

With Jet A fuel currently hovering near US$9 per gallon at Teterboro Airport, any kind of respite would be welcomed by aircraft operators.

A rising interest rate environment could even help aircraft lessors who were being outgunned by finance companies who were practically lending free money in the recent past. And airlines cutting back schedules could even provide some benefit to help our industry’s flight crew staffing struggles.

In Summary…

The next economic slowdown would be unlikely to resemble anything like the

catastrophic 2009 financial crisis, and indeed may even be a benefit.

• Pre-owned inventory would have time to restock itself to more typical levels.

• With less utilization, service providers could more easily achieve their expected level of exemplary service.

• New aircraft makers could deliver in a more reasonable time.

• The industry overall would finally have the luxury to adequately staff-up.

We’re in a new paradigm of increased industry demand by those who have either discovered private aviation, or have become more committed to it. This elevated level of activity will help the industry better endure the next downturn.

MI www.brifo.com page 14 AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

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MarketIndicators.qxp_Layout 1 18/07/2022 16:35 Page 3

MARKET INDICATORS

AVBUYER.com

Flight Activity - Global For the first six months (H1) of 2022 there were 2.7 million Business Aviation flights, according to WingX Advance.

Business jets and turboprops flew 22% more sectors than in H1 2021, and 15% more than in H1 2019.

While the turboprop rebound was weaker, business jet activity was up 27% compared to H1 2021, and 21% ahead of H1 2019. By comparison, scheduled airline sectors ended the period almost 30% behind H1 2019 activity.

North America

The pace of the rebound in business jet demand slowed somewhat, most evidently in the key North American market.

Year to Date (YTD), business jet flights were up 20% compared to a year ago, whereas June 2022 saw a 7% increase compared with June 2021.

The gains over 2019 have been sustained, with a 20% increase YTD, and a 21% increase in June 2022 over June 2019. On a week-to-week basis, however, June began to show some signs of slowing. During the Fourth of July weekend, business jet activity fell 5% short of 2021’s record spike, although it was still 32% ahead of 2019.

Europe

Almost 300,000 business jet sectors were flown in Europe in H1 2022, 38% more than in H1 2021, and 17% more than H1 2019.

Inevitably the rebound on 2021 has slowed as the year has elapsed, with June’s data showing a 21% increase on June 2021. Nevertheless, the increase on June 2019 has grown with 19% more bizjet activity in June 2022.

• • •

June was a particularly strong month for the UK; 84% more bizjet departures year-on-year.

Portugal, Turkey, The Netherlands, and Sweden all saw >40% more activity in June 2022 compared to June 2019.

Bizjet activity in Russia stabilized in June at 60% below where it was pre-pandemic.

Rest of the World

Outside Europe and North America, the rebound in bizjet activity H1 2022 grew 22% compared to H1 2021, and 17% in June 2022 versus June 2021.

• •

Saudi Arabia and Morocco have seen strong rebounds on their relatively travel-restricted 2021, with activity up almost 50% in 2022.

The UAE, resilient throughout the pandemic, is up only 3% in H1 2022 compared to H1 2021.

14 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

• •

Nigeria, Argentina, South Africa and Philippines each recorded notable growth on their pre-pandemic levels.

China’s bizjet activity has tanked with the reimposition of restrictions, down 40% on comparable flight activity in H1 2019.

“The first half of the year set a new record for global business jet demand, and although the rebound is slowing, the gains on 2019 have held steady at around 20%,” Richard Koe, Managing Director, WingX summarized.

“The Fourth of July holiday period confirmed that airlines are coming back, especially in the US, and there is arguably a correlation with bizjet demand tapering, down 5% on last year during that weekend. Meanwhile, the European summer demand has hit new heights as the summer holidays start in earnest.”

MI www.wingx-advance.com

page 18

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2022-06-10 14:24

Contents JULY22.qxp 26/07/2022 09:58 Page 1

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Contents JULY22.qxp 26/07/2022 09:55 Page 1

Worldwide aircraft sales

at the speed of life

More makes, more models, more choice.

Use the QR Code or visit jetcraft.com/aircraft to view our list of

available aircraft.

7 /1 1 /2 2

6 :5 5 AM

MarketIndicators.qxp_Layout 1 18/07/2022 16:36 Page 4

MARKET INDICATORS

Are We All Seeing the Same Thing?

There are some mixed messages for those closely monitoring pre-owned business jet sales activity at the moment. James Hagerty, President and CEO of Hagerty Jet Group, offers his insights…

At the June NBAA Regional Forum at White Plains, the convention floor was booming with energy. Many of our peers report they are busier than ever. Charter demand is through the roof. Aircraft brokers all claim they have buyers and are closing deals. Business is challenging, but doing well.

I was quickly reminded why our industry is having a renaissance moment when I spent nearly 24 hours stranded at La Guardia upon my return from the Regional Forum. The commercial airline system is broken and it’s not an easy fix. We have a serious pilot and staffing issue to contend with. If America and the rest of the world need to get back to business, they need reliable transportation.

AVBUYER.com We are just beginning to see pre-owned business jet inventory levels increase and stabilize, but we are still very far from the normal 8-10%.

Inventory levels for aircraft aged five years or younger remain at record lows. Backlogs at the OEMs remain strong with few – if any – positions remaining available in 2023. There has been a shift, however. We’re no longer seeing airplanes going under contract on the same day they enter the market.

And more brokers are publishing their ask prices.

Those ask prices are higher than before, and we’ve seen only a handful of price reductions, but we are not seeing bidding wars. Buyers are slowing down their pace and taking their time. They do, however have factors working against them – such as interest rate hikes.

We note a few dealers nervously sitting on inventory they probably expected to sell by now. For US buyers seeking the 100% bonus tax depreciation by the end of the year, they had better get moving, because inspections are taking longer than ever. (The wait time to get a slot for a pre-buy inspection is 4-6 weeks.)

Parts are also becoming harder to find. Items like windshields have big backlogs and take weeks to deliver.

Prices Heading Down?

The word on the street is that aircraft prices are coming down.

Hagerty Jet Group would tend to agree that the market arguably peaked earlier this year, but we don’t see a huge disruption in the immediate future.

Perhaps the market was overinflated by 10% in Q4 2021 and we see ourselves back at those price points by the end of the year. What we don’t expect is a 30% correction taking us back to 2Q 2021.

We would need to see a significant amount of inventory come available for sale to put that kind of pressure on the market.

MI www.hagertyjetgroup.com

Single-Engine Pre-owned Heli Market Trends Aero Asset’s inaugural Heli Market Trends Report for singleengine pre-owned helicopters compares H1 2022 market performance with H1 2021, and reveals that supply of aircraft for sale continued to shrink on a slightly lower transaction volume.

According to Valerie Pereira, VP of Market Research at Aero Asset, “Retail sales volume decreased 10% in the first six months of 2022, compared to 2021. During the same period, supply for sale decreased by 65%.”

VIP Configurations

By far, VIP configured helicopters accounted for most of the single-engine deals in H1 2022, at 60%. EMS configured supply for sale dropped to historic lows and utility configured supply available for sale dropped 75% YoY. The most liquid pre-owned market during H1 2022 was the Airbus AS350 B3/B3e/H125, followed by the Bell 407/GX/P/I and the Airbus EC130 B4/H130. All three models boast only three months of supply at 2022 trade levels. The least liquid pre-owned market during the same period was 18 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

the Leonardo AW119K/Ke/Kx, with an absorption rate of 10 months. page 20 MI www.aeroasset.com/report www.AVBUYER.com

AeroBuyNow August.qxp_Layout 1 19/07/2022 10:31 Page 1

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MarketIndicators.qxp_Layout 1 18/07/2022 16:40 Page 5

MARKET INDICATORS

AVBUYER.com

Table A Fleet Maintenance Condition

In-Service Aircraft Maintenance Condition & Marketability As Q2 2022 came to a close, Asset Insight’s tracked fleet inventory for sale increased for a third consecutive month, possibly signalling a trend.

While Large and Medium Jets were the only groups to post an availability increase, June’s 4.9% rise (+37 units), along with certain other data points, could possibly indicate the return of traditional aircraft buyers.

Total inventory increased 13.3% in Q2, and 10.5% Year-to-Date (YTD), equating to a 45.4% decrease Year-over-Year (YoY). Listings remain 52.9% below the June 2020 peak.

Aircraft Values

The average Ask Price for the tracked fleet increased 12.3% in June, 13.2% in Q2, 26.5% YoY, and 57.0% YTD. While transactions for young, low-time units are still closing at higher values, the volume of ‘off market’ assets is decreasing, partially evidenced by the higher number of listed aircraft for sale.

Inventory Fleet Maintenance Condition

Both the Quality Rating and Maintenance Exposure value remained unchanged for the quarter – specifically: Quality Rating: The listed fleet’s Quality Rating improved 0.1% for June to 5.310, following May’s 5.303 on Asset Insight’s scale of -2.5 (low) to 10 (high). The fleet remained within the ‘Excellent’ range, and the figure also reflected a 0.5% improvement YoY. Maintenance Exposure: The cost of embedded/accrued maintenance, what Asset Insight refers to as Maintenance Exposure, worsened/increased 1.6% in June to a figure that was also 3.7% higher YoY. The increase signifies that upcoming maintenance events will be more expensive to complete.

Maintenance Exposure to Ask Price (ETP) Ratio

After posting an all-time high/worst 82.1% value to start off the year, increasing Ask Price figures helped the ETP Ratio post a 12-month best/low figure in June, and all but the Light Jets experienced an improvement.

The ETP Ratio is a useful indicator of an aircraft’s marketability computed by dividing the asset's Maintenance Exposure (the financial liability accrued with respect to future scheduled maintenance events) by its Ask Price.

‘Days on Market’ (DoM) analysis has shown that when the ETP Ratio is greater than 40%, a listed aircraft’s time on the market increases, usually by more than 30%. During Q2, assets whose ETP Ratio was 40% or higher were listed for sale nearly 156% longer (on average) than aircraft whose Ratio was below 40% (183 versus 469 Days on Market).

In June, more than 39% of the tracked models, and over 42% of all listed aircraft, posted an ETP Ratio above the 40% ‘excessive’ mark.

Market Summary

Availability for the tracked models increased to 3.5% of the active fleet in June, compared to 3.1% at the end of Q1. Demand remained strong at 4.66 on our scale of zero (no demand) to five (maximum possible demand), but dipped slightly from 4.68 at the end of Q1.

20 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

$ Mil

5.40 5.310

5.30

$1.54

$1.50

5.20 5.10

$1.60

J

A

S

Quality Rating

O

N

D

J

F

Maintenance Exposure

M

A

M

J

$1.40

Quality Rating Trendline

Table B CL-650 3.1% Citation CJ3+ 4.0% CL-350 5.1% G650ER 5.3% F2000LX 8.4% Legacy 500 8.6% F7X 9.5% Citation CJ4 525C 9.7% Global 6000 11.5% Phenom 300 11.6% Legacy 650 12.5% Caravan 208-675 13.5% King Air 350 - Post-2000 13.8% Citation CJ3 14.2% Pilatus PC-12 14.6% F900EX 15.0% G150 15.1% CL-605 15.5% Citation CJ2 16.5% TBM 850 18.0% Global 5000 18.1% Citation XLS 19.4% Hawker 900XP 19.5% F50EX 19.9% G550 20.0% King Air B200 - Post-200020.1% Citation CJ2+ 525A 20.2% Citation Sovereign 680 21.2% Piper Meridian 22.0% Hawker 850XP 22.4% Phenom 100 23.2% Hawker 400XP 25.6% G200 26.8% Global XRS 27.0% Global Express 28.6% Piaggio P-180 II 29.1% F2000 29.4% Caravan Grand 208B 29.4% GV 30.9% Citation V Ultra 31.6% Premier 1A 32.6% Citation Excel 560XL 33.4% Learjet 45 w/APU 34.2% Citation Mustang 510 34.8% Learjet 60XR 36.0% CL-604 36.0% King Air B200 - Pre-2001 37.4% King Air 300 39.8%

Learjet 40XR Hawker 800XP Learjet 60 Citation CJ1 King Air 350 - Pre-2001 Citation V 560 GIV Premier 1 TBM 700A F50 CL-601-3R Piaggio P-180 GIV-SP (MSG3) Hawker Beechjet 400A Hawker Beechjet 400 Hawker 800A Learjet 31A GIV-SP Citation II Citation I King Air C90 F20-5 Citation ISP Learjet 31 CL-601-3A Citation III Citation Bravo Learjet 55 Learjet 35A GIII Hawker 125-700A

41.1% 42.3% 44.9% 45.0% 48.1% 52.2% 59.7% 60.0% 60.3% 61.1% 62.3% 68.6% 69.8% 70.9% 76.0% 86.4% 92.1% 93.9% 114.2% 119.4% 121.9% 134.8% 138.7% 144.4% 151.4% 153.7% 154.4% 168.7% 200.5% 207.6% 303.8%

Maintenance Exposure to Ask Price Ratio (“ETP Ratio”) as of June 30 2022 page 22

Source: JETNET (www.jetnet.com) Asset Insight, LLC (www.assetinsight.com)

www.AVBUYER.com

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MarketIndicators.qxp_Layout 1 18/07/2022 16:41 Page 6

MARKET INDICATORS

AVBUYER.com

Large Jets

Mid-Size Jets

Ask Price vs. Maintenance Exposure

Ask Price vs. Maintenance Exposure

$ Millions

$3.00

Jun-22

May-22

Apr-22

$1.20

Asset Quality Rating

Asset Quality Rating

Scale -2.500 to 10.000

Scale -2.500 to 10.000

5.300

6.000

5.207

5.200

5.800

5.546

5.600

5.100 5.000

The fact that no group posted an increase while demand for all jet groups decreased, may signal a softening in the first-time buyer frenzy.

Quarterly sales increased to 523 during Q2 (versus 416 during Q1), which was down from 539 during Q2 2021, and YTD were down from 962 in 2021 to 939.

Average Days on Market decreased to 301, the lowest figure posted during the past four years. Keep in mind, though, that older listed aircraft with a high ETP Ratio continue to linger, as evidenced by the 156% DoM differential noted above.

Overall, the market is buoyant. While some data may suggest slower growth ahead, that’s to be expected considering the pace of recent activity.

Large Jets: Asset Insight recorded 140 Large Jet transactions during Q2

across 43 models, compared to 120 during Q2 2021, and 108 during in Q1 this year. Availability increased 17.1% (25 units) in June to 3.3% of the active fleet, 23.9% (33 units) during Q2, and 1.8% YTD (three units).

The figures represent an availability decrease of 50% YoY. Demand continued to be strong during Q2 at 4.82, although that was down slightly from Q1’s 4.87.

The group’s Quality Rating decreased 1% during June, 5% for Q2, and 0.5% YoY, but June’s 5.546 still left the group in ‘Outstanding’ territory.

Maintenance Exposure took an unhealthy turn, rising/worsening 3.5% in June, and 2.7% YoY – but the change reflected a 0.1% improvement/decrease over Q1.

Ask Price increased 5.7% in June, but was actually 4.1% lower for the quarter. Compared to last year, the figure is up 38.5%, including 28.5% YTD. Based on these figures, the ETP Ratio remained steady at 34.1% (the group’s 12-month low/best figure), representing an 11% improvement (decrease) for the quarter, 44.2% YoY, and 48.1% YTD. The ETP Ratio also represented the fourth consecutive month the Large Jet group has been below the 40% ‘excessive exposure’ point.

Jun-22

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

Jun-22

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

4.900 Jul-21

5.400

Mar-22

$2.00

$1.30

$1.32

$2.50 Jan-22

$2.80

$1.40

$3.50

Feb-22

$3.00

$4.00

Dec-21

$3.20

$4.50

Nov-21

Jun-22

Apr-22

Feb-22

Mar-22

Jan-22

Dec-21

Oct-21

Nov-21

Sep-21

Jul-21

Aug-21

May-22

$3.31

$12.0

$1.50

$4.87

Oct-21

$3.40

$15.0

$9.0

$3.60

$5.00

Sep-21

$18.0

$3.80

Aug-21

$16.78

Jul-21

$21.0

$ Millions

Mid-Size Jets: Asset Insight identified 158 transactions during Q2 2022,

exactly matching Q2 last year, and an increase from the 102 trades posted during Q1.

Availability for the 45-model tracked Mid-Size Jet fleet rose to 205 assets during June (3.8% of the active fleet), an increase of 13.3% (24 units) that left inventory up 15.2% for the quarter, but 11.3% lower YTD, 46.6% lower YoY, and 59% below the June 2020 peak. Demand remained high at 4.57, and just below the 4.58 figure posted during Q1.

The group’s 5.207 Quality Rating was better than the 12-month average, and kept Mid-Size Jets within ‘Very Good’ territory. It also reflected a 1.3% improvement for the month and 1.7% for the quarter.

