The value attributed to most Chapter 2 aircraft lay in the eye of the operator. The majority of Chapter 2 or stage 2 aircraft are now fortunate to possess a value greater than $1 million. The number in storage only seems to rise rather than fall, even though more are being parted out. Until the last few...
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The value attributed to most Chapter 2 aircraft lay in the eye of the operator.
The majority of Chapter 2 or stage 2 aircraft are now fortunate to possess a value greater than $1 million. The number in storage only seems to rise rather than fall, even though more are being parted out. Until the last few years, a number of owners, due to tax reasons or desperation, sought to retain aircraft in the hope that a 25-30 year old example would be able to take to the skies again and eliminate past debt. Despite the extensive backlog for newer aircraft, the appetite for older aircraft continues to dwindle. Maintenance may be accomplished more readily using the most basic of tools, versus the seeming necessity of employing computer toting graduate engineers in spotless forensic science coveralls to baby more modern aircraft. Regardless, operators continue to favor the latter. The desire to acquire green credentials, and perhaps a need to reduce fuel costs and offer a reliable service for passengers, may also contribute to a decision to let the older models live out their remaining days in a museum.
The Aircraft Rating (Value Rating courtesy of The Aircraft Value Analysis Company; http://www.aircraftvalues.net) reflects the considered suitability for asset based financing over a five to seven year period. Ratings range from A++ to E--.
Chapter 2 Passenger Narrowbody Current Values - September 2006 (Values in millions of US dollars)
Aircraft
A/C Rtg
Age
Value
Trend Analysis
B727-100
E--
1965
0.1-0.3
The values of the B727 have failed to inspire for so long that values have hardly changed in recent years. The market has long since moved to newer types such that there are barely a handful of -100s left in service, the majority having been converted to freighters. The operators of the -100 that do exist are on the fringes of the commercial market such that there exists little possibility that demand will be anything more than sporadic. Values will continue to remain at scrap levels. The cost of ferrying the aircraft to a the junkyard will be higher than any value such that use for firefighting practice will be more the norm.
B727-100
E--
1971
0.1-0.3
The values of the B727 have failed to inspire for so long that values have hardly changed in recent years. The market has long since moved to newer types such that there are barely a handful of -100s left in service, the majority having been converted to freighters. The operators of the -100 that do exist are on the fringes of the commercial market such that there exists little possibility that demand will be anything more than sporadic. Values will continue to remain at scrap levels. The cost of ferrying the aircraft to a the junkyard will be higher than any value such that use for firefighting practice will be more the norm.
B727-200HADV
E-
1972
0.1-0.4
There are still perhaps over 200 -200/-200ADVs still in commercial service pointing to a reasonable attraction, at least for those in better condition. The problems of three person crews, three engines and ageing technology remain major negatives but the low capital cost, the versatility of the -200ADV in terms of range, capacity and airport performance, provide some rationale for not only retention but also acquisition. The operator base of the -200ADV is spread far and wide and the majority of operators operate only a few examples. Due to the low capital cost, the -200ADV continues to an alternative for some operators, assuming that noise and emissions are issues. Despite lower utilization, D checks do still fall due leading to the inevitability of parting out. Spending more than $1.5 million on a D check represents too much hard cash for many of the operators able to utilize the type.
B727-200HADV
E-
1978
0.2-1.0
There are still perhaps over 200 -200/-200ADVs still in commercial service pointing to a reasonable attraction, at least for those in better condition. The problems of three person crews, three engines and ageing technology remain major negatives but the low capital cost, the versatility of the -200ADV in terms of range, capacity and airport performance, provide some rationale for not only retention but also acquisition. The operator base of the -200ADV is spread far and wide and the majority of operators operate only a few examples. Due to the low capital cost, the -200ADV continues to an alternative for some operators, assuming that noise and emissions are issues. Despite lower utilization, D checks do still fall due leading to the inevitability of parting out. Spending more than $1.5 million on a D check represents too much hard cash for many of the operators able to utilize the type.
B737-200H
E--
1968
0.1-0.1
The unhushed -200 has no market relevance and values perhaps reflect the amount that the owner has to pay to dispose of the aircraft. A number of countries now charge for the disposal of cars so why not aircraft?
B737-200HADV
E
1971
0.1-0.3
With the operator base of the -200ADV still managing to exceed 300, the type continues to possess considerable market relevance. Despite a seating capacity that makes todays manufacturers have nervous palpitations, despite noise issues, despite rising maintenance costs, the -200ADV offers reasonable service to a significant number of operators. Of course, there exist just as many who wish to secure replacements if they were available and if they could be afforded. While many operators are single unit carriers, others retain double figures. However, the issues of noise and operating efficiency are powerful forces, not easily ignored. There continues to be considerable pressure to acquire newer aircraft and the number in commercial service continues to dwindle. Parting out may not yield much reward due to the large number being scrapped and a diminishing market for JT8D spares.
