Sunwest Aviation Ltd.

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As we approach the mid point to 2010, we can state with cautious optimism that the recovery in the business aircraft industry is well under way. After a slow 2009 in the aircraft resale business, we have been busy in the first several months of the year with numerous transactions coming to a close. Sales activity has increased across all categories of aircraft with strong interest and activity on all listed aircraft in the first quarter. During the quarter we concluded the sale of a Hawker 800XP, acquired a 1999 Lear 45, a 2008 Citation Sovereign and added a 2009 Gulfstream G150 to our fleet. We have added a second Lear 45 to our sales inventory (see details in this issue) and a number of acquisition projects are under way. Aircraft resale dealers across North America report a marked increase in activity and the number of transactions during 2010 to date, indicating a general sense that the bottom of the market has been reached. With the exception of certain later model large cabin jets such as Global ’s, Falcon 900 ’s and G450/550 ’s, which have seen a rebound from historic price drops last year, prices generally remain stagnant as inventories of new and used aircraft are slow to reduce. Manufacturer ’s of new aircraft are still suffering as demand for new business aircraft is slow to recover and major production cuts have not been made. Canadian buyers are in an excellent position to take advantage of a high Canadian dollar and a large inventory of low priced new and used aircraft to choose from. Falling between the small and midsize cabin business jet aircraft is Bombardier ’s Lear 45 aircraft. In production since 1997 and now with over 400 aircraft produced, the 45 followed the successful twenty year production run of the popular Lear 35 model. The larger cabin offers a double club cabin with ample external baggage and an enclosed lav, a combination rarely achieved with aircraft in the small or midsize category. Excellent payload range capability allows non stop Calgary to New York range with full passenger loads. The later model Lear 45XR offers the upgraded BR engine and higher gross takeoff weight as standard. Sunwest now operates four Lear 45 ’s (three 45 ’s and one 45XR), the largest number of one jet type in the fleet. The 45 ’s combination of speed, range, comfort and operating cost make it one of our most popular charter aircraft and owners enjoy good charter revenue returns. The Lear 45 market has suffered along with all other business jet categories. There are presently 36 used aircraft listed for sale (source:AMSTAT) around the world. The chart below shows the trend in pricing for a 1999 year model Lear 45 since 2000.

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