Nevertheless, the figure was 2.2% worse YoY. Maintenance Exposure improved/decreased 6.5% for the month, and 6% for the quarter – but it was nearly 7% higher YoY. In terms of Ask Price, the statistics are impressive with the group posting a 7.8% increase that equated an all-time high value. It was also 36.2% higher than last quarter, 66% up YoY, and 125% higher YTD. Combined, the Ask Price and Maintenance Exposure figures led to an ETP Ratio improvement equating to 56%, a 12-month low/best figure that was also 19% lower than last quarter, 18.6% YoY, and 33% YTD. While the group’s ETP Ratio is not stellar, it is sufficiently low to provide many sellers with value-based transaction opportunities, considering the limited inventory.

Light Jets: Demand for Light Jets decreased slightly in Q2, dropping to

4.50 compared to Q1’s 4.53. Listed aircraft for the 29-model tracked fleet decreased by 2.3% (six units) totaling 253 assets (4.2% of the active fleet).

While inventory is down 5.2% YTD, it is 12.4% higher for Q2. There are still 36.4% fewer aircraft available compared to last June, and 53.4% fewer than the June 2020 peak. Transactions were down to 130 (compared to 159 during Q2 2021, and 144 in Q1 2022).

The Quality Rating worsened 1.6% to 5.264 in June, but was 0.9% page 25

22 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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MarketIndicators.qxp_Layout 1 19/07/2022 13:45 Page 7

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MARKET INDICATORS

Light Jets

Turboprops

Ask Price vs. Maintenance Exposure

Ask Price vs. Maintenance Exposure

$ Millions

$2.28

$2.30

$1.75 $1.55

higher for the quarter, and 3.9% YoY, and it kept the group within the ‘Excellent’ range. Maintenance Exposure rose 8.5% to post the group’s 12-month worst figure, which was also 13.1% higher than in Q1, and 2.3% worse YoY. Ask Price decreased 1.2% following May’s 9.3% increase (a number that set an all-time high value), but the figure was 4% higher for the quarter, up 48.5% YoY, and up 71.4% YTD. Based on these values, the ETP Ratio rose to 88.5% from last month’s 88%, but the figure reflected a 2.2% improvement for the quarter, 22% YoY, and 25% YTD. While the ETP Ratio figure is high, many sellers are no-doubt pleased the number remains comfortably below the triple-digit levels posted only a few months ago.

Turboprops: Demand remained at 4.75 for Turboprops. Availability

decreased 3.6% (six units) leaving listings at 162 units (3% of the active fleet), a figure 25.7% lower YTD, 3.2% higher for the quarter, 50.3% lower YoY, and 38.2% lower since the June 2020 peak.

At 95 units, sales for Q2 2022 were below the 102 transacting during Q2 2021, although the figure was higher than the 67 trades posted during Q1.

The Quality Rating and Maintenance Exposure figures both set 12month bests in June. The former, at 5.222, kept the group in ‘Very Good’ territory through a 1.9% increase for the month, 3.3% for the quarter, and 0.7% YoY. Maintenance Exposure decreased 0.8% during June, 5.6%

Apr-22

May-22

Feb-22

Mar-22

Jan-22

Dec-21

May-22

Apr-22

Mar-22

Feb-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

5.222

Jul-21

Jun-22

May-22

4.900

Apr-22

5.000 Mar-22

5.000

Feb-22

5.100

Jan-22

5.100

Dec-21

5.200

Nov-21

5.200

Oct-21

5.300

Sep-21

Nov-21

5.300

5.264

Aug-21

5.400

Aug-21

Oct-21

Scale -2.500 to 10.000

Scale -2.500 to 10.000

Jul-21

$0.50

Asset Quality Rating

Asset Quality Rating

Asset Quality Rating Key Outstanding Excellent 5.500 5.250 or to Greater 5.499

Very Good 5.000 to 5.249

Good 4.750 to 4.999

Below Average Average 4.500 Less to than 4.749 4.500

during Q2, and 3.4% YoY. Ask Price rose 5.9% (a 12-month high) during June, 11.8% during Q2, 14% YoY, and 19.2% YTD. Not surprisingly, these statistics lowered the ETP Ratio to a 12-month best 36.4% (the group’s second consecutive month below the 40% level) that was also a 17.9% improvement for the quarter, 13.8% YoY, and 14.6% YTD. Offering the largest selection per model at 9.1 units, based on our 17model tracked fleet, the average marketability figure should help Turboprop sellers maximize their aircraft’s transaction value.

MI www.assetinsight.com ❚

TONY KIOUSSIS is President & CEO of Asset Insight, providing valuations, audits, analytics and consulting services, and a uniform methodology for grading an aircraft’s maintenance condition. Previously he worked with GE Capital’s Corporate Aircraft Finance group; Jet Aviation; and JSSI, developing the “Tip-to-Tail” airframe maintenance program. https://www.linkedin.com/in/tony-kioussis-a366b28/

www.AVBUYER.com

Sep-21

$0.53 Jul-21

$1.45

$0.85

Jun-22

Apr-22

Feb-22

Mar-22

Jan-22

Dec-21

Nov-21

Oct-21

Sep-21

Jul-21

Aug-21

May-22

$1.01

$1.50

Aug-21

$1.70

$0.55

$1.65

$0.95

Jun-22

$1.90

$1.30

$1.85

$1.05

$2.10

$0.60

$1.90

Jun-22

$2.50

$ Millions

$1.95

UNDERSTAND THE BIZAV MARKET with AvBUYER.com

AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

25

Buying&Selling 1.qxp_Finance 18/07/2022 15:37 Page 1

BUYING & SELLING AIRCRAFT

Bonus Depreciation Ending: Buyers – Act Now! Looking to take advantage of 100% Bonus Depreciation in your next business aircraft acquisition?

With time running out, what’s your best strategy?

Leading aircraft brokers Jim Donath, Johnny Foster and Janine Iannarelli share with Dave Higdon…

T

hough it’s not a celestial alignment, it has a lot of people looking to the heavens while their financial people pull together the data needed to claim a sun-setting tax deduction while they still can. 100% Bonus Depreciation is due to end at midnight, December 31, 2022. As of January 1, 2023, the incentive drops to 80%.

Unless the buyer already possesses their new aircraft, or is ready to act very soon on their intention to purchase one, the mere act of buying and taking delivery may take more time than remains in 2022 – especially for those failing to account for some of the challenges faced by the industry at this time.

“Supply of inventory remains the business aircraft sales industry’s big challenge,” notes Johnny Foster, President and CEO of OGARAJETS. “Despite an approximately 30% rise in overall supply over the previous 90 days [as of early July 2022], most make/model markets still have only 2-3% of fleet available for sale. Historically, this figure 26 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

hovers around 10% in a balanced market.

“On the new side, the OEMs have full order books on most business aircraft makes and models for at least the next 24 months. Several models are pushing into 2025 now before a buyer placing an order today could expect to take delivery of their new airplane.”

Capitalizing on the available 100% depreciation requires buyers to take delivery of their aircraft, and conduct one business flight, before the clock strikes midnight on New Year’s Eve, according to Janine Iannarelli, Founder and President of Par Avion Ltd. So, what is a buyer to do with time running so short, especially with the scarcity of pre-owned inventory on the market right now?

“Pre-owned aircraft buyers wanting to take advantage of Bonus Depreciation in 2022 should become active immediately, if they haven’t already,” Jim Donath, President of Donath Aircraft Services, says. “Even though inventory is on the rise, it remains low on an historic basis, www.AVBUYER.com

Buying&Selling 1.qxp_Finance 18/07/2022 15:38 Page 2

AVBUYER.com

and acting sooner, rather than later, is likely to present buyers with more opportunities.”

“It is not too late to take advantage of 100% Bonus Depreciation as pertains to an aircraft purchase,” Iannarelli assures. “However, if you have not secured an aircraft by October 1, I would start to become a bit concerned whether or not you could follow a traditional path to a purchase and conclude the sale by December 31.”

Iannarelli also highlights that while 100% depreciation is available in this calendar year, “depending on the use of the airplane, buyers may not qualify to take the full deduction" – for example, buyers purchasing a jet primarily for personal and/or leisure travel will not be eligible.

“It’s important to understand what qualifies or disqualifies you to benefit from Bonus Depreciation and not just assume it applies to you. This is just one of many examples where having an experienced broker represent you pays.” www.AVBUYER.com

Both Donath and Iannarelli highlight access to MRO shops could be the prohibitive factor for those cutting their margins too fine.

“A limiting factor that buyers will face in the fourth quarter is capacity at service centers for pre-buy inspections – planning for that now is critical,” Donath warns. “Buyers should anticipate more time being required for an inspection to take place, and for discrepancies to be corrected in order for the aircraft to be returned to service.”

“Right now, lead time for input to an OEM service center can be as long as 8-10 weeks for a pre-purchase inspection,” Iannarelli highlights. “That being said, there is a number of FAA approved maintenance facilities – as long as they are authorized to work on a particular make and model of airplane – which buyers can turn to.”

“Some buyers were forced to limit, or even skip, prebuy inspections last year,” Donath adds. “This should be avoided wherever possible, and the best way to do that is AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

27

Buying&Selling 1.qxp_Finance 18/07/2022 15:39 Page 3

BUYING & SELLING AIRCRAFT

start the acquisition process, including pre-buy inspection planning, immediately.”

The Role of Bonus Depreciation in the Market Surge

Anyone familiar with Business Aviation over the past five years almost certainly understands that tax law changes four years ago helped trigger the boom in private jet demand that continues today.

Demand for pre-owned aircraft shot off the scale over the past three years, due to the growing realization of Business Aviation’s benefits during the Covid pandemic that brought many first-time users to the table, many of whom have since become first-time owners.

The elevated demand in recent years, however, may not have been as pronounced without the added tax incentives. To gauge the impact on business aircraft sales one needs only digest the sales figures and ask the dealer/broker community about the correlation. “[100%] Bonus Depreciation steadily gained favor since becoming available in 2017,” Foster explains. “By 2021, the combination of a strong desire to return to travel but in the safety and convenience of a private aircraft, ridiculously low interest rates, and 100% available depreciation were simply too hard for buyers to pass-up, creating a surge from first-time buyers. (Some estimates are that as many as 30% of buyers in 2020-2022 are firsttime owners.)

“With all that said, we are finding many of our clients are unable to take all 100% in Year One, or are finding

28 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

AVBUYER.com

there are fewer benefits in doing so. Instead, they’re opting to utilize the more traditional Modified Accelerated Cost Recovery System (MACRS) schedule.”

The MACRS depreciation method allows for larger deductions in the early years of an asset's life, and lower deductions in later years. For example, for Part 91 (private) owners this tends to take place over a five-year period, whereas Part 135 Charter operators will depreciate over a seven-year period.

Prediction: Busy Final Quarter

Ultimately, business aircraft sales have held-up for much of the past decade, defying the ups and downs of the general economy. But in the world of the here-and-now, other influences are coming to bare, challenging the world markets in several areas. What lies ahead over the remainder of the year in the pre-owned market?

“I believe Bonus Depreciation will be a factor in the pre-owned market in the fourth quarter, but different than the last two years when it accelerated market conditions,” Donath shares. “The difference is that in those two years, the market had significant tailwinds. This year, the market is facing headwinds – primarily, the economic outlook.

“Despite these headwinds, buyers will want to take advantage of bonus depreciation in 2022, before the incentive recedes to 80% on January 1, 2023.”

Foster also expects a significant surge of activity in the final quarter, as buyers race to take advantage of 100% depreciation before year-end. But if buyers miss the deadline for 100% depreciation, “the dilution of available

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Buying&Selling 1.qxp_Finance 19/07/2022 11:38 Page 4

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depreciation still remains up to 80% in Year One, which is almost four times the traditional method,” he concludes.

“That’s still very attractive.”

For those still hopeful of taking advantage of 100% Bonus Depreciation, however, Iannarelli highlights a practical first step that will remove unnecessary stress and wasted-time which could cost buyers, ultimately.

“In order to ensure that you are able to secure an airplane and conclude the transaction prior to year-end, make sure you have your team in place well in advance of moving forward on an LOI,” she stresses. “Scrambling to ‘fill in the blanks’ while in the midst of negotiating a deal is not looked upon favorably by the seller, nor does it help you achieve your goal.” ❚ More information from: Donath Aircraft Services: www.donathaircraft.com OGARAJETS: www.ogarajets.com Par Avion Ltd: www.paravionltd.com

DAVE HIGDON

“Capitalizing on the available 100% depreciation requires buyers to take delivery of their aircraft, and conduct one business flight, before the clock strikes midnight on New Year’s Eve...”

is a highly respected aviation journalist who has covered all aspects of civil aviation over the past 40 years. Based in Wichita, he has several thousand flight hours, and has piloted pretty much everything from foot-launched wings to combat jets.

Contact him via Dave@avbuyer.com

www.AVBUYER.com

MAKE MORE INFORMED BUYING & SELLING DECISIONS with AvBUYER.com

AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

29

Contents JULY22.qxp 26/07/2022 10:29 Page 1

O'Gara August.qxp_Layout 1 19/07/2022 10:36 Page 1

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Ownership 1.qxp_Finance 19/07/2022 07:43 Page 1

OWNERSHIP

The Three Leading Reasons to Fly Privately With the stark differences between flying with the airlines and flying privately growing ever clearer, René Armas Maes considers the three leading reasons why passengers who value their time and wellbeing should consider using a private jet…

W

hen the Covid pandemic drove many traditional airline users to find safer means of travel, to help ensure work and life generally continued as close to normal as possible, several turned to Business Aviation.

Many got more than they bargained for: Far from paying through the nose for an expensive luxury that, under normal circumstances, would be cost-prohibitive, those first-time users discovered a highly efficient travel option and became repeat users, and – subsequently – even first-time owners of business aircraft.

But what exactly are the benefits to flying privately that they discovered? Following, we’ll explore the three leading factors that are consistently ranked as the top reasons for using private jets…

32 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

1. Time Savings

Assuming there is no runway congestion, the average wait time between arriving at the FBO, boarding the aircraft, and take-off is 10 minutes. The same is true of landing and deplaning at the destination. This is simply incomparable to the airline terminals where security procedures and passport checking can amount to several hours at each end of the flight.

Time-savings are realized in more ways than one, though. For example, the cabin of an airline is not a productive work environment. Cabin crew interruptions, limited room, sharing the cabin with hundreds of others, and limited control over the cabin environment all erode a passenger’s ability to focus and be productive. www.AVBUYER.com

Ownership 1.qxp_Finance 19/07/2022 07:43 Page 2

AVBUYER.com

By comparison, passengers generally know those they travel with, have much greater control over their cabin environment – including lighting, temperature, and personal space when they fly privately.

They can also be assured optimal security when connecting to the airplane’s Wi-Fi and, depending on the connectivity installed on the jet, may have all of the functionality at their fingertips as they would expect in the office, ensuring time in the air isn’t wasted time.

In fact, a team of executives and middle managers can expect almost double the onboard productivity on a business jet compared to flying on a scheduled airline. To mathematically demonstrate Business Aviation’s time efficiency, a number of assumptions must first be made… www.AVBUYER.com

•

•

•

First, assume the number of people on board and the type of flying (for simplicity, let’s here assume a non-stop flight to a destination also served by a commercial airline).

Next, how productive/unproductive are those employees likely to be while flying? (As an example, aboard an airline service the team is able to work for just 30 minutes per flight hour due to interruptions and discomfort, whereas using Business Aviation the team is able to work the full 60 minutes per flight hour, less 10 minutes for taxi-in/out, and productive time adjustment during take-off and landing for the first and last hour of the flight).

Proceed to make an assumption of the flight time. In this example, let’s assume a five-hour flight.

AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

33

Ownership 1.qxp_Finance 19/07/2022 07:44 Page 3

OWNERSHIP

AVBUYER.com

TABLE A: Private Aviation vs. Airliner Onboard Productivity Comparison 01-23,(4$*&( "! +! %!

-! #!

5-67.( #$! ""$! "*$! +%$! +,$!

7-&1-"8( %$! &$! ,$! "+$! "#$!

9$,%1(9-:8( &$! "+$! "'$! +-$! %$$!

!"#$%&'()&$'*+,-.-,/( 5-67.( 7-&1-"8&( '%(! #$(! ,+(! #$(! ,-(! #$(! ,&(! #$(! ,*(! #$(!

;)<( ")&*! ")'%! ")',! "),+! "),%!

Source: Consultant analysis

•

Using these assumptions, Table A (above) shows an onboard productivity multiple of 1.9x in favor of Business Aviation over an airline service, reached from the fourth flight hour onward.

This finding of the example depicted in Table A will further favor Business Aviation if a connecting hub needs to be used (if, for example, the final destination is not served by a non-stop airline service) By analyzing the travel history of key executives, I have found that owing to the complexity of multipleday/multiple-location trips, the airline option often is not practical from a productivity, time savings, or cost perspective.

Likewise, when considering time savings and assessing the bottom-line contribution of Business Aviation, I’ve seen cases where a corporation was able to pay for their aircraft for an entire year because they were able to respond quickly to secure a top client or seal a deal with efficiency and timeliness that would simply not be possible on an airliner’s schedule.