B737-200HADV
E
1977
0.2-0.4
With the operator base of the -200ADV still managing to exceed 300, the type continues to possess considerable market relevance. Despite a seating capacity that makes todays manufacturers have nervous palpitations, despite noise issues, despite rising maintenance costs, the -200ADV offers reasonable service to a significant number of operators. Of course, there exist just as many who wish to secure replacements if they were available and if they could be afforded. While many operators are single unit carriers, others retain double figures. However, the issues of noise and operating efficiency are powerful forces, not easily ignored. There continues to be considerable pressure to acquire newer aircraft and the number in commercial service continues to dwindle. Parting out may not yield much reward due to the large number being scrapped and a diminishing market for JT8D spares.
B737-200HADV
E
1983
0.3-1.2
With the operator base of the -200ADV still managing to exceed 300, the type continues to possess considerable market relevance. Despite a seating capacity that makes todays manufacturers have nervous palpitations, despite noise issues, despite rising maintenance costs, the -200ADV offers reasonable service to a significant number of operators. Of course, there exist just as many who wish to secure replacements if they were available and if they could be afforded. While many operators are single unit carriers, others retain double figures. However, the issues of noise and operating efficiency are powerful forces, not easily ignored. There continues to be considerable pressure to acquire newer aircraft and the number in commercial service continues to dwindle. Parting out may not yield much reward due to the large number being scrapped and a diminishing market for JT8D spares.
BAC1-11-400
E--
1966
0.1-0.1
Condition, like so many aircraft in this category, is everything.
F28-1000
E--
1968
0.1-0.1
Due to the seating capacity and MTOW of the F28, the type was able to sidestep the problems associated with Stage 2 noise compliance for a number of years. However, relative age and operating efficiency now represent more important considerations and as such the F28 is floundering. While some trading still takes place, this may be more between the owner and parting out agent rather than between airline and airlines.
F28-1000
E--
1974
0.1-0.1
Due to the seating capacity and MTOW of the F28, the type was able to sidestep the problems associated with Stage 2 noise compliance for a number of years. However, relative age and operating efficiency now represent more important considerations and as such the F28 is floundering. While some trading still takes place, this may be more between the owner and parting out agent rather than between airline and airlines.
F28-4000
E--
1976
0.1-0.2
The -4000 offered greater seating capacity and there remain nearly 80 in commercial service. Long standing operator Merpati remains wedded to the type with all other operators operating single digit fleets. The age profile is now also extending making for difficult operating condition. Placement is still possible but in the late 1990s values were in excess of $2 million. The type was to some extent less of a success than the now defunct Fokker would have wished partly because it was introduced into service relatively late.
F28-4000
E--
1980
0.1-0.2
The -4000 offered greater seating capacity and there remain nearly 80 in commercial service. Long standing operator Merpati remains wedded to the type with all other operators operating single digit fleets. The age profile is now also extending making for difficult operating condition. Placement is still possible but in the late 1990s values were in excess of $2 million. The type was to some extent less of a success than the now defunct Fokker would have wished partly because it was introduced into service relatively late.
F28-4000
E--
1986
0.1-0.3
The -4000 offered greater seating capacity and there remain nearly 80 in commercial service. Long standing operator Merpati remains wedded to the type with all other operators operating single digit fleets. The age profile is now also extending making for difficult operating condition. Placement is still possible but in the late 1990s values were in excess of $2 million. The type was to some extent less of a success than the now defunct Fokker would have wished partly because it was introduced into service relatively late.
DC9-10
E--
1968
0.1-0.1
Northwest has some -15s still listed as being in storage but these are destined for museums and other aircraft parks.
DC9-30H
E-
1967
0.1-0.2
The number of DC9s still in commercial service rivals that of the -200ADV although the fleet of 100 operated by Northwest represents nearly 50 percent of the -30s that remain in service. Values of the DC9 may have fared well in the mid to late 1990s but have since languished at near scrap levels. There remain a reasonable number of operators such that trading activity persists. There also remain over 50 non hushed examples in service demonstrating that ear defenders are also in demand.
DC9-30H
E-
1975
0.2-0.7
The number of DC9s still in commercial service rivals that of the -200ADV although the fleet of 100 operated by Northwest represents nearly 50 percent of the -30s that remain in service. Values of the DC9 may have fared well in the mid to late 1990s but have since languished at near scrap levels. There remain a reasonable number of operators such that trading activity persists. There also remain over 50 non hushed examples in service demonstrating that ear defenders are also in demand.
DC9-40
E--
1970
0.1-0.2
A fleet of nearly 50 -40s are in service albeit with only a few operators.
DC9-50
E-
1977
0.1-0.3
Over 50 -50s are also in service albeit with Northwest representing the largest operator with over 30. The type has proven to be a success for Northwest in staving off the need for fleet renewal but the fuel efficiency of the aircraft is doing the airline no favors in terms of direct operating costs. Values have been well below $1 million for many years. Even the value of the engines have lost much of their relevance.
The commentary highlights the change in fortunes since the last update of May 2006. Values are for indicative purposes and should be used for guidance only.
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