Aviation Data

Business aviation in novel coronavirus pneumonia Market From Cirium

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The following is the Business aviation in novel coronavirus pneumonia Market From Cirium recommended by recordtrend.com. And this article belongs to the classification: Aviation Data.

The novel coronavirus pneumonia business is based on the Daniel Hall, Ascend by Cirium senior valuation consultant.

The novel coronavirus pneumonia epidemic has a very wide impact on the aviation industry. Although the business aviation sector is not as good as the commercial aviation sector that has broken the record of market peak performance and achievements, it is not inexperienced for adapting to challenging situations. The global financial crisis in 2008-2009 had an unprecedented impact on the business aviation market.

New aircraft deliveries in 2020 are down year-on-year, and cirium expects them to drop by 25-30% in 2020 compared with 2019. Many factories of aircraft manufacturers (OEM manufacturers) were closed due to the epidemic, resulting in production stoppage. However, even if we only look at the data of the third quarter, there is no substantial change. It is worth noting that the delivery volume of all aircraft segments is declining. There is no doubt that it will be difficult for OEM manufacturers to receive new orders in the short term, and cirium expects prices to face some pressure. Many people said that the reduction of production will play some control role in preventing aircraft oversupply. But not after the 2008 crisis. In addition, some commentators say the backlog itself is stronger and the customers are more authentic, even though it is lower than at the beginning of the global financial crisis.

In addition to the market conditions caused by the epidemic, we have to face the election year of the United States. Many people find that this disruptive factor may delay the purchase decision and / or lead to year-end rush buying, and we may now see that owners want to make full use of the dividend depreciation Act issued by the outgoing government. The overall second-hand sales of aircraft may decline by 10-20% year-on-year, but as of mid November 2020, the final result is hard to say, and the broker community seems certain to have a busy year-end. Another difference between now and the 2008 crisis is that Aircraft Inventory for sale has not increased significantly. This is a major indicator of the impending change in aircraft value, which is why there will be little change in aircraft value until the middle of 2020.

The trend of business flight activities is gratifying. Although the overall level of business aviation business did decline at first, cirium soon found that business aviation is targeting new customers who care about health and safety and want to avoid commercial airlines or airports. It’s not easy to bring new customers into the private aviation market, and many charter or ownership aircraft providers want to keep them. The analysis shows that most business flights are actually for leisure purposes, and the traditional business aviation corridor (such as the northeast of the United States) is still far below its normal level.

The novel coronavirus pneumonia epidemic situation has a significant impact on the market value of business machines, and the stable depreciation rate and even some value increase cases are gone for ever. In the following analysis, cirium observes the market value changes recorded by ascend by cirium since mid January 2020 (after the new year changes), provides a series of percentage changes according to all construction years of the aircraft, and lists the weighted average according to the fleet size of each construction year.

Year on year changes in market value by size (fleet weighted)

From Figure 1, we can see the general situation of the change degree of each model broken down by the size of aircraft value. From the perspective of heavy aircraft, the market value of 21 of the 33 aircraft we tracked has changed; and from the perspective of fleet weighted results, the average change rate of this category is the highest (- 11%). There is also a large proportion of changes in the category of medium-sized machines (15 out of 26). However, judging from the weighted results of the fleet, the range of change is not large. Generally, there are only one or two individual models with a large decline in value, which will be explained in the following chart. Some of these models are generally considered to be niche, but a few trading points have caused great changes in their market conditions (for example, citation x + and CL850).

Changes in market value – top 20 business aircraft models most affected since January 2020

More than half of the above models belong to heavy machinery category, which will attract the attention of financiers and investors. The same data is listed below, focusing on the core models that this group may be interested in. Some models are of concern purely because of their range of variation. For example, the change of the newer global 6000 aircraft is relatively low (4-10%), but overall, the market value of the model has decreased three times since January 2020, with a 17% decrease in fleet weighting. G650 / g650er aircraft in some years have barely changed since the beginning of 2020, while in other years they have dropped by 20%. Most importantly, as long as the market value drops by more than 10-15% in the middle of the year, attention should be paid. From the perspective of various categories, the change of heavy aircraft is not surprising. Due to the continuous blockade of international borders, although the market demand for these aircraft has decreased, there are still active trading activities for many models. Therefore, it is not necessarily the change of value caused by supply and demand.

Changes in market value of heavy and medium aircraft categories – more closely related to financiers, in order of magnitude

Figure 4 shows the distribution of market value change of the whole business aircraft fleet (each vertical grid represents one model). Of the 135 models we tracked, about half of the fleet’s market value changed between January and October 2020; only one model’s weighted overall value increased. Among the models whose market value has declined, half of the models have declined by less than 10%; however, the weighted average decline of more than 20 models has reached 10-20%.

Changes in market value – entire fleet

summary

In a market with balanced supply and demand, the mid year market value of aircraft will hardly change. About half of the novel coronavirus pneumonia cases in the Cirium tracking aircraft market are affected by the market situation of new crown pneumonia, although the stock has not increased significantly or significantly, but the value of the aircraft has changed.

Perhaps worryingly, there is no clear indicator of when the value of aircraft will bottom or whether it will pick up in the short term.

Based on experience gained in previous recessions, aircraft values are unlikely to return to pre recession levels.

The pricing and value of newly built aircraft is an area that has not changed much so far. This may change as OEM manufacturers are under pressure to backlog orders.

Despite the exciting new entrants attracted by charter and aircraft property rights sharing, the value of the medium-sized aircraft category has declined significantly.

The surplus (base) value has not changed basically, but cirium is still paying close attention to it.

More reading: China: novel coronavirus pneumonia: the impact of the new crown pneumonia epidemic on business aviation: Cirium: COVID-19’s April air passenger market demand and supply situation analysis, Cirium:2020 aviation insight trend report Cirium: 2019-2038 years, China Airlines will buy 19%Cirium for the production of the flying aircraft: it is predicted that air demand will resume until the 2024-2025 year of air travel is completed in 2024-2025 years. m China’s novel coronavirus pneumonia novel coronavirus pneumonia report novel coronavirus pneumonia novel coronavirus pneumonia: 2020 Shanghai Jiaotong University: impact of new crown pneumonia on some industries. Columbia University: intervention time on the new crown pneumonia epidemic in the United States: different effects of the new era of crown pneumonia: 2020 new crown pneumonia epidemic research report on China office market (download) Think tank China novel coronavirus pneumonia: novel coronavirus pneumonia decide on what path to follow? 2020 Novel coronavirus pneumonia survey: novel coronavirus pneumonia consumer survey novel coronavirus pneumonia: new assessment of potential economic impact of new crown pneumonia epidemic TrendForce: March, the latest analysis of the impact of the new crown pneumonia epidemic on the global high-tech industry

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