All posts tagged 'NBAA convention'

Jurassic Jets

Are older business aircraft even sellable? And how old is OLD?

At the recent NBAA convention in Las Vegas, I sat in on several briefings about the state of aircraft sales and residual values. It was unanimous that older aircraft are not selling. No news there. It's been that way since 2008. What was interesting is the speakers' definition of "old."

I've been going with older than 15 years as "old" in terms of the ability to sell at a reasonable price within a reasonable amount of time. Age 15 also works with getting financing: The Aircraft Age + Length of Lease/Loan should not exceed 20 years. Age 15 allows for a five year financial deal. It seems like the new "old" is younger than that. And no, we can blame it on the Millennials. Blame it on the economic booms of the late 1990s and again in the mid-2000s.

An "old" business airplane is now older than age 10 in terms of maintaining a residual value and being sellable.

Glancing through the GAMA shipment database by year, business aviation saw significant increases in sales and deliveries during the past 15 years. Many manufacturers saw their sales double, peaking in delivery backlog in about 2008. Thus, there are a large number of relatively recent vintage airplanes available that are in the 5 to 15 year group, and especially aged 5 to 10.

The future air navigation systems that have been developing are in place or will be in the next decade. New or nearly new aircraft are either capable of using the full airspace, or can be easily upgraded. Older aircraft may not be so easily updated, especially older business jets that need the upper altitudes for efficient flight.

Older business aircraft, especially jets, have operating costs significantly higher than their new equivalents. A second or third overhaul on most turbine engines will be very costly due to retirement components within the engine. Unscheduled maintenance is also much higher for these older aircraft.

Lastly, emerging markets outside the US can, and do, purchase mostly new or newer aircraft. Developing nations are adopting the EASA regulations as it relates to aircraft aging issues. Some even place an age limit on imported aircraft.

So we have a large number of recently produced aircraft, many with updated avionic systems, that can be purchased for quite reasonable prices. Financial institutions have the money to lend, provided the credit is excellent. The 20 or 30-year old airplane costly to maintain, and sending them to a developing nation to sell isn't viable. These aircraft are just not selling. Let’s take a look at an example.

Jet Years produced Percent Fleet For Sale Average Days Listed For Sale
Gulfstream GIII 1979-1987 18% 828
Gulfstream GIVSP 1992-2002 13.56% 375
Gulfstream G450 2005-current 7% 239

You can buy a used GIII for under $1 million. But almost no one wants one even at that price. Newer GIVSPs and especially the G450 have a market.

One of the speakers referred to the oldest business aircraft as "Jurassic Jets." They are from a bygone era of cheap gas. They are not selling and the financial institutions do not want them on their books. From what the speakers say, and I agree, this is not going to change. Many of these aircraft are with their last owner.

Beechcraft King Air 250 to feature Hartzell 4-blade ASC-II composite prop

From Hawker Beechcraft

During the 2010 NBAA Annual Meeting & Convention last month, we came across too many updated aircraft with too few days to discuss them on here. This week we will look back on some of the developments announced during the business aviation event that were not discussed here last month.

Today we look at the Beechcraft King Air 250, unveiled on the day before the convention officially kicked off. Aviation International News reported last week that the King Air 250 will be the first turboprop aircraft to feature the composite Hartzell 4-blade ASC-II.

Hartzell says the propeller, also unveiled at the convention, reduces aircraft weight without taking away from strength or durability.

The 93-inch diameter blade is being considered for other aircraft, AIN reports, though Hartzell has yet to announce any of these formally. The blade also will fit late-model King Air 200s.

[more]The King Air 250, according to a statement from Hawker Beechcraft, also includes BLR Aerospace winglets and engine induction modifications to boost performance. It is modified from a King Air B200 GT.

The company says the aircraft will outperform all other King Air B200s on takeoff by 400 feet or more. (Sea level takeoff over a 50-foot obstacle at max gross weight is 2,111 feet, according to the statement.)

“The shorter runway capability found in the King Air 250 provides our customers access to more than 1,100 airports that were previously unavailable to them, allowing them to spend less travel time door-to-door by flying closer to their final destinations,” said Shawn Vick, an executive vice president with the company.

The King Air 250 should see its first deliveries during the second quarter of 2011, the company said.

A recap of all things NBAA 2010

Williamson Images / NBAA

We caught our breath from the 2010 NBAA Convention, and we have continued at full speed, providing the best aircraft listings and airport information for aviators anywhere online. Still, we will take a minute here to reflect and share some tidbits from the event.

This year’s convention saw a rise in the number of exhibitors from the previous year, with 1,083 turning out.

The sold-out static display featured 93 aircraft, as well as a waiting list for spots, and attendance increased more than 5 percent, totaling 24,206.

"It has been a pretty challenging couple of years for business aviation," said NBAA President Ed Bolen. "But even in this climate, the people and companies in business aviation continue to seek out effective venues for conducting business, sharing information and networking, which is why NBAA's convention remains a must-attend on the industry's calendar."


Events during the convention included recognition for those who helped bring relief to Haiti following the January earthquake, honoring five legends of flight as FAA Wright Brothers Master Pilots, and golfer-pilot Arnold Palmer received the NBAA Meritorious Service to Aviation Award.

Live and silent auctions during the convention raised more than $220,000 to support the Corporate Angel Network.

Industry news also flowed from the convention floor.

Cessna rolled out its Citation Ten (featuring the new Garmin G5000), while Piper showed off the PiperJet Altaire, Embraer highlighted its Legacy 650 and Lineage 1000, and Bombardier debuted the Global 7000 and Global 8000.

Whew, what a run! Who is already geared up for next year?

Golf legend Arnold Palmer awarded at NBAA 2010


During this week’s NBAA Annual Meeting & Convention in Atlanta, the business-aviation association presented its Meritorious Service Award to golfing legend, businessman and American icon Arnold Palmer.

The highest recognition given by the organization each year, it honors Palmer, a pilot with more than 50 years experience and multiple ratings, for his work with the group and his contributions to the industry. In the video above, mega investor Warren Buffet congratulates Palmer for his work in the NBAA No Plane, No Gain campaign.

Buffet, Palmer and astronaut Neil Armstrong have appeared as representatives for the effort, which seeks to promote the advantages of business aviation.


 “It is Arnold Palmer’s service to the industry that is the reason we are presenting him with the Meritorious Service Award today,” said NBAA President Ed Bolen during the ceremony. “Arnold Palmer has been willing to use his good name to promote business aviation at a time when we needed it most.”

Palmer said in his remarks that the day prior he flew from Orlando to Charlotte to conduct some business and returned in time to be in his Florida office by early afternoon.

 “As a young boy I dreamed of flying, and aviation has allowed me to visit places all over the world and spend extra time with my family,” Palmer said. “I wouldn’t be here today without my airplane.”

NY Times writes about NBAA 2010, ultra long-range jet market

The New York Times has weighed in on this year’s NBAA session. A story posted to its web site yesterday discusses ultra long-range jets and commercial-sized private jets, mentioning the Global 7000 and Global 8000 and Embraer’s Lineage 1000, as well as the Gulfstream G650.  

The article notes that, while the private aviation industry struggled during the past two years of economic downturn, the interest in the largest and most-expensive aircraft actually increased, and then it provides sales data to support this.

At the very highest niche, where customers can easily pay well over $40 million for a jet and more than $8 million to outfit the cabin, the business appears to be surviving the economic downturn.”

Read the full article here.

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