34 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

2. Flexibility

In the US, private aircraft have access to over 5,000 airports (depending on the size and weight of the aircraft flown). By comparison, the airlines serve just 10% of that number.

Enhanced airport accessibility means Business Aviation can connect passengers with more destinations non-stop, while airports closer to their ultimate destinations are options, helping shorten trip-time and adding operational flexibility.

Aircraft that are capable of taking-off and landing on short runways open up even more remote and small community airports. In fact, more than 75% of Business Aviation flights fly to and from small communities that are not served by the airlines, according to the National Business Aviation Association.

Moreover, any change of plan en-route is likely to be accommodated when flying privately, and trips can be arranged at short notice while last-minute flight changes can be executed. Finally, unlike airlines, private aircraft wait for their passengers when they’re delayed, all of www.AVBUYER.com

Contents JULY22.qxp 26/07/2022 10:25 Page 1

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Ownership 1.qxp_Finance 19/07/2022 07:44 Page 4

OWNERSHIP

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“...unlike airlines, private aircraft wait for their passengers when they’re delayed.” which equates to a highly efficient, flexible form of transportation.

3. Privacy and Comfort

Confidentiality is also key for many private aviation users, whether they’re high net worth individuals, athletes, musicians, or corporations. In the case of a corporation, many organizations prefer to keep future strategic moves and partnership conversation under the radar as they proceed to evaluate cost synergies and work on the due diligence process.

Operating a private aircraft means executives can fly ‘private’ to any location, especially when discretion is key.

Indeed, operators can sometimes – under special authorizations – use a ‘call sign’ instead of the aircraft’s tail number, making it more difficult for competitors and media outlets to track their movement and estimated arrival time via real-time flight tracking platforms.

Traveling on a private jet helps those who need to preserve confidentiality around onboard negotiations and deal discussions. Business deals can be discussed without the fear of being overheard. And business jets tend to offer seating configurations which facilitate such discussions as though they were taking place in the office.

Conclusion

While there are reports that the airlines may start cutting capacity after the summer (generally between 5% to 15%), and while they continue to reshuffle their schedules to optimize passenger loads, users of their services can expect an increased focus on the inflexible hub-and-spoke system.

Although flight cancellations and delays seem to be a new normal as the airlines deal with a labor shortage, flying privately ensures users of private jets retain control of their time and privacy. What’s not to like about that? ❚

RENÉ ARMAS MAES

is vice president, Commercial at Jet Link International LLC and an international consultant with a broad experience in business aircraft sales. He has developed multiple analyses and studies for a number of US Fortune 500 companies and Venture Capital firms, and participated as keynote speaker at a number of business aircraft conferences. https://www.linkedin.com/in/ren%C3%A9-armas-maes-4935b842/

36 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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Even Plumbers Can Fly by Private Jet Find out how Charlie Mullins – a man who built a plumbing empire on simple, honest principles – realized the benefits of private jets, becoming a repeat charter user. Fabrizio Poli caught up with him in a recent interview…

C

harlie Mullins wasn’t born into money. He’s the son of a factory worker father and his mother worked as a cleaner. When he was born, they rented a couple of rooms in Camden, UK, before moving to the Rockingham Estate in London's Elephant and Castle.

At the tender age of ten, Charlie used to miss a few days of school to help Bill, his local plumber. As it turned out, Charlie was a natural in the trade, and, having developed a talent for plumbing he left school aged 15 and gained City and Guilds qualifications to become an apprentice plumber.

Before long, Charlie had set-up shop as a sole trader in the Pimlico area of London, building a plumbing empire in London called Pimlico Plumbers, which, after forty years in business, he recently sold for over £145m ($170m) to American home services provider, Neighborly.

The secrets to Charlie’s success in building Pimlico

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Plumbers is a combination of common sense and out-of-the-box thinking – he makes it clear that obsessive focus on customers has been key, as has a determination to create a service that’s professional and counter to the negative experiences many have of tradesman.

Among his common sense ‘secrets’, “We don’t turn up late. We wear smart clothes and are transparent with our prices,” he elaborates. “These aren’t things people normally associate with plumbers.”

On his out-of-the-box approach, Charlie spent £1m (USD$1.2m) on his 80 number plates which spell out plumbing-related themes, including 'Drains', 'Sinks', 'Shower', 'Gas' and 'Loo 2 Rod'. But he says they are an investment in the business as he uses them on his vans. According to Charlie, they got noticed and have brought Pimlico Plumbers a lot of business as a result. www.AVBUYER.com

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CHARLIE MULLINS SPEAKING TO KATHERINE RYAN, HOST OF UK TV SHOW 'HOW'D YOU GET SO RICH'

Introduced to Business Aviation

Charlie starting using private jets a few years ago when he began investing in property in Marbella, Spain. He’d been negotiating a deal on a villa, and someone else was closing in fast on the deal.

Needing to get from London to Spain to close the transaction before the other party did, the only solution, he recalls, was to fly private. That’s how Charlie discovered the power of private jet travel.

Ever since, he has shuttled between London and Malaga on various chartered aircraft, often carrying guests.

Charlie first started chartering small Hawkers and Citation jets, but has recently graduated to larger cabin aircraft, finding the extra space to be more comfortable, and certainly worth the extra money.

According to him, the lockdowns have changed people’s mindset towards air travel. “The hassle in airports, long lines at check-in, delays, last minute www.AVBUYER.com

flight cancellations, diversions and lost baggage are all things people with the money can avoid by traveling by private jet,” he says.

“Flying private, you control the schedule and you’re guaranteed to get to your destination.”

From Plumbing to the Music Industry

Since selling Pimlico Plumbers, Charlie has moved into the music business, where he has already spotted the talents of singer RaRa Lea. Charlie and Rachel (RaRa’s real name) are spending a lot of time in Nashville getting her new album ready, and preparing a US tour for later this year.

In fact, Charlie plans on spending quite a bit of time in the US, shuttling back to the UK and Spain, and is currently either looking to buy some time on a jet or acquire his own, so that he can spring into action at a moment’s notice.

Asked in a recent Biz Jet TV interview what advice AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

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“Flying private, you control the schedule and you’re guaranteed to get to your destination.”

CHARLIE HAS MOVED INTO THE MUSIC BUSINESS HAVING SPOTTED THE MUSICAL TALENTS OF RARA LEA

he would give to a young person who loves the idea of having their own business and flying private, Charlie admitted that he is not a great fan of universities, believing people have to be more hands-on and get out there.

“Common sense, enthusiasm and different ideas,” he shares. “You need to have a unique approach to what you do, have the guts to do things differently, while solving a problem.

“You always need to be in front of the queue,” he adds. “Make decisions quickly, and don’t be afraid to make mistakes. As long as you are more right than wrong, you will win.

“In today’s world, so many people are not very

FABRIZIO POLI

good at making decisions. Many people these days complicate business. You need to make it simple.”

In his business, Charlie says they would turn up on time, do the job, clean up afterwards, all while providing a quality service. “People will always pay for quality, and this leads back to private jets. Private jet travel does cost money, but the quality is far higher than airline travel.”

So, if a plumber from London can build a multimillion-dollar business repairing people’s sinks and end up jetting around the world privately, how about you?

More information from www.bizjettv.com. ❚

is Senior Consultant at Orville Aviation. He is also an Airline Transport Pilot. Mr. Poli has over 35 years experience in the aerospace sector, both as an aviator and in business. Fabrizio is also founder of popular YouTube channel, Biz Jet TV. Visit Biz Jet TV at www.youtube.com/channel/UCavizueJievdH4TwxiSlX3g

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Private Jets: What’s the Most Important Feature?

What would you say sways the balance when it comes to choosing a private jet?

Do range, speed, cabin, or operating costs matter more? René Armas Maes provides a model for buyers to select the best jet for the mission, based on all the best features…

W

hen utilizing business jets, passengers tend to rank aircraft features and attributes differently. This means that the manufacturers need to consider regional perceptions and differences in the aircraft they build.

As an example, cabin size is a key feature for many Business Aviation users in the Middle East and Russia, while in Latin America cabin size doesn’t feature in the top three features, whereas cost does.

Generally speaking, though, several surveys on the subject agree that worldwide, aircraft range, speed, cabin features and amenities are considered to be important, as is operating costs, and more. We’ll review several key features of business jets to help buyers establish which is the most important to them…

Range

Existing aircraft owners and first-time buyers alike will often consider range to be a leading feature in the aircraft they operate/plan to buy. Although an aircraft’s 42 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

range is often at the front of a buyer’s mind when they’re benchmarking possible jets for their mission need, while it’s important, range cannot be considered as a separate metric in the decision-making process.

Range should be considered alongside a number of other metrics when buyers are comparing multiple business aircraft. For example, an Ultra-Long-Range jet, such as a Bombardier Global 6000, can fly 6,000 nautical miles but its Direct Operating Cost (DOC) is 1.9 times higher than a Super Mid-size jet capable of flying 4,000 nautical miles.

The question buyers should ask is whether they really need to buy a 6,000nm-range jet if less than 20% of their travel requirements demand such range.

Where a shorter range aircraft is adequate for 80% of the mission need, it’s more likely to make better financial sense to build a fuel stop into the 20% of trips requiring greater range, use ad-hoc charter services, or buy a block of charter hours with a jet card to achieve those longer range missions. www.AVBUYER.com

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Speed

We all want to get to our destination as quickly as possible, ensuring our waking hours are spent as productively as possible. Unsurprisingly, speed has always been a key feature and is often upheld as a differentiator when manufacturers pitch their products to potential aircraft buyers. Indeed, speed ranks in the three most-important features to existing and would-be business aircraft users.

The Cessna Citation X was famously known as the world’s fastest civil aircraft when it was first produced (before the introduction of the Gulfstream G650ER). It was capable of reaching Mach 0.92, and offered a range of over 3,000nm at normal cruising speeds, with four passengers aboard.

Through its early marketing, Cessna focused on the Citation X’s ability to travel one mile every six seconds, and its ability to cut 30 minutes off a US East coast to West coast flight. However, the Citation X consumed 350 gallons of fuel per hour, and its direct operating www.AVBUYER.com

cost exceed $5,000/hour, whereas other business jets offering 3,000-4,000nm range average $3,900 per hour.

So in this case, speed came at a cost that buyers needed to justify through other capabilities offered by the jet that made it the ideal fit for the mission.

Essentially, similar to range, while some operators may be able to justify the purchase of the quickest jets, speed cannot be considered as the only feature in a buying decision, especially at times when fuel prices are skyrocketing. Instead, it should be analyzed as a part of the wider package.

Cabin Size, Amenities & Technology

A plush interior offering enough headroom to stand up, and width to stretch and move around comfortably aboard the aircraft, are valued by most private jet customers – especially those shopping the Super Midsize through Ultra-Long-Range Jet markets. Once again, though, the larger the cabin the higher the DOC and acquisition costs (generally speaking).

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Key amenities may include a fully-enclosed lavatory, a full galley, crew rest area, and in-flight access to the baggage compartment, while cabin technology and connectivity capable of replicating the comforts of the home or the productivity of the office are key customer demands too.

Humidity, cabin temperature control, cabin altitude and noise cancellation are all important areas of focus within the industry, as are highly sophisticated cabin lighting systems that even adjust to the passengers’ biological rhythms on the newest, longest-range jets, reducing the impact of jetlag.

While passenger comfort, wellbeing, and their arrival at the destination rested and refreshed are top priorities for business jet owners, placing cabin size, amenities and technology high on their list of priorities, the additional cost may be less justifiable when the average stage-length of a flight lasts less than 2.5 hours on most of the projected trips.

Thus, the aircraft’s cabin must also be assessed in the context of the usual mission requirement.

Direct Operating Costs (DOCs)

Even though Direct Operating Costs are not the only metric you should consider when evaluating business jets from a financial point of view – financing, down payment requirements, interest rates and residual values need to be considered, too – they do need to be further scrutinized.

FIGURE 1: Selected Very Light & Light Jet Cost & Range Benchmark

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44 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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“...buyers who do the appropriate groundwork will soon establish the factors that tip the balance in favor of one jet over another.”

As an example, when benchmarking selected Very Light Jets and Light Jet models, fuel costs represented 46% of the total DOC. Other costs include maintenance costs (including parts and labor), engine reserves, auxiliary power unit costs (if applicable), and other miscellaneous expenses, such as crew expenses, catering, cabin supplies, landing and parking fees.

Figure 1 benchmarks seven twin-engine business jets in the Very Light and Light Jet segments, focusing on DOC per seat mile, with an assumed fuel cost per gallon of US$7.5. The results are interesting if one considers missions up to 2,000nm as the Phenom 300E is the least expensive to operate from the study.

However, if the typical mission requirement was up to 1,550nm, then the Cessna Citation M2 Gen2 offers better economics.

What’s the Most Important Feature?

Non-stop routing, the opportunity to shrink door-to-

door travel time, and a positive impact on productivity during travel are key features demanded by today’s Business Aviation users. In fact, speed and range rank among the most-valued features by buyers evaluating their next acquisition.

However, savvy buyers should focus on multiple metrics, discerning the ‘must have’ features from the ‘nice to haves’, all the while dissecting the numbers based on a sound analysis of their travel history (average stage length, typical loads, most common destinations, and special airport performance requirements, etc.).

Placed in the context of capital expenditure requirements, annual operating budget, and financial return mandate, buyers who do the appropriate groundwork will soon establish the factors that tip the balance in favor of one jet over another, and enjoy many years of flying with the perfect model for their flight needs. ❚

RENÉ ARMAS MAES

is vice president, Commercial at Jet Link International LLC and an international consultant with a broad experience in business aircraft sales. He has developed multiple analyses and studies for a number of US Fortune 500 companies and Venture Capital firms, and participated as keynote speaker at a number of business aircraft conferences. https://www.linkedin.com/in/ren%C3%A9-armas-maes-4935b842/

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Jet HQ inventory FP July.qxp_Layout 1 23/06/2022 09:14 Page 1

Your Headquarters for Global Aircraft Sales

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Ownership 4.qxp_Finance 19/07/2022 08:27 Page 1

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Planning Supplemental Lift into Your Operation When does it make sense to arrange supplemental lift for your flight department, and what options are available? David Wyndham considers the benefits and restrictions of ad hoc charter, jet cards and fractional ownership…

I

f you have a full-time aviation department, don’t assume that all your air travel needs will always be met by whole aircraft ownership. Owners finding they need a little more lift, or who find there’s a competing demand on their jet, may not immediately have the justification to buy a second airplane.

In such circumstances, supplemental lift in the form of ad hoc charter, jet cards, or a fractional share may be the solutuon. Within this article, we’ll define the options.

Charter

On demand, or ad hoc charter is a flexible way to acquire additional lift. Many flight departments use charter infrequently on an ‘as-needed’ basis. For those with occasional supplemental lift needs, charter offers the following general features: • No commitment other than for the booked travel.

• Flexibility in selecting among vendors and aircraft types.

• Until booking, availability is not guaranteed.

• With charter, you pay for every hour the aircraft flies on your behalf, whether your passengers are on board or not.

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Jet Cards

Jet cards, or membership programs, are a form of charter. While program specifics vary from provider to provider, these tend to suit users who know they have at least 20 hours of supplemental lift need during the coming year. A typical Jet Card plan has the following features: • A block of flight hours is purchased for a set price.

The hours can be as low as 10 hours, but more typical is a 25-hour card.

• The type of aircraft is specified (e.g. Light Jet), along with a specific service provider or category of provider.

• There is a single point of contact for scheduling.

• The price guarantee and length of contract has a time limit of typically one year. Beyond the year, unused funds can still be used, but the price guarantee is no longer in effect.

• Availability is guaranteed with restrictions. The lead time required varies with the card program, and it may have peak travel days (such as Thanksgiving and Christmas holidays) requiring booking well in advance. www.AVBUYER.com

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•

•

Membership Programs may have different billing practices, such as a monthly membership fee plus an hourly fee. Some may have hourly fuel cost adjustments.

The primary service area may be limited (e.g. within the United States), meaning that flights outside this area will incur additional costs and fees.

Fractional Ownership

This is a form of ownership, much like a time-share. Each fractional owner purchases an interest in a specific, serial-numbered aircraft based on 800 occupied hours per year for each whole aircraft. Each owner is guaranteed 50 occupied hours annually for each 1/16 share that is purchased.

Contract lengths vary with five years being common. A typical fractional ownership program has these features: • The make and model of aircraft is specified.

• There is a single point of contact for scheduling.

• Owners are charged only for the hours they actually occupy the aircraft.

• Availability is guaranteed with restrictions. Peak travel days still require advance booking. www.AVBUYER.com

• • •

The ability to swap hours to larger or smaller aircraft for a set interchange ratio of hourly costs is available, giving fractional owners more flexibility.

The primary service area may be limited (i.e. within the United States), meaning that flights outside this area will incur additional costs and fees.

Leases are available.

