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January 30, 2012
A320neo List Prices Jump More Than 6 Percent The Airbus list prices for 2012 have again exhibited a significant increase, averaging 4.6 percent, inflated by the rise in A320neo family pricing. The above table indicates Airbus list prices between 2008 and 2012 together with the estimated new value as quoted by The Aircraft Value Analysis Company (www.aircraftvalues.net). The A320neo family values reflect a...
January 30, 2012
The values of the B737-400 have continued to deteriorate in recent years as the type is withdrawn from service by mainline carriers in favor of such aircraft as the A320 and B737-800. Over the period 2004-2007 rentals of the B737-400 had been improving but since then have experienced significant declines. However, even though the -400 lacks the payload/range performance of the A319/A320 and...
January 30, 2012
After experiencing a period of heightened enthusiasm from operators, resulting in a recovery in values and lease rentals, the realities associated with an advancing product life cycle are having a detrimental effect on the same values and lease rentals. In the run up to the peak of the market in the third quarter of 2007 lease rentals of the B767-300ER had enjoyed a significant improvement over the lows...
January 30, 2012
The values of the B747-400 are continuing to decline in the face of weaker international demand and the significant number of deliveries of new aircraft. While the B747-400 continues to be used on a great many international routes, operators are increasingly finding that the type no longer meets its needs. The interiors of the B747-400 may still offer considerable space but operators are finding that the...
January 30, 2012
The Eurozone “crisis” and the need for greater capital adequacy by financial institutions has the potential to not only limit the amount of financing available for new aircraft but also place downward pressure on values. As a consequence of the recession starting 2008, the number of financial institutions able and willing to finance aircraft quickly contracted. The modest recovery in the financial...
January 30, 2012
The recent recovery in lease rentals from the depths of the Great Recession seems to have passed a peak as lease rentals on the mainstream narrowbodies continue to edge down slightly. The reason for lower rentals stems from the reconnection of the aviation industry to the wider economic malaise. In the first nine months of 2011, the relative buoyancy of the airline industry in terms of new orders...
January 30, 2012
The widebody market is facing more uncertainty due to the concern over whether the high yielding passenger will continue to fly with such frequency. While the economy passenger may pay the fuel and flight crew salaries for the long haul operator, it is the business class passenger who pays for the financing of the aircraft and the profit. Flying just economy passengers usually results in a loss. While the...
January 16, 2012
Placing a value on an aircraft suggests that the unit has attraction to other entities than the current owner or operator. Unfortunately the older aircraft are generally held in high regard only by their existing operators and are therefore not suitable for asset based financing. Seeking to sell the aircraft for cash was already proving to be more difficult and the credit crunch has only exaggerated the...
January 16, 2012
The use of twin engined widebodies on longer sectors has traditionally been hampered the necessary restrictions imposed by the time required to divert to an airfield in the event of an engine failure but the introduction of a new 330 minute limit for the B777-300ER means that the type can fly virtually unrestricted. The limit for ETOPs equipped aircraft was set at 180 minutes for many years but this was...
January 16, 2012
More than ever the cost of the interior is representing a greater proportion of the initial purchase price and causing problems for the remarketing of used aircraft. The cost of an average interior encompassing the Buyer Furnished Equipment (BFE) for a B777-300ER approximates $14 million including overhead crew rest areas. For a more sophisticated interior this can increase to more than $16 million. At $16...
January 16, 2012
The offering of two engine manufacturers on the A320neo inevitably raises the question of whether one or the other airframe/engine combination should exhibit a higher value. The competition between the CFM56 Leap 1A and the Pratt & Whitney PW1100G is inevitably fierce both in technical and commercial terms. The determination of whether one powerplant justifies a premium over the other is not purely a...
January 16, 2012
The market for freighters continues to be volatile with some operators acquiring additional capacity while others are suspending operations. The suspension of services by Jade Cargo in December underlines the negatives facing the air cargo industry. Jade Cargo is co-owned by Air China and Lufthansa both of which have their own cargo entities. Air China acquired part control of Jade Cargo as a result of the...
January 16, 2012
The leasing of three A340-300s for six years demonstrates that the market may be restricted but is still clearly viable. The three ex Cathay 1996 aircraft were leased to Aerolineas Argentinas by ICON Capital. The first aircraft, serial number 123, was delivered in December 2011 with the second (126) due in January and the third (128) in the near future. The 1996 vintage of the aircraft places nearly at the...
January 16, 2012
The net price actually being paid for new aircraft is usually a closely guarded secret but the Request for Proposals by Air India for the long term financing of seven B787-8s and two associated engines has been revealed. The Request for Proposal for the financing of the aircraft was initially issued in July 2011 and sought a total of US$832.269 million in financing. The RFP details were posted on the...
January 16, 2012
The weakness of the wider market means that the values of the majority passenger aircraft are actually falling but this is not the case for the B777-300ER. Despite the many adverse pressures affecting the market, the -300ER has established itself as the most desirable of widebodies, aided of course by the high price of fuel. B777-300ER Vital Statistics LAUNCH 03/2000 STANDARD MTOW 750,000lbs LIST PRICE...
December 5, 2011
The values of the A300-600R are facing the same fate as the A300-600 as operators move increasingly to newer types. The A300-600R, at least as a passenger aircraft has not been manufactured for nearly a decade, with the last freighter being delivered in 2007. The values of the -600R failed to register any improvement in the year before the Great Recession of 2008 despite the B767-300ER seeing such a rise...
December 5, 2011
Options on new and used aircraft can serve to increase the overall value of aircraft but the simple application of list prices may cause the final value to be inflated. The manufacturers have increasingly included previously optional items as standard on aircraft but there remain a myriad of options that airlines select when ordering aircraft. Such optional equipment can include additional avionics and...
December 5, 2011
The seeming delay to the development of an A330 conversion program by Airbus is understandable in the context of strong demand for the type and associated high values of passenger aircraft but such a modification would likely aid values in the medium term by constraining levels of availability. With demand for used A330s still strong, the appetite for the development of the A330 and A340 is still viewed...
December 5, 2011
The Dubai air show has become nearly as much a forum for the placement of new orders as Paris or Farnborough and the venue has clearly demonstrated the preference for newer equipment at a time when older types continue to be parted out. The Dubai air show saw a massive investment from Emirates with respect to the B777-300ER with an order for 50 units. The current value of a new B777-300ER approximates $155...
December 5, 2011
The widebody sector is beginning to show signs of connection with the wider economic malaise which results in part from the lack of decision action from the leaders of the Eurozone. The lease rentals of most widebodies previously managed to improve over the course of the last eighteen months largely as a consequence of an improvement in the world economy, expansion of services, and increase in yields...
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