United States International Trade Commission

September 28, 2011

Mike Chase

Chase & Associates "Knowledge is Power"

Business Jet Aircraft Industry

Structure and Factors Affecting Competitiveness

2

The Business Jet Market

Since 1955, Business Jet manufacturers has seen a reduction in the

number of companies from 19 to 7 in 1999. This reduction has come

about as a result of both consolidation and stopped production.

No. Airframe Years

From To Comments Current Owner

1 Morane-Saulnier 1955 1967 Stopped Production of the Paris Jet None

2 Gulfstream 1958 Current Produces Large Cabin Corporate Jets General Dynamics

3 Lockheed Jetstar 1961 1980 Stopped Production of the Jetstar None

4 Rockwell 1963 1982 Stopped Production of the Sabreliner None

5 Lear 1963 Current Produces Mid & Small Cabin Corporate Jets Bombardier

6 Hawker-Siddeley 1964 1976 Produced Mid & Small Cabin Corporate Jets Raytheon

7 Dassault* 1965 Current Currently produces Large, Mid Cabin Corporate Jets Dassault

8 Messerscmitt-Bolkow-Blohm 1966 1982 Stopped Production of the Hansa Jet None

9 IAI 1969 Current Produces Mid-Cabin Corporate Jets General Dynamics

10 Piaggio 1969 1972 Stopped Production of the PD-808 None

11 Cessna 1971 Current Produces Mid & Small Cabin Corporate Jets Textron

12 Aerospatiale 1973 1981 Stopped Production of the Corvette None

13 British Aerospace 1977 1992 Produced Mid Cabin Corporate Jets Raytheon

14 Canadair 1980 Current Produces Large Cabin Corporate Jets Bombardier

15 Mitsubishi 1982 1987 Stopped Production of the Diamond None

16 Beechcraft 1985 Current Produces Small Cabin Corporate Jets Raytheon

17 Bombardier 1986 Current Produces Large, Mid & Small Cabin Corporate Jets Bombardier

18 Boeing 1998 Current Produces Bizliner Corporate Jet Boeing

19 Airbus 1999 Current Produces Bizliner Corporate Jet Airbus

* Dassault stopped producing their small-cabin aircraft in 1990

3

Business Jet Industry Consolidation

1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 1961 1958

Years

General Dynamics

Rockwell American Aero Commander

IAI

Gulfstream

Airbus

Boeing Boeing

Airbus

Dassault

Textron

Raytheon

Bombardier

Raytheon

Bombardier

Raytheon

British Aerospace

British Aerospace

Hawker Siddeley

Learjet

Mitsubishi

Bombardier

Canadair

Learjet

Dassault

Cessna

General Dynamics 1947 - 1976

General Dynamics

1986 - 1992

IAI/Galaxy

2003

Beech

NEW Business Jet Deliveries

New Business Jet Deliveries have been on a steady increase since

2003 with a new record in 2008. In 2009 declined 33.7% to 870. Again

declining in 2010 at 763 just below the peak at 784 recorded in 2001.

Source: Bus Av Wk; GAMA; Analysis and presentation by Chase & Associates

Air

craf

t D

eliv

ere

d

1313 ‘08

New Record

1964 to 2010

US Recessionary Periods

Dec. 1969 to Nov. 1970 11 months

Nov. 1973 to Mar. 1975 16 months

Jan. to July 1980 6 months

Jul. 1981 to Nov. 1982 16 months

Jul. 1990 to Mar. 1991 8 months

Mar. to Nov. 2001 8 months

Dec. 2007 to June 2009 18 months

0

200

400

600

800

1000

1200

14001964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

“ No Change Years”

Chase & Associates

"Knowledge is Power"

4

870

„09

-33.7%

784

„01

578

763

„10

Worldwide Business Jets* by Continent

In the past five years, the North America Business Jet Market has declined from January

2006 at 77% to 68% in January 2011 of the total worldwide business jets in operation

North America, Canada & Mexico

(3.7%)

2011 11,215

2006 9,344

South America (14.8%)

2011 1,029

2006 516

Africa (9.8%)

2011 386

2006 242

Europe (12.8%)

2011 2,715

2006 1,487

Asia (includes Middle East )

(16.4%)

2011 993

2006 464

Australia/Oceania (13.7%)

2011 188

2006 99

Worldwide (6.3% CAGR)

Jan. 2011 16,526

Jan. 2006 12,152

Source: JETNET/AvData Star Report – Based at; Presentation and Analysis by Chase & Associates

* In operation

wholly owned

(excludes fractional

and shared aircraft)

New versus Pre-Owned

• NEW business jet sales are driven by strong economic activity, corporate profitability, wealth creation, and business investment.

• It is important to understand that business jet markets tend to be bifurcated – purchasers tend to be either NEW aircraft buyers or Pre-Owned aircraft buyers.

JETNET >>KNOW MORE 6

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0200400600800

10001200140016001800200022002400

New Deliveries

and

Pre-owned

Sale

Transactions

Year

New

Pre-owned

New and Pre-owned Business Jet Delivery

Cycles are different……... NEW DELIVERIES AND PRE-OWNED SALE TRANSACTIONS, WORLDWIDE

Source: GAMA – New; JETNET – Pre-owned

Presentation and Analysis by Chase & Associates

763

„10

1,888

„10

2,232

„07

1,313

„08

1,479

„01

517

„03

8

Are we there yet?

How long is this going to take? The reality is the current business down cycle will last

"longer than you would like"

- But the good news is that we are on the right track.

Chase & Associates

"Knowledge is Power"

9

“Not only is Business Aviation Good For

America, It is Essential For America” An American Perspective by Dave Higdon

“The best thing about the future is that it comes only one day at a time” – Abraham Lincoln

Mike Chase

Chase & Associates

Dallas, TX Web Site: www.mdchase.aero

Cell Phone : 214-226-9882 Email: mike.chase1@verizon.net