Supplemental Lift for Shorter-Term Needs

Many aviation departments will use supplemental lift on an infrequent basis for the rare occasions their whollyowned aircraft is unavailable. Most commonly this occurs when the company aircraft is grounded for major maintenance and is unavailable for several weeks or even months.

A common example would be if the aircraft is undergoing a major airframe inspection. Simultaneously, the owner may plan to have an interior upgrade and an aircraft repaint. Most of the paint and interior work cannot be done while the aircraft is being actively worked on, meaning that in this case, the owner could be without their primary aircraft for a few months.

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between selling your current aircraft and awaiting delivery of a new aircraft. Unless the owner is trading-in their existing aircraft to the aircraft manufacturer, these two events may not be simultaneous. Supplemental lift can fill in the gap.

This has two advantages: • One is the ability to negotiate and close the sale of the current aircraft without the condition of needing delivery of the new aircraft, which allows you more freedom to get the best price on your current aircraft.

• Another is that if the new aircraft requires initial training of the crew and maintenance staff, supplemental lift allows for the aviation operation to continue at its current levels while crews are away at training schools.

Having considered the options in this month’s article, next time, we will look at five scenarios where supplemental lift is provided for the longer-term needs of aircraft operators… Stay tuned! ❚

DAVID WYNDHAM

is the Founder of David Wyndham + Associates, LLC. He is a highly respected industry veteran having built up more than 36 years of aviation experience, including as president and co-founder of Conklin & de Decker. He is also Vice President, Asset Insight Consulting Services. https://www.linkedin.com/in/davidwyndham/

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“On demand, or ad hoc charter is a flexible way to acquire additional lift...”

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FINANCE

Buying a Jet? Top Industry AssetBased Loan Tips Asset-based loans have been a prominent feature of the business jet market in recent years, with owners benefiting from low interest rates. What tips do the experts offer for operators considering this finance option? Gerrard Cowan finds out…

A

sset-based loans essentially refer to finance that is backed by a particular asset, such as a business jet. They generally do not require a financial statement disclosure, while there is limited, or no, need for a personal or corporate guarantor, according to Keith Hayes, Senior Vice President and National Sales Manager for PNC Aviation Finance.

Instead, the terms of the loan depend on the amount of equity or down payment the buyer puts into the transaction. There are also benefits around the speed of closing the loan, Hayes adds.

There are several alternatives. For example, borrowers could opt for a traditional credit-based loan, though this requires a full financial disclosure and a thorough underwriting process, and can take up to twice as long as an asset-based financing structure, notes Hayes. Another option is an operating lease structure, which offers flexibility in relation to tax

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benefits and off-balance sheet accounting treatment.

However, asset-based loans have proved popular, and while PNC Aviation Finance offers a range of finance types, including credit-based loans and leasing options, the asset-based loans structure makes up over half its portfolio.

Asset-Based Loans: What’s the Attraction?

Asset-based loans have been more popular than leasing in recent years because of the low interest rate environment, says Brian Foley, one of aviation’s leading analysts. This has made loans more attractive, though he notes “leasing may now start gaining popularity as we enter a higher interest rate environment”.

There are several benefits to the asset-based loans structure for business jet operators, according to Foley. In the US, owners are permitted to make tax www.AVBUYER.com

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reductions for depreciation and interest, he notes.

Additionally, they’re entitled to an increase in the value of the aircraft, if any, while they build equity in the aircraft as their payments are made.

Moreover, by securing their business aircraft through the loan, “the borrower can deploy their own capital to higher Return on Investment (ROI) projects than aircraft ownership”.

Still, there are drawbacks to keep in mind, Foley adds. The usefulness of the approach will lessen if the owner is unable to use tax reductions. On top of that, “the lender may set rules, restrictions and requirements relating to the operation of the aircraft”.

Who Qualifies for Asset-Based Loans?

Adam Meredith, president of AOPA Finance, says his company’s experience is that borrowers with very complicated financials – such as those that own multiple business entities – are ideal candidates for www.AVBUYER.com

asset-backed loans, as there is much less back-andforth analysis required.

“With asset-based loans, the underwriters focus on the aircraft and ‘character’ of the borrower, rather than their financial strength,” Meredith explains. “The theory is that if there’s equity in the aircraft (the loan balance is sufficiently less than the aircraft value) and the borrower is of solid character, then in the event of a default you can always sell the plane to cover the loan.”

There could be potential difficulties depending on the aircraft in question, Meredith adds, particularly if it “is difficult to properly assess value and/or predict residual values”.

This stands in contrast to credit or cash flow-based loans, “whereby underwriters are looking at estimated cash flows and liquidity to determine how much the borrower is able to afford”.

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“With asset-based loans, the underwriters focus on the aircraft and ‘character’ of the borrower...”

as well as the usage, Meredith continues. For example, if an operator intends to extensively charter their aircraft (e.g. for more than 50 hours per year), or if the plane is more than 20 years old, asset-based offerings are not typically available, he says.

“Certain other aircraft that are frequently used in commercial operations, have limited sales, or are new to market are also frequently excluded,” Meredith adds.

Meredith notes that banks must analyse the collateral, with borrowers needing to complete an application to allow the lender to study their credit, and personal history. “These loan underwriters will heavily scrutinise your past to ensure you’ve made payments in a timely manner and have a solid record of handling your affairs.”

What Size Down Payment is Required?

In the case of an asset-based loan, the industry standard is for a borrower to put down a minimum of 54 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

20% as a down payment, says Hayes, adding that some level of personal or corporate guaranty may be required, depending on the level of the down payment.

“If the borrower is willing to put 40% in equity or greater, there could be no guaranty required at all,” he explains. “However, in all cases, a thorough background or ‘know your customer’ review will take place. This provides the financing party with the opportunity to confirm the borrower’s background before moving forward with an asset-based solution.”

Asset-based loans continue to be popular because they enable flexibility in the finance process, Hayes suggests. Since the beginning of the Covid-19 pandemic, interest in private air travel has boomed, leading to an increase in virtually every aspect of PNC Aviation Finance’s business, and the industry as a whole, including record numbers of first-time aircraft buyers.

“Due to the nature of asset-based loans, this www.AVBUYER.com

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Finance.qxp_Finance 18/07/2022 16:08 Page 4

FINANCE

AVBUYER.com

financing structure really opens the door for more buyers and allows them to move quickly, which is incredibly important in today’s market,” Hayes suggests. He doesn’t see many drawbacks to the asset-based product, though he does note that “the interest rate for the loan will be somewhat higher to cover the additional financial risk being taken on by the bank”.

It’s also important that borrowers are aware that if they wish to borrow more than 80%, the asset-based loan structure will not be available. Nevertheless, the approach offers speed, simplicity and privacy, he says.

When Time is of the Essence…

“Since an asset-backed loan does not require personal or corporate financial information to be disclosed,

GERRARD COWAN is a freelance journalist who focuses on aerospace and finance. In addition to his regular features in AvBuyer, Gerrard's work has appeared in the Wall Street Journal and Janes, among others. Gerrard can be found on Twitter: @GerrardCowan

56 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

some high-net-worth individuals or privately held companies find it to be an appealing option,” Hayes says. “With inventory at an all-time low, time is of the essence when acquiring an aircraft.

“This is why it’s critical to not only choose your financial partner carefully, but also your other thirdparty advisors (such as attorneys, brokers, etc.). Having trusted advisors that specialize in business aircraft and have a vast knowledge of potential pitfalls will aid in successfully navigating this process,” he advises.

If a business jet operator has the available resources, they should use cash to secure ownership of the aircraft, and then opt for financing later, Foley suggests. “Aircraft sellers in this tight market don’t want to wait and see whether the buyer’s lender approves the loan.” ❚

MAKE MORE INFORMED AIRCRAFT FINANCE DECISIONS with AvBUYER.com

www.AVBUYER.com

C&L Aviation March.qxp_Layout 1 20/07/2022 10:14 Page 1

Values Intro.qxp_Finance 19/07/2022 11:47 Page 1

VALUES - VERY LIGHT & LIGHT JETS

AVBUYER.com

Business Aircraft Values: Very Light & Light Jets Where performance and value are dominant factors for a mission need, remember this: there’s nothing lightweight about the value and flexibility of the Very Light & Light Jets.

A

s business jets increase in size from Very Light & Light jets to the low end of the Large Cabin models, six to eight seats generally remains the standard configuration across size-category lines. And while cabins increase in volume generally (enabling more productive workspace for those traveling longer distances), full-fuel payload doesn’t seem to grow proportionally in most cases.

As jets get bigger and heavier their runway needs increase, with no appreciable gain in how many people or equipment can fly – and thus we touch upon the key advantages of the Very Light & Light jet category - the value and flexibility offered to those who typically fly shorter legs.

Fully-fuelled, an Very Light or Light jet can often barely carry the typical passenger load of three persons, unless one or two of them doubles as a crew member. Nevertheless, with the average mission length below 750 miles and the nominal maximum-range of Light jets around 1,200 miles, the crew enjoys the option of flying lighter and saving fuel. Fueling for the mission with NBAA reserves allows larger cabin loads, making three or four - plus crew - possible.

The time difference between Very Light & Light jets and Large jets to fly a typical 750nm mission is small (about 10 to 12 minutes, overall) and is not a large time-saving for costs that may be considerably higher for the larger aircraft. Further, beyond these speed-range-payload operational 58 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

basics, the Light jet crew will have the option of far more airports, often closer, more convenient and less expensive than what’s needed for the Medium and Large jets. Thus, it’s hard to escape the heavyweight value of the Very Light & Light jet.

So what exactly is a Light jet? Today we consider a jet “light” when its MTOW falls between 10,000 and 20,000 pounds. About a decade ago the Light segment represented the bottom rung of the business jet ladder. That was before the Very Light Jets entered the market, differentiated by weights below almost everything ever built at less than 10,000 pounds.

Very Light & Light Jet Price Guide

The following Very Light & Light Jets Retail Price Guide represents current average values published in The Aircraft Bluebook – Price Digest. The study spans a twenty year period, from 2003 through Summer 2022, and covers 31 models. Values reported are in US$m, with each reporting point representing the current average retail value published in the Bluebook by its corresponding calendar year. For example, the Embraer Phenom 300 average value reported in the Summer 2022 edition of Bluebook shows $7.95 million for a 2016 model, $7.65 million for a 2015 model and so forth.

Note: We have included 31 aircraft models in the following Very Light & Light Jets average price guide. www.AVBUYER.com

Action Aviation August.qxp_Layout 1 20/07/2022 11:15 Page 1

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Retail Values.qxp_RPG 19/07/2022 08:34 Page 1

VALUES - VERY LIGHT & LIGHT JETS

Very Light & Light Jets: Average Retail Price Guide 2022 US$M

2021 US$M

11.29

10.5

2020 US$M

2019 US$M

2018 US$M

2017 US$M

2016 US$M

2015 US$M

2014 US$M

9.5

9.0

8.8

8.4

8.0

7.7

7.4

8.05

7.8

7.2

6.8

6.6

6.4

6.2

CESSNA CITATION CJ3

5.75

5.55

5.35

CESSNA CITATION CJ2+

4.9

4.7

4.5

MODEL YEAR $

2013 US$M

MODEL BEECHCRAFT PREMIER IA BEECHCRAFT PREMIER I BOMBARDIER LEARJET 31A CESSNA CITATION ENCORE+ CESSNA CITATION V ENCORE CESSNA CITATION BRAVO CESSNA CITATION CJ4 GEN2 CESSNA CITATION CJ4 CESSNA CITATION CJ3+

9.915

9.25

7.1

CESSNA CITATION CJ2 CESSNA CITATION CJ1+ CESSNA CITATION CJ1 CESSNA CITATION M2

5.855

5.2

4.9

4.6

4.4

CESSNA CITATION MUSTANG CIRRUS VISIONJET SF50

3.2

3.0

2.8

2.6

2.3

4.2

4.0

3.8

3.6

3.4

3.1

2.9

2.7

2.5

2.4

1.4

1.3

2.0

ECLIPSE 550 ECLIPSE 500

1.2

EMBRAER PHENOM 300E

10.295

10.75

EMBRAER PHENOM 300 EMBRAER PHENOM 100EV

4.495

4.4

10.45

9.95

9.45

9.75

9.45

8.95

8.45

4.35

4.25

4.15

4.05

EMBRAER PHENOM 100E

3.85

7.95

7.65

7.35

3.65

3.45

3.25

EMBRAER PHENOM 100

7.05

2.75

HAWKER 400XP HAWKER BEECHJET 400A HONDAJET HA-420 ELITE S

5.75

HONDAJET HA420 ELITE

5.5 5.4

5.1

4.4

HONDAJET HA-420

3.9

NEXTANT 400XT/XTi

3.5

3.2 3.1

PILATUS PC-24

11.887

11.5

11.0

10.5

2.9

2.5

2.0

10.25

AIRCRAFT BLUEBOOK DATA - CHRIS REYNOLDS, EDITOR. EMAIL: CHRIS.REYNOLDS@INFORMA.COM

60 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

www.AVBUYER.com

Retail Values.qxp_RPG 19/07/2022 08:36 Page 2

AVBUYER.com

What your money buys today

Summer 2022 2012 US$M

2.6

2011 US$M

2010 US$M

2009 US$M

2008 US$M

2.5

2.4

2.3

2.2

2007 US$M

2.1

2006 US$M

2005 US$M

4.3

2003 US$M

1.9

MODEL YEAR $ MODEL BEECHCRAFT PREMIER IA

1.7

4.6

2004 US$M

1.65

1.6

BEECHCRAFT PREMIER I

1.15

BOMBARDIER LEARJET 31A

4.0

CESSNA CITATION ENCORE+ 3.7

3.5

3.3

3.1

CESSNA CITATION V ENCORE

2.3

2.2

2.1

2.0

CESSNA CITATION BRAVO CESSNA CITATION CJ4 GEN2

6.8

6.6

6.4

CESSNA CITATION CJ4 CESSNA CITATION CJ3+

5.15

4.95

4.85

4.75

4.65

4.55

4.45

4.35

4.3

4.1

3.9

3.7

3.5

3.3

3.1

3.0

2.9

2.8

2.4

2.3

2.9

2.8

2.7

2.6

2.5

2.2

4.25

CESSNA CITATION CJ3 CESSNA CITATION CJ2+

2.7

2.6

CESSNA CITATION CJ2 CESSNA CITATION CJ1+

2.1

2.0

CESSNA CITATION CJ1 CESSNA CITATION M2

2.3

2.2

2.1

2.0

1.9

1.8

1.7

CESSNA CITATION MUSTANG CIRRUS VISIONJET SF50 ECLIPSE 550

1.1

1.0

-

0.9

0.7

0.5

ECLIPSE 500 EMBRAER PHENOM 300E

6.75

6.55

6.35

6.15

EMBRAER PHENOM 300 EMBRAER PHENOM 100EV EMBRAER PHENOM 100E

2.65

2.55

2.45

2.35

2.25

2.25

2.15

2.05

EMBRAER PHENOM 100 1.95

1.85

1.75

1.65

HAWKER 400XP 1.0

HAWKER BEECHJET 400A HONDAJET HA-420 ELITE S HONDAJET HA-420 ELITE HONDAJET HA-420

1.6

1.4

NEXTANT 400XT/XTi PILATUS PC-24 AIRCRAFT BLUEBOOK DATA - CHRIS REYNOLDS, EDITOR. EMAIL: CHRIS.REYNOLDS@INFORMA.COM

www.AVBUYER.com

AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

61

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Freestream August.qxp 20/07/2022 11:36 Page 1

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AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 11:22 Page 1

HELICOPTER COMPARISON BELL 206B-3 JETRANGER III

MD 500E

Helicopter Comparison:

Bell 206B-3 JetRanger III vs MD 500E Mike Chase provides information on two popular single-engine light turbine helicopters with a view to pinpointing the Bell 206B-3 JetRanger III

O

and MD Helicopters’ MD 500E within the market.

ver the following paragraphs, we’ll analyse the performance of the Bell 206B-3 and the MD 500E to see how they compare within the new and pre-owned helicopter market. We’ll consider a variety of productivity parameters (including payload, range, speed, and cabin size), and discuss current market values.

In this comparison we have chosen two helicopters that have similar Maximum Takeoff Weights (MTOW). The Bell 206B-3 offers an MTOW of 3,200lbs, compared to 3,000lbs for the MD 500E. Interestingly, however, the maximum sling weight for the Bell 206B-3 (1,000lbs) is less than that of the MD 500E (1,500lbs).

So, what are the pros and cons of each, and to whom would each appeal?

Bell 206B-3 JetRanger III

The 206B-3 JetRanger III replaced the 206B JetRanger II in 1977 and was produced until 2009, utilizing an upgraded Rolls-Royce 250-C20J engine. The model also saw the addition of two inches to the tail rotor diameter for yaw control.

As of this writing, there were 1,652 Bell 206B-3 helicopters in operation worldwide. A total of 857 Bell 206B-3 units had been

64 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

retired/stored while, by continent, North America accounted for the largest fleet percentage (55%), followed by South America (12%) and Europe (11%), for a combined total of 79% of the world’s fleet.

