NLETTER-1101 - Page: 6 of 13

MARKET OVERVIEW
As all of us struggle to resume our lives in a more normal mode, we at Aeroprice have been struggling to assess the effect of the WTC attacks (and
subsequent FAA actions) on the current aircraft market. We are pleased to announce we have finally completed that task. Before we get to the actual
numbers, here's some of the changes we noticed during the last month that have had a direct effect on the market.
First, with a few notable exceptions, there is NOT any panic selling amongst owners. A comparison of newly listed aircraft for sale during the two weeks
prior to WTC and the two weeks afterward showed approximately 30% fewer aircraft being listed. In addition, a large number of aircraft previously offered
were removed from the market: the net result being there are now substantially fewer aircraft for sale today than prior to 9/11.
There are also fewer buyers, but they're much more serious. Aircraft dealers tell us that while they're receiving fewer calls, the ones they do get result in a
sale more often. Our aircraft lending sources tell us that both loan inquiries and loan closings are down about 40%, but they're getting more loan applications
for corporate type aircraft (King Air, Citations, etc.) than usual.
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MARKET CHANGES
Over all, the value of many planes has decreased, but with a few exceptions the drop was not dramatic. Lest we associate this decline entirely with recent
events, we need to remember that aircraft values are also influenced by the overall economy (which was not doing very well before Sept. 11th.), as well as AD notes and other factors.
In general, aircraft used primarily for recreation lost the most value while those used for serious IFR and cross country remained fairly steady. With an ased interest in Part 135 ops (i.e. charters), some planes have shown appreciation. Many aircraft values remained relatively unchanged (defined as +/-
2%), remarkable in itself under the circumstances.
We feel it is still a buyers' market, with many aircraft offered, and sold, for the lowest prices in years.
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BEECHCRAFT MODELS 33, 33A, 35 and 36
While all of the Beech single retracts had been slowly losing ground in previous quarters, the entire group stopped sliding downward, and maintained their
current values within 2%.
================================================ CESSNA 150/152
The 152 is, of course, the world's most popular flight training plane. With many flight schools having been closed for weeks, we can expect a number of permanent closures, and many of these planes will appear on the market. This has already started, and we're seeing a full 10% decline in asking prices for
152's, and consequently for 150's. While this may appear dramatic, it amounts to about -$1,500 for average 150, and $2,500 off of a 152. (In an interesting
financial note, one bank actually instructed their aviation finance division to not even consider any loan that involved a flight school aircraft.)
It should be noted that while both of these 2 place planes normally experience a seasonal decline in value, this years drop is roughly double the average for this time of year.

CESSNA 172
One of the VFR casualties, Skyhawk values declined 5% for most, but 7% for the very latest models.
================================================ CESSNA 177 Cardinal (FG)
While Cardinal values were down 3%, this was a decline we had expected anyway.
================================================ CESSNA 177RG
Retractable Cardinal values remained unchanged for the quarter.
================================================ CESSNA 182
182's experienced a minor 3% decline for this quarter, but have not been doing well for the last 3. The current value of a typical Skylane is about the same as it was a year ago.
================================================ CESSNA 182RG
After reaching astronomical values in January of this year, the price bubble on 182RG's had already burst in July. Values continued to drop over 7%, and are now at the lowest levels since spring of 2000. In our opinion, they are currently way undervalue and we'd recommend one as a good buy today!