Youngest used drop 4% sequentially, 25% YOY. Available for sale business jet inventories were 7% lower y/y in August (-2% sequentially), and now represent 10.3% of the installed base, the lowest since before the financial crisis. Inventories of 0-5 year old were 4% lower in August (-25% y/y) at 5% of installed base (mid-range best at 4%), with 6-10 year old inventories also 4% Lower (-10% y/y) at 10% of installed base (long best/mid-range worst). We believe young used inventories as approaching healthy levels, which we estimate at <5% for 0-5 year and <10% for 6-10 year. Retirements low at <1% of the installed base.

Bombardier/Gulfstream 4% of 0-5 fleet available for sale Of young aircraft (0-10 yrs. old), inventory levels are lowest for Bombardier/Gulfstream at 6% (4% for 0-5 yrs. old). N America continues to look best with only 7% of young fleet available, while Europe is highest at 10%. Among young aircraft, small & large cabin 0-5 year old inventories have declined to roughly 6% of installed base, with mid down to 4%. Among large cabin, pricing appears to have stabilized for G550/G650/G650ER (Figure 2).COL/GD to benefit from improve in fundamentals Business jet fundamentals, including used inventories and pricing along with utilization, appear to be modestly improving. Both COL (Neutral rated) and GD (Buy rated) should benefit from accelerating defense growth and offer significant leverage to business jet improvement.