The largest single Bell 206B-3 fleet owner is the Gov’t of USA – Naval Air Systems Command (118 aircraft).

MD 500E

The MD 500E has been in production since 1981, and is also commonly known as model 369E. It’s a single turbine-engine light utility helicopter. Models produced after 1991 feature an increased forward canopy window area. All models have a T-tail for greater flight stability.

Worldwide, there were 308 MD 500E helicopters in operation at the time of writing, and a further 118 units had been retired/stored. By continent, North America had the largest fleet percentage (51%), followed by Europe (22%), accounting for a combined total of 73%.

The largest MD 500E single fleet owner is Haverfield International, Inc., which operated eight aircraft at the time of writing. www.AVBUYER.com

AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 11:24 Page 2

www.AVBUYER.com

MD

BELL

206B-3 JetRanger III

500E

vs.

(Produced 1977 - 2009)

(Produced 1981 - Present)

HOW MANY

SEATS

4

$900k

(2009 Model)

4

$850k

(2009 Model)

How Will These Helicopters Compare?

HOW FAR

CAN WE GO? (Tanks & Seats Full)

Bell 206B-3 JetRanger III

365nm

275nm

MD 500E

WHAT’S THE

HOW MUCH

PAYLOAD CAN WE TAKE?

Bell 206B-3 JetRanger III

(Lbs) 1,470 1,519

MD 500E

HOW MANY

HOW MANY

OPERATION?

EACH MONTH?

UNITS IN 308

1,652

NEW/USED SOLD

LONG RANGE CRUISING SPEED? Bell 206B-3 JetRanger III

(Knots) 122 152

MD 500E

WHAT’S THE

COST PER HOUR?

3 (3.6%) 10 (3.5%)

Bell 206B-3 JetRanger III MD 500E

$443 $469

12-Month Average Figure

(% = Global Fleet For Sale) Sources used: JETNET, B&CA , Aircraft BlueBook (summer 2022) and Chase & Associates.

www.AVBUYER.com

AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

65

AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 11:27 Page 3

HELICOPTER COMPARISON

AVBUYER.com

Table A - Payload Comparison

Payload Comparison

Bell 206B-3 JetRanger III MD Helicopter MD500E

3,200

3,000

610

403

MAX Fuel (lb)

MTOW (lb)

1,470

1,519

208

365

504

Avail Payload w/Max Fuel (lb)

Useful Load (lbs)

Source: OEMs, B&CA

Cabin Comparison

Chart A (middle, left), courtesy of UPCAST JETBOOK, offers a cabin cross-section comparison for our comparative models. As depicted, the Bell 206B-3 cabin has less width (4.2ft vs 4.5ft) and less height (4.2ft vs 5ft) than the MD 500E cabin. Not depicted by the cross-section, the cabin length of the Bell 206B-3 is also shorter than that of the MD 500E (7ft vs 9ft).

Nevertheless, the Bell 206B-3 has 16cu.ft of luggage space, which is twice that of the MD 500E (8cu.ft). The typical seating configuration for both helicopters are the same at four seats (including one crew member).

1,312

Chart A - Cabin Comparison MD 500E

Bell 206B-3 JetRanger III

275

Tanks Full Range (nm)

The data in Table A (left) is sourced from each OEM. As we have mentioned previously, a potential operator should focus on payload capability as a key factor. The Bell 206B-3 ‘Available Payload with Maximum Fuel’ (208lbs) is less than that offered by the MD 500E (504lbs).

Range Comparison

Model

Bell 206B-3 JetRanger III MD Helicopters MD 500E

Cabin Height ft.

4.2 5.0

Cabin Cabin Cabin Volume cu.

Width ft. Length ft. ft.

4.2 4.5

7.0 9.0

40 42

Source: UPCAST JETBOOK

Chart B - Range Comparison Bell 206B-3 JetRanger III MD 500E

365 (nm) w/Tanks Full 275 (nm) w/Tanks Full

As depicted by Chart B (bottom, left), using Grand Prairie, Texas as the origin point, the Bell 206B-3 helicopter – with a ‘Tanks Full’ range of 365nm – travels further than the MD 500E (275nm range).

For helicopters ‘Tanks Full’ range represents the maximum IFR range of the aircraft at long range cruise speed with full fuel. Not factored are winds aloft or any other weather-related obstacles.

Powerplants

The Bell 206B-3 has a single RollsRoyce 250-C20J turbine engine that offers 420shp at take-off, and 270shp continuous. By comparison, the MD 500E is powered by a single RollsRoyce 250-C20B turbine engine producing 420shp at take-off, and 350shp continuous.

Helicopter Usage Comparison

Note: For Helicopters “Tanks Full Range” represents the maximum IFR range of the aircraft at Long Range Cruise with tanks full. Does not include winds aloft or any other related obstacles.

Source: Chase & Associates

66 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

Chart C (overleaf) shows the usage of both helicopters broken into market groupings. At the time of writing, the largest defined usage for the Bell 206B3 helicopter was ‘Business’ (36%) followed by Charter (23%). The most popular usage for the MD 500E is ‘Business’ (40%) and Charter (11%).

www.AVBUYER.com

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AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 15:23 Page 4

HELICOPTER COMPARISON

AVBUYER.com

Chart C: Bell 206B-3 vs MD 500E Usage Comparison

19%

14% 8%

15%

BUSINESS

BELL 206B-3 JetRanger III N = 1,652

CHARTER

36%

GOVERNMENT MILITARY

7%

MD 500E N = 360

16%

OTHER

23%

Cost Per Mile Comparison

11%

Source: JETNET

Chart D – Cost Per Mile Comparison

40%

Chart D (middle, left) details the ‘Cost per Mile’ for our comparative helicopters (per JETNET data), factoring the direct costs (no depreciation), and with each aircraft flying a 200nm mission. The average US Jet A fuel cost used for July 2022 was $7.14 per gallon.

The Bell 206B-3 shows a higher cost per nautical mile at $5.33, than the MD 500E ($4.60); a difference of 15.9%.

Total Variable Cost

The ‘Total Variable Cost’ illustrated in Chart E (bottom, left) is defined as the Cost of Fuel Expense, Maintenance Labor Expense, Scheduled Parts Expense and Miscellaneous Trip Expense.

These costs DO NOT represent a direct source into every flight department and their trip support expenses. For comparative purposes, the costs presented are the relative differences, not the actual differences since these may vary from one flight department to another.

Sourced from JETNET, the Total Variable Cost for the Bell 206B-3 is $443 per hour, which is $26 or 5.5% less per hour than the MD 500E ($469).

Market Comparison

Chart E – Variable Cost Comparison Bell 206B-3 JetRanger III

$443

MD Helicopters MD 500E

$469 $0

Source: JETNET

68 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

$200

$400

US $ per hour

$600

Table B (overleaf) contains the preowned price for each helicopter (2009 models), as sourced from Aircraft Bluebook Pricing Guide (Summer 2022).

The average speed, cabin volume and maximum payload values are sourced from the OEMs and B&CA, while the number of helicopters in-operation and percentage ‘For Sale’ are as reported by JETNET. The Bell 206B-3 had 3.5% of its fleet ‘For Sale’ at the time of writing, compared to 3.6% for the MD 500E. The average number of new and pre-owned transactions per month for the Bell 206B3 averaged 10 units per month over the preceding 12 months, compared to three for the MD 500E.

Asking Prices & Quantity

The used helicopter market for the Bell 206B-3 showed a total of 58 helicopters ‘For Sale’, as of this writing, with 31 displaying asking prices ranging between $349k and $1.05m. Eleven used MD 500E helicopters were also available for sale, eight of which had

www.AVBUYER.com

The Private Jet Company August.qxp_Layout 1 20/07/2022 11:38 Page 1

Citation X S/N 97 8,242 Hours • Engines enrolled on RRCC • Airframe enrolled on Proparts • New Paint 2021 • Make Offer

2019 Gulfstream G-280 S/N 2177 523 Hours Total Time • Engines Enrolled on MSP • Aircraft Under Warranty • 10-Passenger Configuration + Jumpseat • Synthetic Vision • Heads-Up Display • GoGo AVANCE L5 WIFI • Winglets

2008 Hawker 4000 RC-24 2,159.5 Hours Total Time • 2020 Interior • Factory BPU & Load 20 Upgrades • Engines Enrolled on ESP Gold • APU Enrolled on MSP • Avionics Enrolled on HAPP/CASP • Dual HF

AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 15:33 Page 5

HELICOPTER COMPARISON

Table B - Market Comparison Table

asking prices ranging between $775k and $2.2m.

While each serial number is unique, the amount of total time on the airframe (AFTT), and age/condition will cause great variation in prices. Of course, the final sale price must be negotiated between the seller and buyer before the sale of an aircraft is completed.

Bell 206B-3 JetRanger III MD Helicopters MD 500E

Depreciation Schedule 122

152

40

Long Range Cruise Speed

42

365

Cabin Volume Cu Ft

275

$900k

Seats Full Range (nm)

1,652

$850k

Pre-Owned 2009 Price $USk

308

3.5% 3.6%

*Average Full Sale Transactions in the past 12 months; Source: JETNET Data courtesy of JETNET; Aircraft Bluebook (Summer 2022), OEMs

3

Average Pre-Owned Sold*

% For Sale

In Operation

2 10

0%

Table C - Bell 206B-3 Sample MACRS Depreciation Schedule 2009 Bell 206-3 JetRanger III - Private (Part 91) Full Retail Price - Million $0.900 Year

1

Rate (%)

2

20.0%

32.0%

3

19.2%

5

4

11.5%

11.5%

6

5.8%

Depreciation ($M)

$0.180

$0.288

$0.173

$0.104

$0.104

$0.052

Cum. Depreciation ($M)

$0.180

$0.468

$0.641

$0.744

$0.848

$0.900

Depreciation Value ($M)

$0.720

$0.432

$0.259

$0.052

$0.156

$0.000

2009 Bell 206B-3 JetRanger III - Charter (Part 135) Full Retail Price - Million $0.900 Year

2

1

Rate (%)

24.5%

14.3%

3

17.5%

4

12.5%

5

8.9%

6

8.9%

7

8.9%

8

4.5%

Depreciation ($M)

$0.129

$0.220

$0.157

$0.112

$0.080

$0.080

$0.080

$0.040

Cum. Depreciation ($M)

$0.129

$0.349

$0.506

$0.619

$0.699

$0.799

$0.860

$0.900

Depreciation Value ($M)

$0.551

$0.771

$0.394

$0.281

$0.201

$0.121

$0.040

$0.000

Source: Aircraft Bluebook (Summer 2022)

Table D - MD 500E Sample MACRS Depreciation Schedule 2009 MD Helicopters MD 500E - Private (Part 91) Full Retail Price - Million $0.850 Year

1

Rate (%)

20.0%

2

32.0%

3

19.2%

4

11.5%

5

11.5%

6

5.8%

Depreciation ($M)

$0.170

$0.272

$0.163

$0.098

$0.098

$0.049

Cum. Depreciation ($M)

$0.170

$0.442

$0.605

$0.703

$0.801

$0.850

Depreciation Value ($M)

$0.680

$0.408

$0.245

$0.147

$0.049

$0.000

2009 MD Helicopters MD 500E - Charter (Part 135) Full Retail Price - Million $0.850 Year

Rate (%)

1

14.3%

2

24.5%

3

17.5%

4

12.5%

5

8.9%

6

8.9%

7

8.9%

8

4.5%

Depreciation ($M)

$0.121

$0.208

$0.149

$0.106

$0.076

$0.076

$0.076

$0.038

Cum. Depreciation ($M)

$0.121

$0.330

$0.478

$0.584

$0.660

$0.736

$0.812

$0.850

Depreciation Value ($M)

$0.729

$0.520

Source: Aircraft Bluebook (Summer 2022)

70 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

$0.372

$0.266

$0.190

$0.114

$0.038

$0.000

Helicopters that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, taxpayers are allowed to accelerate the depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period.

In certain cases, helicopters may not qualify under the MACRS system and must be depreciated under the less favorable Alternative Depreciation System (ADS) where depreciation is based on a straight-line method, meaning that equal deductions are taken during each year of the applicable recovery period. In most cases, recovery periods under ADS are longer than recovery periods available under MACRS. There is a variety of factors that taxpayers must consider in determining if a helicopter may be depreciated, and, if so, the correct depreciation method and recovery period that should be utilized. For example, helicopters used in charter service (i.e., Part 135) are normally depreciated under MACRS over a seven-year recovery period or under ADS using a twelve-year recovery period.

Helicopters used for qualified business purposes, such as Part 91 business use flights, are depreciated under MACRS over a period of five years, or by using ADS with a six-year recovery period. There are certain uses of the helicopter, such as non-business flights, which may have an impact on the allowable depreciation deduction available each year.

Table C (left) depicts an example of using the MACRS schedule for a 2009-model Bell 206B-3 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a pre-owned 2009 retail price of $900k, per Aircraft Bluebook (Summer 2022 data).

Table D (left) depicts an example of using the MACRS schedule for a 2009-model MD 500E in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a pre-owned retail price of $850k, per Aircraft Bluebook (Summer 2022 data).

Productivity Comparisons

The points in Chart F (opposite) are centered on the same helicopters. Pricing used in the vertical axis is as published in the Aircraft www.AVBUYER.com

AirCompAnalysis AUGUST22.qxp_ACAn 19/07/2022 11:33 Page 6

AVBUYER.com

Bluebook Summer 2022 data for model year 2009. The productivity index requires further discussion in that the factors used can be arbitrary. Productivity can be defined (and it is here) as the multiple of three factors:

3.

Tanks Full Range with available fuel; The Long-Range cruise speed flown to achieve that range; The cabin volume available for passengers and amenities.

Others may choose different parameters, but serious helicopter buyers are usually impressed with Price, Range, Speed and Cabin Size. After consideration of these, we can conclude that the Bell 206B-3 displays a slightly higher level of productivity, but at a slightly higher pre-owned purchase price (2009 model).

The Bell 206B-3 posts a higher cost per mile (15.9%), but a slightly lower hourly operating cost (5.5%) capability compared to the MD 500E. It provides a higher ‘tank full’ range, but less payload with available fuel, and a slightly smaller cabin than the MD 500E. Overall, these two models are well matched, competing for a similar pre-owned helicopter buyer profiles. Both list ‘Business’ use as the top mission usage (per JETNET), and it’s clear to see how each is very viable on today’s market.

Nevertheless, operators should weigh up their mission requirements precisely, since each model offers slight differences in key areas. Operators will need to decide whether, for example, longer range or greater full-fuel payload capability is more important. And just how much difference will the slightly bigger cabin dimensions make, when both offer the same seating?

And, there are other factors to consider beyond those covered in this article that might factor in a buying decision.

Ultimately, the Bell 206B-3 and the MD 500E continue to be popular on the market today, and current and prospective operators should find the preceding comparison useful.

Both models should continue to do well in the pre-owned helicopter market for the nearterm future. ❚

MIKE CHASE

$1.5

Price (millions)

1.

2.

Chart F - Productivity Comparison $1.2

Bell 206B-3 JetRanger III

$0.9

MD 500E

$0.6 $0.3 $0.0

0.000

0.750

1.500

2.250

3.000

Index*

(Index * = Speed x Range x Cabin Volume / 1,000,000)

Mike’s analytical and consultancy services are highly valued within the Business Aviation industry. He is founder and president of Chase & Associates, and works closely with several respected sources to compile his unique Aircraft Comparative Analysis features.

Contact Mike via mike@avbuyer.com

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FLIGHT DEPARTMENT MANAGEMENT

AVBUYER.com

Aircraft Maintenance Choices: Getting them Right…

Have you thought through your aircraft’s maintenance needs adequately? Are your operations safeguarded against an unexpected aircraft maintenance issue?

Andre Fodor shares some thoughts on flight department maintenance choices...

W

hen buying a business aircraft, one of the most important things to consider is how it will be maintained. Having a clear vision will help ensure that all the owner’s expectations are met, and that the required destinations are reached safely, and when planned.

One of my greatest challenges is to explain the processes of maintenance and airworthiness to the aircraft’s owner.

Owners, who in most cases don’t involve themselves in the intricate day-to-day running of the flight department, understandably expect their airplanes to be like cars: they just need fuel, a ‘driver’, and an occasional oil change.

Helping them comprehend the airworthiness processes and the airplane’s specific maintenance schedules, based on 72 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

calendar months and hours flown, is no easy task. This can be further muddled when an unexpected Airworthiness Directive grounds, or restricts the aircraft’s operational ability.

Juggling all of these, it remains essential to meet an owner’s expectation even if supplemental lift is needed to cover for a maintenance event.

