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Thursday, June 25, 2009

Emerging Aircraft Value Trends Topic of AT Webinar; Overnight News

Kathryn B. Creedy

The impact of the current economy on aircraft valuations will be discussed in depth during Monday’s Aviation Today webinar – Aircraft Valuations in 2009: Making Sense of a Turbulent Year. Set for 11 am, the webinar’s key focus will be on the way forward as the economy forces massive fleet strategy changes while facing a loosening credit market in which new capital companies are emerging. Related Story

While industry experts suggest that – just maybe – the impact of the economy may be bottoming out as we head into the second half, it remains unclear what the long-term impact will be on aircraft values. Webinar experts, including Kostya Zolotusky, managing director, Capital Markets Development - Aircraft Financial Services Boeing Capital Corporation; Chris Baur, president, Consulting and Technical Services Hughes Aerospace; and Aircraft Value Analysis Co CEO Paul Leighton, who is also editor-in-chief of Aviation Today’s Aircraft Value News indicate there are still plenty of opportunities to make money. The program will be moderated by Aviation Today Publisher John Persinos.

Topics include the severity of the impact on values as well as how the woes of International Lease Finance Corporation (ILFC) affect access to capital and aircraft values. Of particular interest is the impact on depressed pricing for new aircraft. With fuel prices edging upward, discussions will center on whether older aircraft can still be salvaged for productive use. Other topics will focus on environmental issues and funding sources as well as possible consolidation among lessors as new capital sources spring up. Experts will question whether low-cost carriers will be able to absorb the aircraft they have on order and what wide bodies will retain value over the next decade. More importantly, they will discuss how the trend toward smaller aircraft, such as United’s pending requirements, will have on the long-term prospects for new wide bodies. Also up for grabs is the next generation narrow-bodies that manufacturers say won’t happen until late in the next decade if not after. That will be balanced by considerations of moves by other manufacturers including Superjet International and Bombardier.

The webinar will be the springboard for Aviation Today’s first aviation conference set for London on September 8 and 9 Understanding Aircraft Values in a New World Order. The conference seeks to establish whether we have sufficient appreciation of what lies ahead given the emergence of a new world order.

With no region immune from the economic recession and the growth of developing nations, the old and new world powerhouses of aviation will convene to map out strategies for coping now and being successful in the future. The contraction of fleets, as well as the ability of carriers that once relied on the West’s hand-me-down aircraft to finance new airliners, are racing toward a major conflict that will determine the future value of all aircraft from regional jets and to advanced wide bodies. These new challenges to values along with the impact of environmental concerns and rising fuel prices will contribute to clarifying the fundamentals of what drives aircraft values, and how they are used.

Finally, as part of its value-added content offerings Aviation Today has posted a free white paper on the subject – Assessment of Aircraft Values - Current Market Conditions versus Historical Trends – on its site.

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