From: "Sean J Lancaster"

From: "Sean J Lancaster" To: "'Alan Goldman" "'Amy Lopez' Easley"' "'Brad Martin" LLC"' Gleimer E Gulbin'" Tarnow "'McLemore, Samantha"' • Redditt'" "'Tom Keitel"' ••• )t "'Lesle Pr -4 "Jeffre E Ta lor"' ••• , "'Bart Cohen"' "'Bill Houston"' "'Alex Hsu" "'Beck "'C & J Aviation Partners, "'David M. Zucchero"' "'Eileen M. , "'Jack stein"' <[email protected]>, "'Josh "'Ken Gilman"' • b. 4 , "'Pete Seidlitz" , "'Rob Zeitinger "'Royce L. Stevens"' "'Sam • "'Todd Crowle ( 1,O '" • I. 41 Subject: This months report Date: Mon, 09 May 2011 15:18:42 +0000 Attachments: BizJets_Rpt_050911.pdf; disclaim.txt ••• This month's report * Slight drop in survey score not bad given oil / Middle East: Our latest Business Jet Market Index came in at 49, down from 51 in our prior survey on relative large cabin weakness. While slightly lower, we view this result as relatively positive given higher oil and Middle East unrest. Our straight up measure of absolute business conditions moved slightly higher to 45. * Used inventories continue gradual downtrend: Available for sale business jet inventories declined by 1% in April and are now 15% below the peak from May 2009. We estimate available inventories represent 14% of the installed base of business jets, lower from the 18% peak, but still above the historical average at 12-13%. Young available aircraft inventories (0-10 years old) declined by 2% this time, and are now 24% below the 2009 peak. Average asking prices for the newer models we track declined for the fourth straight month. Flight activity bounces back: We estimate business jet cycles (takeoffs & landings) came in 4% higher from the prior year in March, a slight deceleration from 5% growth in Feb, driven entirely by a much more difficult comp as cycles increased 5% sequentially on a seasonally-adjusted basis. Including improvement in March, cycles are now 30% above the trough in early 2009, although still 16% below the peak from late 2007. * Positive on business jet recovery: We believe the recent improvement in our survey and many of the other key indicators that we monitor including increased flight activity and lower used inventories are reflective of an early stage recovery. We maintain our Buy ratings on all three of the business jet manufacturers we cover, BBD/GD/TXT. Of the suppliers, Buy-rated COL is our preferred play on business jets. Best regards, EFTA00433976 Sean J. Lancaster Bristol Associates Inc. direct ext 1130 Main Office Mobile FAX CD+I UK CELL IK-0 www.bristolassociates.com This message may contain confidential and/or legally privileged information. If you are not the intended recipient of the message. please destroy it. Any unauthorized dissemination, distribution or copying of the material in this message. and any attachments to the message, is strictly forbidden. (c) 2011 aN rights reserved. * Slight drop in survey score not bad given oil / Middle East: Our latest Business Jet Market Index came in at 49, down from 51 in our prior survey on relative large cabin weakness. While slightly lower, we view this result as relatively positive given higher oil and Middle East unrest. Our straight up measure of absolute business conditions moved slightly higher to 45. * Used inventories continue gradual downtrend: Available for sale business jet inventories declined by 1% in April and are now 15% below the peak from May 2009. We estimate available inventories represent 14% of the installed base of business jets, lower from the 18% peak, but still above the historical average at 12-13%. Young available aircraft inventories (0-10 years old) declined by 2% this time, and are now 24% below the 2009 peak. Average asking prices for the newer models we track declined for the fourth straight month. * Flight activity bounces back: We estimate business jet cycles (takeoffs & landings) came in 4% higher from the prior year in March, a slight deceleration from 5% growth in Feb, driven entirely by a much more difficult comp as cycles increased 5% sequentially on a seasonally-adjusted basis. Including improvement in March, cycles are now 30% above the trough in early 2009, although still 16% below the peak from late 2007. * Positive on business jet recovery: We believe the recent improvement in our survey and many of the other key indicators that we monitor including increased flight activity and lower used inventories are reflective of an early stage recovery. We maintain our Buy ratings on all three of the business jet manufacturers we cover, BBD/GD/TXT. Of the suppliers, Buy-rated COL is our preferred play on business jets. EFTA00433977