Learning that an aircraft has calendar-due items AFTER it is grounded for an inspection can be puzzling for owners, and it takes an experienced aviation manager to combine and organize due items into cohesive, scheduled tasks that prevent a never-ending cycle of smaller, recurring inspections that disrupt the aircraft’s availability and add cost to the balance sheet. www.AVBUYER.com

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Flight Dept 1.qxp_Finance 18/07/2022 16:16 Page 2

FLIGHT DEPARTMENT MANAGEMENT Developing a Maintenance Plan

For the first five years of new aircraft ownership, one can expect the warranty to cover most parts and unscheduled labor. With the added protection of an hourly engine and/or APU maintenance program, maintenance costs should be predictable, depending on how comprehensive the coverage is.

Those five years provide the opportunity to understand the aircraft’s maintenance cycles, developing a post-warranty plan that falls within two major groups: ‘Pay-As-You-Go’, or ‘Pre-Paid’.

Pay-as-You-Go: A benefit of ‘pay [for maintenance]-as-yougo’ is that your operational capital is only used when it’s needed. In a perfect scenario, the aircraft has relatively few squawks, no major component failures or powerplant issues, and the savings are significant. But this is a gamble and there are potentially expensive risks involved.

Here, the owner assumes full responsibility for maintenance costs, and needs to have ready cash available to pay for major expenses that can be entirely unforeseen.

Considering that a generator installed on a large cabin aircraft may cost $250,000, your bank account needs to have plenty of cushioning for the unusual temperament of a private aircraft.

An engine issue, such as Foreign Object Damage (FOD), could cost well over $1m to rectify — these are significant risks that don’t even factor the costs of supplemental lift or loaner engines, or shipping costs of parts.

This approach, in my opinion, is suited to companies with significant aircraft operating experience, equally impressive cash, large aircraft fleets, and in-house maintenance programs.

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AVBUYER.com Pre-Paid Maintenance: For those who don’t care for such risk, there are variations to the pre-paid approach to maintenance – hourly maintenance programs – into which, you pay an agreed amount of money for every hour you fly. It is here that you’ll find most professionals choose to ‘park their dollars’.

Most will select engine and APU coverage since these are the high dollar expenses. Engine programs will likely include access to a ‘loaner’ pool should yours require rework or repair, ensuring that while the engine, at least, is grounded, the airframe isn’t. And with enrolment on such a program, the residual value and marketability of your aircraft will generally be greater.

What follows after is a smorgasbord of options. Engine OEMs, for example, provide maintenance programs, and so do third-party providers. What are the benefits of each?

Then, some programs provide single-level, comprehensive coverage, while others provide multi-level coverage at different price points. Make sure you know what each does and doesn’t include – cheaper levels of coverage could leave operators exposed to unexpected surprises (for example, shipping costs of parts may not be included).

And then there are providers who offer coverage for multiple areas – from whole airframes to just the avionics.

Regardless of the coverage levels or items you select for coverage, the program provider should have the extensive network and proven track-record to supply your maintenance and parts requirements. When an aircraft is AOG, for example, you need your provider to reach in to its network and source whatever parts and expertise are needed to get you back in the air wherever you are in the world, with minimal delay.

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Flight Dept 1.qxp_Finance 18/07/2022 16:19 Page 3

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An MRO Piggy Bank

I, for one, opted for something comprehensive. After our aircraft exited its five year warranty, I selected a program including parts, scheduled and unscheduled labor, and prepayment of our ten year inspection and landing gear overhaul.

Since our budget assumes 300 hours of flying annually, we formulated this assumption into a pre-set monthly rate which is billed irrespective of whether we fly 300 hours or not. This ultimately forms a maintenance ‘piggy bank’ that, at the end of our contract, may generate a refund of unused funds, less a management fee.

My annual budget is nearly exact with these solid maintenance numbers behind it. And since we have our own director of maintenance, small inspections and squawks are

ANDRE FODOR

resolved in-house and billed back to the provider to be added as credits at the end-of the contract.

In Summary…

Whatever you choose, don’t approach aircraft maintenance with the hope that issues can be resolved as they happen.

Especially in today’s world of heavy MRO shop schedules, supply chain issues, and high charter demand, you’ll end up being the one paying a premium, while searching for labor and elusive parts in order to make the next trip happen.

Having a solid maintenance plan is critical to successfully dispatching your aircraft in a way that delivers a great ownership experience. A well-structured program will be key to delivering quality and keeping your managed aircraft safe and airworthy. ❚

With a focused approach on global excellence and creativity, Andre Fodor has managed flight operations for the U.N. and Flight Options as well as being a senior demonstration pilot and instructor for Embraer Aircraft. He is the Aviation Director for his current employer. https://www.linkedin.com/in/andrefodor/

www.AVBUYER.com

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Flight Dept 2.qxp_Finance 19/07/2022 08:47 Page 1

FLIGHT DEPARTMENT MANAGEMENT

AVBUYER.com

Balance Demand with Pilot Wellbeing: The Pressures With demand on pilots flying business aircraft currently being high, and with experienced pilots in short supply, how can operators of business jets strike the right balance between passenger service and pilot wellbeing? Mario Pierobon explores…

I

n today’s environment of increased flying hours and high demand for business aircraft, it is of utmost importance for flight departments to know how to balance excellent service with a positive working environment for flight crews.

Following, we’ll review the state of the industry and some inhibiting factors that flight departments can find themselves up against.

State of the Industry

Business Aviation is under significant pressure currently, according to a safety consultant operating within the industry, who wished to remain anonymous.

“The big picture is very simple, the General Aviation 76 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

aircraft fleet has not grown in number over the past two or three years.

“The GA fleet, especially in Europe, has perhaps shrunk a little given that not many aircraft have been delivered in the last two years. Conversely, more aircraft have been sold in the US where demand has also increased. We can say that the number of airplanes is about the same or perhaps a little less [than a couple of years back].”

So, the fact that more hours have been flown means that the use of the airplanes comprising the fleet has been rising. “If airplanes in Business Aviation fly more, it means their crews are flying more.”

Another thing that’s also impacted is maintenance, www.AVBUYER.com

Contents JULY22.qxp 26/07/2022 10:42 Page 1

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Flight Dept 2.qxp_Finance 19/07/2022 08:48 Page 2

FLIGHT DEPARTMENT MANAGEMENT

with the consultant arguing there’s a need for the maintenance workforce to increase. “However, [the number of] maintenance employees are more-or-less the same as before, if not fewer – which means there’s a need to plan for maintenance slots several months ahead of time – even for simple maintenance.”

The demand for Business Aviation over the past couple of years has come from a wider consumer base. “Much of the increased demand for flights is for leisure [travel] with family or friends”, the consultant notes, adding that this is a clientele-type that can pose challenges to operators.

“Last-minute requests, or passengers showing up with a lot of luggage to fit onboard a small airplane,” are just a couple of examples, the consultant suggests. “While operators try to accommodate these challenges, bottlenecks are inevitable given the current constraints on airplanes, crews, flight time limitations (FTL), and maintenance.”

That means operators may need to quickly hire copilots – potentially including those with far less experience than they might have hired previously – to

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avoid not having enough crews available for duty.

“Currently, it is not unusual for a small [charter] business aircraft to accomplish up to six flights daily,” the consultant says. Thus, the environment is one of high pressure.

Other Factors Increasing Pressure on Operations

With the cost of fuel almost doubling over the last six months, “to maintain profit margins some operators could be strongly motivated to tanker, which implies specific considerations for planning and conducting flights,” thereby increasing demands on flight crews.

And with the increased flight activity, difficulty in finding slots can add pressure on crews. “If the demand for Business Aviation increases further, there will be increasing pressure on ramp space to park, and also on ground handling services,” the consultant adds.

“Ground operations is a risk area in its own right,” he elaborates. As pressures build on the services offered at a known, preferred destination airport,

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Flight Dept 2.qxp_Finance 19/07/2022 13:30 Page 3

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operators may turn to alternatives that are less stringent in the way they control ground traffic, increasing exposure to risk of ground damage or hangar rash – another reason for increased stress on crews, according to the consultant.

“This year, flight crews are being subjected to more pressure than ever,” he concludes. “In this environment, some pilots are coming out of a period of very little flying, perhaps having lost some sharpness or skill not only in piloting, but also in-flight management.” Now they’re finding themselves thrust on to the front line.

Next Time…

Having provided an overview of the pressures facing operators and crews within Business Aviation, next time we’ll review some of the best practices that business aircraft operators can follow to manage those pressures, ensuring their pilots’ wellbeing is looked after. Stay tuned… ❚

“This year, flight crews are being subjected to more pressure than ever...”

MARIO PIEROBON

is a safety management consultant covering both fixed- and rotary-wing operations. He writes broadly on safety-related topics, with expertise of air operations and crew training safety regulations. As a consultant, Mario helps companies improve procedures. His knowledge of safety is valued by several industry-leading publications, including AvBuyer.

More information from: https://www.linkedin.com/in/mario-pierobon-85991319/

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CABIN Electronics 1.qxp_Finance 18/07/2022 15:54 Page 1

CABIN ELECTRONICS

Installing USBs in BizJets: An Unexpected Challenge Looking to ensure your cellphone, iPad and laptop stay fullycharged aboard your business jet? Then you’ll need to install USB ports. Before you do, though, there’s a bit for you to consider.

Chris Kjelgaard speaks with Duncan Aviation and Garmin…

A

ircraft owners choosing to install rapid-charging USB ports at each passenger seat are creating a trend that has important implications for aircraft electrical power-generation requirements — both in itself, and in what it could presage for future aircraft power needs as new technologies make their way into the cabin.

One of the most noticeable trends in Business Aircraft cabin refurbishment today is for owners to ask MRO providers to install rapid-charging USB ports at every passenger seat in the aircraft, to allow passengers to use their personal electronic devices in flight and keep the devices fully charged.

These installations are often accompanied by similar installations of USB rapid-charging ports on the flight decks of the aircraft, as owners and pilots replace traditional flight bags with lightweight, easy-to-use, easy-to-access tablet devices.

Moreover, aircraft owners usually want installations of dual ports, rather than single ports, at each seat and pilot position, according to Duncan Aviation’s Avionics Sales Representative Adrian Chene.

Also notable, according to Bill Stone, Senior Manager for Aviation Business Development at Garmin International (a leading manufacturer of aviation-grade USB charging ports), is that owners usually choose to have the most powerful USB rapid-charging ports installed, rather than the less powerful ports that the manufacturers also offer.

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The desire to install dual USB ports at every passenger seat is a natural one for owners when passengers in Business Aircraft cabins increasingly are consuming personally selected video, graphic and audio content by means of their PEDs, rather than everyone watching or listening to the same video or audio content at the same time, on bulkhead monitors and whole-cabin sound systems.

USB ports at each seat not only provide each passenger with individually tailored entertainment and communications, but also the major convenience of keeping each passenger’s PED batteries topped up to allow immediate use when the passengers disembark from the aircraft.

However, there is a cost associated with the increased individuality and convenience that USB ports at each seat provide.

The direct cost of installing certificated aviation-grade dual USB rapid-charging ports at each seat is not major in terms of the notoriously expensive business of buying and installing aircraft equipment. But neither is it insignificant…

Such units — which, unlike ordinary consumer USB ports have hardened, specially tested electronic circuits to ensure they do not create radio interference with flight deck avionics and radios, and are designed specifically for use in aviation environments — are priced at around $300 each.

And they require installation, at a price, by an MRO provider which knows what it is doing. www.AVBUYER.com

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Indirect Costs of Installing USB Rapid-Charging Ports

Just as importantly, there’s also an indirect cost associated with installing USB ports — one to which many owners may not have given much thought, but which could be a concern, particularly for owners wishing to retrofit older Business Aircraft with USB data feeds and rapid-charging capability. That cost is the increased electrical power requirement demanded of the starter-generators associated with each engine, to produce the sizable amounts of power that dual USB rapid chargers need.

Stone and Chene note that the additional peak USB-port electrical power requirement, plus the existing electricalpower requirements for the aircraft’s other flight deck, control, systems and cabin functions, must lie well within the specified electrical power-generation capability for which the aircraft is type-certificated.

Simply put, to provide a sufficient margin of control and safety in any foreseeable operational situation, type certification rules for any aircraft require the maximum potential consumption of electrical power by all the aircraft’s systems to be no more than 80 percent of the aircraft’s certificated electrical power-generation capability, according to Stone.

That said, Chene notes different aircraft manufacturers have different methods for calculating the peak electrical loads and requirements on their aircraft, which in practice might stretch the 80 percent limit by a few percent.

The arithmetic by which the maximum power www.AVBUYER.com

requirement for the aircraft’s USB ports is derived is simple.

As an example, Chene posits a retrofit with dual USB rapidcharging ports at all 12 passenger seats and the two pilot seats in a Dassault Falcon 900EX, which (like all other modern Falcon models) is designed largely to use DC electrical power rather than AC power.

When charging personal devices, aviation dual USB rapid-chargers can draw peak electrical input loads of 60 watts or more per port. (Garmin’s GSB 15 dual-port USB Type A units draw a maximum of 68W per port, while each of the two ports in Mid Continent Instruments’ TA360, another widely used aviation dual USB rapid-charger, draws a maximum of 60W.) Stone notes that such peak input loads last only for very brief periods, because the device being charged controls the level of power draw and can only handle the peak input power level for a short time, reducing the draw quickly from that level as its battery becomes more fully charged.

But Chene points out the overriding factor in calculating the aircraft’s total electrical-power requirement is that the aircraft’s type-certification rules require that, no matter how unlikely it would be for everyone on the aircraft to be charging devices through two ports at the same time, the starter-generators must be able to provide (say) 68W x two (USB ports per seat) x 14 seats, for a total of 1.904kW. At the same time, the aircraft’s starter-generators must also provide enough power for all the aircraft’s other electrical requirements.

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AVBUYER.com Photo courtesy of Duncan Aviation

On top of that, to meet the type-certification requirement the total of the theoretical power in wattage required by all the USB ports, plus all the electrical power required by all the aircraft’s other systems, must come to no more than about 80 percent of the total electrical power-generation capability the aircraft’s starter generators provide.

developed for the consumer market increasingly found their way into aircraft cabins.

“It was the same with houses,” Stone notes. “It used to be you needed 80 Amps to power your house, and now you need 200.”

Replacing the Engines’ Starter Generators

It is now “very common” for owners to have USB ports installed on flight decks and in cabins when they induct their aircraft for avionics upgrades, “for Cessna 172s and everything up from that,” Stone notes.

In every case, no matter what the aircraft type, the MRO shop has to perform an electrical load analysis to ensure that the electrical power requirement for the USB ports doesn’t tax the aircraft’s power-generation system to a level beyond that allowed by the aircraft’s type certification.

If it does, the aircraft owner must be prepared to trade off existing cabin electrical requirements against the desired USB rapid-charging capability or pay the cost of performing a starter generator replacement, downsize in scale, or forgo completely, the planned installation of USB rapid-charging ports.

When ordering a retrofit, the owner must take pains to know just how much accomplishing the relevant starter generator replacement STC will cost, particularly when the aircraft in question is older or otherwise has a relatively low residual hull value. In some, or many, cases no startergenerator replacement STC is available at all.

Indeed, Chene recently asked one Business Jet manufacturer how much its starter-generator replacement STC would cost to perform, and the OEM replied that it had never received a customer request to develop such an STC. But where an STC is available, the cost of having the replacement starter generators installed is always expensive — and particularly significant for any owner whose aircraft is worth only a few million dollars in the first place. Chene explains that any replacement STC is “highly likely” to

A new, additional power draw of 1.9kW might not sound very important, considering that in aircraft whose startergenerators are designed to provide AC power (in other words, most older aircraft), AC inverters each consuming 1,200W-2kW of power are used to provide DC power to heat coffee pots and coffee makers, and other AC inverters on board provide power for flight deck avionics units. It was “very common” for aircraft built 20 years ago to use powerful AC inverters to provide 110V power to the cabin, according to Stone.

Now USB power is taking over. And the fact remains that supplemental type certificates (STCs) exist for various business aircraft type — particularly turboprops such as Beechcraft King Airs and possibly smaller, older business jets — to provide more powerful starter generators to replace the starter generators with which they were originally fitted.

According to Stone, early-model King Airs were fitted with two 200kW starter generators, one per engine, but over time the standard grew to 250kW starter generators.

For special mission needs (many King Airs are used for government and commercial special missions), the total electrical power requirement “vastly exceeds that” 400kW or 500kW total, and STCs now exist to provide King Airs with two 400kW starter generators, says Stone.

The development of STCs for replacement starter generators resulted, at least in part, from a long-term trend from the 1960s through until relatively recently. That trend was for new and older aircraft designs alike to require more electrical power, as electronics capabilities which were 82 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

Starter Generator Replacement – How Much?

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CABIN ELECTRONICS

Type A and Type D USB ports installed in a flight deck.

Photo from Garmin.

require replacement of the starter generator in each engine on the aircraft, not just one engine.

For all sorts of operational, safety and maintenance reasons, it would be inadvisable to replace the starter generator for one engine but not the unit for the second or third engine. That would result in the power draw from each engine being different, potentially creating an unacceptable flight-safety risk.

Should an STC for replacing the aircraft’s original starter generators be available, the owner should be prepared to receive a bill from the MRO shop for $300,000-$400,000 to cover the cost of the equipment and labor, says Chene. For the sake of gaining a few USB rapid-charging ports, such an investment could easily prove more than the owner of an aging Business Aircraft might be willing to bear.

Stone reckons the trend toward increased cabin electrical-power usage has now flattened out and he sees it basically remaining similar to those of today as updates of existing cabin electrical and electronic technologies are introduced which use the same (or less) power as today’s technologies.

He says LED cabin lighting is a good example of a modern electrical technology now becoming prevalent in Business Aircraft cabins which uses less power overall than predecessor cabin lighting systems.

Future Cabin Electronics Technologies

Stone acknowledges that future electronics technologies which do use more power than today’s technologies, or which are functionally different from and additive to current cabin electronics systems, could appear in aircraft cabins — in some cases after first being introduced in the consumer electronics market. Those could change the cabin powerusage picture, he suggests.

In that respect, the widening adoption by aircraft owners of cabin USB rapid-charging ports may herald a future in which electrical power usage in the cabin grows to levels 84 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

AVBUYER.com

“It is now very common for owners to have USB ports installed on flight decks and in cabins when they induct their aircraft for avionics upgrades, for Cessna 172s and everything up from that...” greater than those of today. Chene thinks it’s very likely that in the not-too-distant future any one, or all, of a clutch of new cabin electronics technologies could become widely used in Business Aircraft and any of them could increase the existing total cabin power requirement.

In some cases, those technologies might mature to become less power-hungry than the older cabin electronics systems they displace — but in other cases they might just add to the cabin’s overall electrical power need. Five different technologies, each requiring as much or more electrical power than the existing system it might replace, appear particularly strong candidates for future cabin adoption, according to Chene.

High-End Audio: First is the known trend of owners increasingly contracting MRO facilities to install very highend cabin audio systems in their aircraft. While the loudspeakers in such systems may be more efficient than previous-generation speakers on a watt-for-watt basis, the extremely pure sound reproduction capabilities such audio systems offer throughout the entire cabin can still require sizable amounts of electrical power to drive them.

Noise Cancellation: A second, somewhat related technology that may or may not be feasible in the aircraftcabin context could be the advent of part-cabin or whole-cabin noise cancellation, to reduce the aerodynamic and engine noise that passengers in Business Aircraft cabins now experience.

Chene posits one way which possibly could be adopted to provide cabin noise cancellation could be installation of sound transducers behind the cabin wall panels, like those now used by Bongiovi Acoustic Labs to vibrate such panels to provide cabin audio content.

Instead of producing sound frequencies unilaterally, such transducers could be rigged with microphones to generate and output sound signals containing frequencies exactly www.AVBUYER.com

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opposite to the ambient aircraft and cabin frequencies picked up by the mikes, far faster than any latency delay the human ear could detect.

In that way the transducers would work exactly like the microphones and speakers in personal noise-canceling headphones, completely flattening the sound frequencies from aerodynamic and engine noise.

Bendable Flat-Panel Video Screens: A third technology Chene reckons could be introduced into Business Aircraft cabins in the fairly near term is development of large, bendable flat-panel video screens capable of wrapping around part, or all, of the fuselage cross-section.

Such screens could display camera views of the sky below, around and above the aircraft, making passengers almost feel they were traveling through the air on a magic carpet with no solid aircraft structure around them.

Air Sterilization Systems: Fourth in Chene’s potential new cabin-technologies list is a cabin air sterilization system much faster-acting than the relatively new plasma ionization air-filtration system now being introduced into various business aircraft.

Instead of using hydrogen and oxygen ions derived from water to disable and kill pathogens and remove dust particles from the cabin air (as plasma ionization does), this other existing technology would instead use very narrowband ultraviolet light to destroy within a second or two any single-celled and viral organisms in the cabin air.

The UV light would be of a frequency not perceptible to the human eye, and unable to penetrate and damage human epidermal layers, but able to kill small pathogens instantly.

In an aircraft cabin, such a system would kill a virus particle emitted by someone sneezing, even before the particle could travel to the person sitting nearest the person who sneezed, says Chene. The system hasn’t yet been FAA type-certificated for aircraft use, but it is FDA-approved and could see FAA approval soon.

Sensory Technology: Fifth and last in Chene’s speculative list is a sensory technology which could serve not only to control the functioning of several of the previously discussed innovations but revolutionize the jobs of flight attendants 86 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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in Business Aircraft.

Chene says several aircraft OEMs are already working to develop systems that by various sensory means would be able to measure the stress responses of passengers to levels of cabin temperature, humidity, noise, light, air movement, etc. and allow flight attendants to adjust cabin levels in ways that would help to reduce passenger stress.

“The immersive [cabin] environments that we think are likely to happen are going to be power-hungry,” says Chene. And that is just a starting point for how he thinks business aircraft and the private aviation experience will evolve in the future — an evolution which could see the need for yet more electrical power being provided to the cabin.

“Vendors need to leapfrog [cabin] technologies over just transferring home entertainment to aircraft, to something a lot more inspiring,” he says. Augmented-reality technologies and technologies such as transparent OLED video panels are needed, “to inspire people and give them a sense of the lifestyle they’re enjoying” as passengers onboard business aircraft.

That sense of ease and luxury, and the relaxation, stress minimization and productivity it will help passengers achieve, will contribute greatly to the perceived, and actual, value of Business Aviation for all associated with it. ❙ More information from: Duncan Aviation: www.duncanaviation.aero Garmin: www.garmin.com

CHRIS KJELGAARD has been an aviation journalist for 40 years and has covered a wide variety of industry areas during that time. He has served as editor of ten print and online titles and written extensively on many aspects of aviation.

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AVIONICS

Worldwide Aviation Digital Communications: An Overview Ken Elliott reviews worldwide digital communications in aviation. How is the efficiency of our shared airspace being improved? Find out here…

T

he transition to current and future aviation digital communications involves aircraft equipage that is ‘required’, based on operational need. While newbuild platforms are ready for datalink, however, pre-owned aircraft owners are forever in catch-up mode.

Aircraft have range and altitude limitations, based on their size and performance. Some are frequent users of oceanic airspace while others aren’t. Nevertheless, digital communication is not just for remote operations anymore.

Significant reductions in dispatch and flight time, and fuel savings, represent a cost and time advantage to operators in domestic airspace.

As preferred tracks fill up across the oceans and remote regions, popular overland routes stretch the capacity of continental air traffic. ‘Best equipped and best served’ is the way forward, and operators who invest in the equipment, training, and approvals will continue to reap the cost and time savings.

Aircraft Communications, Addressing & Reporting System (ACARS) was introduced to commercial air traffic in the 1970s to satisfy a need to improve crew time-reporting.

ACARS messages are short bursts of VHF data sent over the same VHF band as the radio voice on dedicated frequencies assigned to ACARS. Messages were originally available as Telex printout, digital generated voice, and then – later – routed to Flight Management System (FMS) displays for visual display. Modern ACARS messages include Out-Off-On-In (OOOI) events, flight plans, weather data, and

90 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

performance status of flights.

For Business Aviation, datacom has also been around for some time with its emergence in the VHF Data Link (VDL) capability engineered into aircraft VHF radios.

While ACARS is character-based data, Aeronautical Telecommunications Network (ATN) is bit-based. Early versions of ATN were Mode 0 and A. The current version is Mode 2, and the future version will be Mode 3. The Modes reflect the characteristics of the data transferred – for example, you may be familiar with the terms VDL Mode 2 and ATN-B1.

Note that among other characteristics (such as 4D trajectory data), the preferred ATN-B2 includes both ATN-B1 and the Oceanic/Remote Future Air Navigation System (FANS) as FANS 1/A+. Currently, ATN-B2 is the means of US FAA operating datalink services with the exception that Satcom datalink protocols are not currently in use domestically.

Digital communications are not restricted to the Very High Frequency communication radio bands. Understandably, because VHF is limited to a line-of-sight range, it is ineffective over oceans and in remote regions. Both High Frequency (HF) with Selcal and Satellite (Satcom) solve that problem, and while both are traditionally voice systems, today they are datalink capable.

Worldwide digital communications cannot be assessed in isolation. Indeed, the avionics suite of Communication, Navigation and Surveillance (CNS) are all integrated with respect to Air Traffic Management (ATM). For example, when www.AVBUYER.com

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AVBUYER.com

traversing intercontinental tracks, air traffic control must be assured of the capability of each aircraft to be tracked, with intentions known and guaranteed ability to fly within a specified 4D corridor.

Data Link Services (DLS)

The umbrella term of DLS embraces a confusing array of technologies, flight performance criteria and flight monitoring tools. This can be overwhelming and daunting for any flight department to tackle.

While your flight department may only need partial equipage and possibly no crew authorization, it may still be beneficial to have a background understanding of Data Link.

Figures 1 through 3 (overleaf) attempt to capture the full scope of DLS, as it exists today, and as it is being introduced.

In particular, the ATN-B2 Safety & Performance Requirements (SPR) is significant in its scope. It covers the provision of DLS across all phases of flight, with a keen focus on the future. www.AVBUYER.com

Required for operations in FANS oceanic & remote airspace: • • • •

Equipment (as shown in Figure 3, see page 94) Approved training Letter of Authorization ICAO filed flight plan that includes correct equipage codes

Note: An additional equipment code [J6] exist for use of Japan’s MTSAT satellite system

PBCS the Assurance of CPDLC & ADS-C

Due to capacity limitations, the North Atlantic Airspace (NAT) has introduced Performance Based Communication and Surveillance (PBCS). Operators must meet the performance criteria and provide the assurance to Air Traffic Control (ATC) that they can safely fly within specified parameters that AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

91

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AVIONICS

AVBUYER.com FIGURE 1: Data Link Services !"#"$%&'($)*+,&-*) ")#*+& !"#$%,'+

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enables greater traffic flow along popular North Atlantic tracks.

There are two parts of PBCS, communication and surveillance.

• •

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RCP 240 – communications RSP 180 – surveillance

• • • • •

Note: 240 and 180 refer to the maximum permissible transaction times in seconds.

• •

Compliance with PBCS assures aircraft flying in selected NAT tracks that they can operate at 30nm or 50nm, and five minutes longitudinal separation minimum, and 23nm lateral separation minimum.

Each day the NAT issues Organized Track Systems (OTS), one east- and one west-bound. At the center of the OTS are those tracks that are available to qualified operators who meet PBCS monitoring requirements. To meet the requirements is a universal exercise, as all the following must be checked:

•

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Aircraft operating systems meet performance criteria during flight Aircraft operator approval Crew qualification and approval Onboard crew alerting of inoperative PBCS-related functions Aircraft Master Minimum Equipment List (MMEL) related items Aircraft Flight Manual PBCS procedures and limitations Air Traffic System (ATS) able to monitor and manage PBCS Communication Service Provider (CSP) speed, capacity, and accuracy.

To operate within the OTS tracks, the aircraft and CSP must be able to meet the performance requirements for any data link communications. Performance criteria is based on transaction time, as the maximum time for a transmission/response. Also, performance is monitored as a percentage probability in three categories of: • Continuity as the probability that the transaction time

FIGURE 2: ATN-B2 Safety & Performance Requirements - Converged

92 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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AVIONICS

AVBUYER.com FIGURE 3: Aircraft Equipage Requirements "?8<8124$*=>?F1D3$+3=>?83:3;4@ ")#*+& !"#$%,'+

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• •

will be met Availability as the probability that the communication can be initiated Integrity as an acceptable failure rate per flight hour.

Regarding actual times and percentages…

•

RCP 240: - Maximum transaction time – 240 seconds - Continuity – 99.9% - Availability – 99.99% - Integrity – 1 in 10-5

•

RSP 180: - Maximum data delivery time - 180 seconds - Continuity - 99% - Availability - 99.99% - Integrity – 1 in 10-5 PBCS monitoring communication and surveillance is like the existing monitoring of altitude (RVSM) and navigation (PBN-RNP). NAT monitoring includes RVSM and PBN-RNP,

and while PBCS is limited to certain OTS tracks in the HighLevel Airspace (HLA) of the NAT, in the future it will be required across other popular flight corridors.

Apart from the NAT regions, PBCS assurance is also monitored across the Pacific, including southern portions, and in a sector near Singapore.

US DCL

Data Link, as automated Departure Clearance, is available across the US at 64 airports and is being introduced for enroute flight. The following are required for US DCL operations: • • • • • •

Equipment (as shown in Figure 3, above) FANS protocol logon to US DCL tower using VDL Mode A or 2 No Letter of Authorization (LOA) required for US registered aircraft Flight plan that includes correct codes Pre-Departure Clearance (PDC) still in effect Aural and visual warning.

FIGURE 4: PBN (RNP) Component to Complete the Monitoring Assurance Criteria for NAT Operations (add RVSM compliance)

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AVIONICS

Eurocontrol Data Link 2020

Europe’s data link evolution has gone through many stages with different titles, such as LINK 2000+, and frequent delays. More recently Eurocontrol has introduced another version, Data Link Services – Implementing Rule (DLS-IR).

As of February 5, 2020, flights undertaken above FL285, within the IFR General Air Traffic (GAT), were required to use ATN B1 VDL Mode 2 data link. But there are many exemptions.

This is a version of CPDLC, and those aircraft capable of CPDLC via their FANS 1/A+ may not use their CPDLC in place of the ATN B1 VDL Mode 2 version.

Future Digital Communications and Data Link Overview

DLS are incrementally introduced, relying on regional and incountry specifics, and are subject to both delay and staggered implementation. When predicting the future of DLS, shifting trends and advancing technologies can skew outcomes.

Because DLS increases airspace efficiency, ATC can establish re-routes, tailored arrivals and ADS-B In Trail Procedures (ITP) more effectively. Both domestic and intercontinental ATC can be adaptable to the impacts of weather and traffic volume. Providing automated track changes to individual aircraft and knowing their unique equipage status, they can prioritize and optimize based on ‘best equipped, best served’.

Data communications will advance based (somewhat) on these technologies:

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Dynamic RNP plus D-TAXI, and other volume-sensitive ATS services. (Note: ATN-IPS is planned to support technologies operating in the proposed ATN-B3 application.)

DLS Aircraft Equipage

Operators should anticipate changes to existing, and acquisition of new, airborne equipment to accommodate ATN-B3 future applications. The equipment will need to cope with IPv6 internet protocol, providing advanced data link services, ranging from digital communications, through surveillance and to dynamic navigation.

Not only will aircraft need to function in this internet environment, but they will need to record activity and be capable of real-time flight monitoring, via their CSP to their flight departments and support services.

While cabin Wi-Fi systems will advance in cockpit capability, there will need to be a firewall between passenger and cockpit data link over IP services. Cockpit services will require safety, security, and reliability assurances way beyond those required for cabin applications.

•

Existing VDL Mode 2 services (US FANS 1/A+ with VDL Mode 2) • Airport surface – AeroMACS AeroMACS is a broadband wireless service operating in a protected aeronautical frequency band for use across the airport surface.

• Terrestrial coverage – LDACS LDACS (L-band Digital Aeronautical Communications System) is necessary to overcome the spectrum limitations of HF and VHF by introducing a new broadband service. Note its introduction is subject to no Radio Frequency Interference (RFI) across existing airborne, ATC and ground systems.

• Oceanic + Remote coverage – Satellite While satellite coverage is still limited to mostly Iridium and Inmarsat, it can be anticipated that the use of reduced latency, new Low Earth Orbit (LEO) satellite constellations will become popular.

The protocols and standards to apply present and future technologies are: • • •

ACARS/FANS – Legacy data and messaging communication standard ATN-OSI a legacy IACO routing standard currently in use (ATN-B1 and B2 applications) ATN-IPS (IPv6) Internet Protocol Suite, operating as an internet and allowing the volume of data link required for future 4D Trajectory Based Operations (TBO), such as

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In 2020, Europe’s SESAR Deployment Manager issued a very detailed and useful 36-page document, ‘Assumptions for a synchronised deployment towards Initial Trajectory Information Sharing’. For those seeking further clarification of Europe’s data link intentions that mostly applies anywhere, this document is highly recommended.

ICAO has taken a bold new stance on future aviation plans that includes DLS, via its ‘ICAO Draft Global Concept for Integrated Communications, Navigation, Surveillance and Spectrum - May 18, 2022’.

There are two major considerations introduced in this document: •

Other airspace users Urban Air Mobility Unmanned Aircraft/Remote Piloted Vehicles Supersonic High Altitude

KEN ELLIOTT

•

Spectrum (use of frequency spectrum) Airborne systems Air traffic, satellite and service providers Terrestrial systems (not aviation)

Although these are not new considerations, ICAO has brought them both into necessary focus in this draft proposal for future planning. Its busy roadmap takes the user through to 2050, in three strategic stages of short-, medium- and long-term. Apart from ‘airspace users’ and the ‘frequency spectrum’ concerns, the plan includes traditional topics, such as environment, airspace access, slow technology adoption, and regulatory processes.

Lastly, there is a possibility that greater use of 4G- and new 5G-based technology will further transform and disrupt the process of DLS advancement. While these internet capabilities are being explored and gradually implemented in airspace redesign, their true benefits are yet to be realized. ❚

has more than 52 years of aviation experience focused on avionics in General and Business Aviation. Having a broad understanding after working in several countries on many aircraft types and avionics systems, he has contributed to several work groups and committees, including for NextGen, Airport Lighting, Human Factors, Unmanned Aircraft and Low Vision Technology. In retirement, he is striving to give back the knowledge gained with an eye on aviation’s future direction.

www.AVBUYER.com

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Cessna Citation Bravo

Private Seller

Tel: +1 (248) 663 7000 E-mail: info@housey.com This is a superb example of a low-time Citation II SP (single pilot), the largest cabin turbojet aircraft with thrust reversers (TRs), which are excellent for cold weather operations on snowy/icy runways. Perfect for the owner/operator who wants to build turbine time while running his/her business. The aircraft has been meticulously maintained and pampered for the last 18 years by the same part 91 business owner/operator. The aircraft could use new paint and interior, but is mechanically sound and has extensive avionics upgrades and modifications. No 135 operations at any time. 7180 Total Airframe Hours. You simply can’t get more cabin volume or value for the dollar in a single pilot certified turbojet aircraft.

Principals only please. No dealers/brokers.

Tel: +382 674 692 73 E-mail: pekivan@gmail.com

Price:

$2,500,000

Year:

2000

New paint and interior: 06,2021

S/N:

550B-0924

Enrolled on ESP GOLD, Pro parts plus

Reg:

YU-BZZ

TTAF:

9899

Location: Serbia

Airbus/Eurocopter EC 120B

HELITACTICA S.A. Price:

Please email

Year:

2001

S/N:

1230

Reg:

ZP-HEC

TTAF:

2685

Location: Paraguay

Airbus/Eurocopter EC 120B

Andrew Leslie Price:

£850,000 No VAT

Year:

2008

S/N:

1565

Reg:

G-IAGL

TTAF:

1078

Location: United Kingdom

102 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

Tel: +1 595 9766990111 E-mail: alexandre@helitactica.com.py Engine currently on Safran SBH Program. In 2021 the 15-Years inspection was executed at Safran, and several new components were installed. - Completely redesign: new leather interior, new carpets, new airframe exterior and interior paint, all new windshield and side windows. Bose stereo connection. - 12-year airframe inspection compleated on July/2021. Huge investment on several items. - Original Fuel flow meter, an expensive optional. Gives range in distance and flight time. - Price includes annual inspection and Export COA at the time of delivery. Seller is a Part 135 Operator and a Part 145 Maintenance Facility. In 2021 installed the best avionics available on the market: - Latest Garmin double 7” portrait screen G500HTxi (pilot and copilot). - GTN750HTxi with remote audio and transponder.

Tel: +44 (0)771 040 2980 E-mail: andy.leslie@network-airline.com Truly immaculate privately owned helicopter which I have owned for the last eight years. Only 1078 hours since new. 12 year check including full bare metal respray by Edmondson Aviation carried out in 2020. VIP grey leather interior. Full floats which have just been fully serviced. Helicopter will be delivered fresh from 12/24 month check.

This helicopter is absolutely perfect and has been maintained by A2B at Shorham since 2013. Further photos, video and full status report on hours, cycles, life limited parts etc available on request.

This helicopter is like new in every respect. Please don't hesitate to call or email me for any other pertinent information. No VAT applicable.

www.AVBUYER.com

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Leonard Hudson

BELL 412EMS

Price:

Offer

Year:

1981

S/N:

33017

Reg:

N554AL

TTAF:

15265

M A R K E Tel: +1 (806) 662 5823 T Drilling Email: ronfernuik@hotmail.com P L Full EMS Medical 4 patient and 4 attendant interior.

A Recent ‘no expense spared’ airframe refurbishment at C Acro Helipro within the last 100 hours.

E Both engines are fresh Pratt and Whitney overhauled.

Immediate delivery, Meticulous records.

Current with medical interior and 13 passenger utility interior are included, aircraft is ‘turn-key’ will provide Fresh annual /Export C of A

Location: USA & Canada

BELL 212 (Five Available)

Tel: +1 (806) 662 5823 Email: ronfernuik@hotmail.com

Leonard Hudson Drilling Price:

Please Call

Year:

1991-1996

S/N:

Call for details

Reg:

Call for details

TTAF:

Call for details

Five, Late Model, Bell 212s In 'Off Shore’.

Available for immediate use.

Asking $3.1M to $3.6M USD. Serial numbers: 35034, 35048, 35060, 35088 and 35096

Location: USA & Canada

Bell 206 BIII Jetranger

Price:

Make offer

Year:

1986

S/N:

3949

Reg:

G-TOYZ

TTAF:

5490

Location: Ireland

Bell 206B III

Tel: +44 (0)775 473 7565 E-mail: info@cuttingedgehelicopters.com

Cutting Edge Helicopters

The Helicopter has been meticulously managed and maintained by an Approved Part 145 Organisation and is in excellent condition inside and outside. It is fitted with Van Horn Aviation Tail Rotor blades. The Turbine is currently due 1750 hour HM Inspection (approx. 25 hrs) The current owner is planning to have this work completed prior to sale, however, the Helicopter may be sold with or without this Inspection completed.

Ideal for Private Use or for Leasing to a Certified Commercial Operator.

Avionics: Bendix King KX165 Nav/Com. Bendix King KT76C Transponder. Bendix King KY96A Transceiver. Ext: Blue over White with Grey detailing stripes. Blue leather seating with white piping. Light trim.

Dual Controls. Crew Inertia Harnesses. Pneumatic Door Openers

Tel: +372 53 33 76 50 E-mail: margus.juhkam@mb.ee

Margus Juhkam Price:

$729,000 Excl. VAT

Year:

2004

S/N:

4583

Reg:

ES-SIL

TTAF:

2745

Location: Estonia

Aircraft Spare Parts Wheels, Starters, Brakes, etc.

Outright and Exchange

In very good condition, properly repaired and maintained. All service logs available since new. It has no damage history. It has VIP-stylence interior 4Pax + 1 Pilot. Red and Black Leather. Airframe: 2.745:29 TSN (as of May 2022). Engines: Rolls-Royce 250-C20J. Avionics: VFR Night & Day. COM Bendix/King KX165A. NAV Bendix/King KX165A. XPDR Bendix/King KT76A. ext: White Base with Dark Blue Major & Burgundy Accent Colors. Additional: Deflector Kit. Particle Separator. Hi-Skid Landing Gear Tubular Type. Engine Automatic Re-Ignition. Auxiliary Battery 13 Amp/Hour. Engine Fire Detection System. Bleed Air Heater.

Dual Rotor Brake System. Dual Controls. Remarks: No Damage History.

All Logs Since New. Always Hangared. Price Reduced

Par Avion Ltd FALCONS • HAWKERS • LEARS

Cessna, Learjet, Hawker, Westwind, Falcon, Gulfstream, Global Express

Manufacturer of Select GSE & Speciality Tooling Tire Inflation Cage, Hydraulic Wheel Dolly, Lav Cart Brake Bleed Kits, O2 & N2 Single Bottle Carts, Socket Kits Mobile A/C Cart, Oxygen Fill Adapter, Jack Adapters Preowned GSE also available

www.AlberthAviation.com www.AVBUYER.com

www.paravionltd.com SALES • ACQUISITIONS • CONSULTING

Buy * Sell * Trade

832-934-0055 AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

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+1.636.751.3987

The BEST Aircraft For Sale Search anywhere, everywhere on pc, smartphone and tablet

www. www.AVBUYER.com

.com AVBUYER MAGAZINE ❘ Vol 26 Issue 8 2022 ❘

105

P106 aIRCRAFT INDEX.qxp 20/07/2022 15:09 Page 1

Aircraft For Sale • AIRCRAFT • HELICOPTERS

AIRCRAFT

PAGE

AIRCRAFT

AIRBUS

PAGE

CESSNA

A318 Elite . . . . 5, 108

Citation

A319 VIP . . . . . 5

X . . . . . . . . . . . . 69

BOEING/MCDONNELL DOUGLAS BBJ . . . . . . . . . 63 BBJ MAX8 . . . . 63 737-700 . . . . . . 8 787-9 . . . . . . . . 108 787-8 VIP . . . . . 108

BOMBARDIER Global 5000 . . . 63, 108 Global 6000 . . . 108

800XP . . . . . . . 99 900XP . . . . . . . 99 4000 . . . . . . . . 69

Phenom 100 . . 37, 51 Phenom 300 . . 99

CJ3 . . . . . . . . . 108

PIAGGO

GULFSTREAM

CJ4 . . . . . . . . . 108

P180 EVO Avanti . .107

V . . . . . . . . . . . 99, 107

RAM 421C . . . . 37

IV SP . . . . . . . . 35, 99

Sovereign . . . . 108

IV . . . . . . . . . . . 67

182T . . . . . . . . . 51

150 . . . . . . . . . 47

206H . . . . . . . . 51

280 . . . . . . . . . 69

HELICOPTERS

450 . . . . . . . . . 51, 67, 99, 108

CIRRUS Vison Jet . . . . . 37

TBM 930 . . . . . 37

EC 135P2+. . . . 41

650 . . . . . . . . . 5, 6

EC 135T2 . . . . . 99

King Air

DASSAULT FALCON 6X . . . . . . . . . . 13 7X . . . . . . . . . . 3, 13, 51, 67 2000 . . . . . . . . 45

EC 120B. . . . . . 19, XLS

600 . . . . . . . . . 67, 108

HAWKER BEECHCRAFT

604 . . . . . . . . . 8, 63, 67

900EX EASy. . . 107

550 . . . . . . . . . 5, 63, 99

650ER . . . . . . . 67

TBM 700C2 . . . 37

605 . . . . . . . . . 8, 12

AIRBUS/ EUROCOPTER

500 . . . . . . . . . 19

DAHER

Challenger

45XR . . . . . . . . 51

400XP . . . . . . . 37

Legacy 600 . . . 108

CJ2+ . . . . . . . . 108

SR20 G2. . . . . . 51

Learjet

Hawker

Legacy 500 . . . 31

CJ2 . . . . . . . . . 31

Global Express XRS. .12

PAGE

1900D . . . . . . . 19

EMBRAER

CJ . . . . . . . . . . 108

Global 8000 . . . 1

850 . . . . . . . . . 51

AIRCRAFT

2000LXS . . . . . 3, 108

XLS+ . . . . . . . . 99

Global 7500 . . . 108

350 . . . . . . . . . 108

PAGE

2000LX . . . . . . 45, 107

XLS . . . . . . . . . 23, 67

Global 6500 . . .

300 . . . . . . . . . 37, 63, 67, 108

AIRCRAFT

AGUSTAWESTLAND AW109E Power .8 AW139. . . . . . . .108

250 . . . . . . . . . 37 C90GTi . . . . . . XLS

Beechcraft

BELL 412EP . . . . . . . 99

400A . . . . . . . . 47

Advertiser’s Index 1st Source Bank .........................................29

Dassault Falcon Pre-Owned ..................2 - 3

JetBed ........................................................93

Action Aviation ............................................59

Duncan Aviation .................................23 - 24

Jetcraft Corporation.....................16 - 17, 108

AeroBuyNow...............................................19

Eagle Aviation.............................................51

JetHQ ....................................................... 47

AEROLEDS ................................................79

ELLIOTTJETS .......................................... 37

JETNET ......................................................98

Aircraft Blue Book ......................................97

Engine Assurance Program....................... 21

Jet Values .................................................105

Aradian Aviation .........................................99

Flight Safety International...........................73

More&Company..........................................95

ATP.............................................................95

Freestream Aircraft ....................................63

OGARAJETS..............................................31

Avpro .........................................................67

General Aviation Services ......................... 41

Par Avion ....................................................45

Bombardier .............................................1, 15

GE OnPoint Aviation...................................87

Pratt & Whitney.......................................... 89

BOSE..........................................................77

Global Jet Capital ......................................55

Sparfell & Partners ................................. 8 - 9

Central Business Jets ............................. 107

Global Jet Monaco ................................. 5 - 6

The Jet Business................................ 12 - 13

Concorde Battery ...................................... 75

Gogo Business Aviation..............................85

The Private Jet Company .......................... 69

C&L Aviation ...............................................57

Honeywell ...................................................83 PROUD MEMBERS OF

British Business & General Aviation Assoc. • British Helicopter Assoc.• European Business Aviation Assoc. • International Aircraft Dealers Assoc. • National Aircraft Finance Assoc. • National Business Aviation Assoc.

AvBuyer (USPS 014-911), August 2022, Vol 26 Issue No 8, is published monthly by AvBuyer Ltd, 1210 West 11th Street, Wichita, KS 67203-3517 and has a targeted circulation to decision makers within business and corporate aviation throughout the world. It is also available on Annual Subscription @ UK £40 and USA $65. POSTMASTER: Send address changes to: AvBuyer Magazine 1210 West 11th Street, Wichita, KS 672033517. Postage is paid at Wichita, KS and additional mailing offices © Copyright of AvBuyer Ltd. Every effort is made to ensure the accuracy of material published in AvBuyer Magazine. However, the publishers cannot accept responsibility for claims made by manufacturers, advertisers or contributors. The views expressed are not necessarily those of the Editor or the publishers. Although all reasonable care is taken of all material, photographs, CD & DVDs submitted, the publishers cannot accept any responsibility for damage or loss. All rights reserved. No part of AvBuyer Magazine - Advertising, Design or Editorial - may be reproduced, stored in a retrieval system, or transmitted in any other form, or by any other means, electronic, mechanical, photographic, recording or otherwise, without prior written permission of the publishers.

106 ❘ Vol 26 Issue 8 2022 ❘ AVBUYER MAGAZINE

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General Offices

Germany Office

Minneapolis / St. Paul

TEL: +49 151 15295243

TEL: +1 (952) 894-8559

E-MAIL: julian@cbjets.com

FAX: +1 (952) 894-8569 E-MAIL: INFO@CBJETS.COM Chicago TEL: +1 708 803-0004 Email: George@cbjets.com

Falcon 2000LX SN220

2018 Piaggio P180 EVO Avanti

One Owner Since New, ADS-B Out (SB302), Enhanced Navigation w/ LPV (SB301), Easy II (SB300), HUD & EVS, Synthetic Vision System (SB303), Enhanced Avionics EASy II Load 16.4 (SB322), 10 Seat Configuration, Belly Camera, Lightning Sensor System, Electronic Jepp Charts

Manufacturer’s Warranties, ADS-B Out, Electronic Charts, Maps Overlay, TCAS II 7.1, XM Satellite Weather, SBAS / LPV Capability, Anti-skid braking system, GoGo Avance L5 WIFI w/ Text & Talk

Gulfstream V SN522

Falcon 900EXy SN153

Three U.S. Owners since new (current owner since 2003), Honeywell PlaneDeck Avionics (DU-885 LCD Displays), HUD & EVS, GoGo Avance L5 WIFI, Satellite TV, Triple Laseref IV, FANS 1A/+, WAAS/LPV, ADS-B Out V.2.0

Single US Owner with over 50 Years of Falcon Jet History

Aircraft wanted: Gulfstream G280 • Falcon 2000LXS • Gulfstream G550 Falcon 7X • Falcon 2000EXy

www.cbjets.com

Jetcraft August 2022 P108.qxp_Layout 1 20/07/2022 10:42 Page 1

Your next aircraft.

Ready when you are.

With the world’s largest inventory, comprised of every major brand, Jetcraft offers unmatched aviation experience and aircraft choice. And if you’re selling trade ourselves.

Jetcraft. Worldwide aircraft sales, acquisitions and trading at the speed of life.

2008 2018 1999 2009 2007

Challenger 300 Challenger 350 Citation CJ Citation CJ2+ Citation CJ3

• 5,720 Hours; 2,239 Landings • EASA Compliant •

2018 Bombardier Challenger 350 S/N 20779 • 851 Hours; 461 Landings • •

2013 Gulfstream G450 S/N 4273 • 2,158 Hours; 783 Landings • Engines Enrolled on RRCC •

ALSO AVAILABLE 2014 Agusta AW139

2007 Airbus A318 Elite S/N 3238

2010 2014 2006 2015 2015 2018 2022 2009

Citation Sovereign Falcon 2000LXS Global 5000 Global 5000 Global 6000 Global 6000 Global 7500 Legacy 600

JETCRAFT HAS ONE OF THE LARGEST INVENTORIES IN THE INDUSTRY our full list of available aircraft.

2015 Bombardier Global 6000 S/N 9601 • 3,216 Hours; 1,217 Landings • •

2011 Cessna Citation CJ4 S/N 525C-0065 • 1,836.5 Hours; 1,478 Landings • •

2020 Gulfstream G600 S/N 73017 • 204 Hours; 77 Landings • •

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