Turboprop Values Remain Solid

Despite the sustained high price of fuel, the market structure has changed sufficiently to allow regional jets a measure of improvement, but not at the expense of the turboprop.

The turboprop continues to be held in sufficiently high regard as to generate new orders, and for the acquisition of a number of those on the used market. The revival in values is modest but discernible. There remains a need for manufacturers to continue to participate in the used market, but not to the same extent as in the past. Independent brokers are finding greater interest in used units and there can now exist more than one prospective buyer.

The last two years has demonstrated to operators that the market environment has continued to change. The need for lower unit costs has dissolved many relationships, to the point where the 50-seat regional jet has lost some of its relevance. The high price of fuel has increased the efficiency crossover point between jets and turboprops to such an extent that the use of jets can't be countenanced on some routes, whatever the benefits of fleet commonality. The market realities have prematurely dissolved restrictive scope clauses, which has prompted the selection of higher capacity turboprops and regional jets.

Demand for 50- and 70-seat turboprops has continued to outstrip regional jet orders of a similar capacity during the first half of 2006. Bombardier secured a total of 21 regional jet orders between January-June 2006, of which 20 were for the CRJ900. Embraer registered a similar 20 orders. This compares with 29 orders for the Dash8 and 47 for the ATR42/ATR72.

Assumptions

The listing of current and future market values is based on the year of build. The essential assumption, following ISTAT Market Value guidelines, is that the aircraft is being sold as a single unit and between a willing seller and willing buyer for cash. The high and low figures for June 2006 current values represent adjustments for offer and sale prices, financing arrangements, specification differences, maintenance status and condition. These are not absolutes and distressed sales as well as sale and leaseback transactions may fall outside the figures indicated.

The future market (not base) values -- three and eight years hence from June 2006 -- are expressed in current dollars, are based on the mid-case current value, and include an adjustment for inflation that varies on an annual basis. The figures are for guidance only and are not intended to reflect actual recent market transactions, assuming that any exist. Rather, the values represent the considered worth of the aircraft tempered by prevailing market conditions. A subjective aircraft rating is also indicated, reflecting the relative suitability of the type for asset based financing in prevailing market conditions and in the short to medium term. The values reflect aircraft based on a U.S. specification. European specification can command higher values, sometimes in excess of $1 million.

The figures have been extracted from the June 30, 2006 edition of the semi-annual Turboprop Volume of The Aircraft Value Reference 2006-2026, priced US$595 per annum (Turboprops). Courtesy of The Aircraft Value Analysis Company. Tel: +44 (0) 1789 730283. Fax: +44 (0) 1789 730309. E-mail: pleighton@aircraftvalues.net. Internet http://www.aircraftvalues.net).

ATR42-300. AIRCRAFT RATING: C--

The turboprop market in general is benefiting from the rise in fuel prices as operators seek lower cost equipment. This is particularly evident as operators perceive higher fuel costs as something of a long term phenomenon. However, the older turboprops are still vulnerable due to age, performance and inferior operating economics. To avoid availability becoming an issue there will be a continued need to seek other markets for the older models including freighter conversion. Values of the older ATR42s have managed to remain steady.

YEAR	June 2006 CURRENT VALUE			FUTURE VALUE
	LOW	MID	HIGH	2009	2014
1985	1.3	1.9	2.3	1.4	0.9
1987	1.7	2.4	2.9	1.8	0.9
1989	2.0	2.9	3.4	2.2	1.2
1991	2.3	3.3	4.0	2.6	1.4
1993	2.7	3.8	4.6	3.0	1.6
1995	3.0	4.3	5.2	3.4	1.9

ATR42-320. AIRCRAFT RATING: C

The -320 offers a performance improvement and the younger age profile adds to the perception of greater attraction. Though the -500 represents greater attraction it does so at a much greater price. The -320 represents something of a bargain in this context and values have also remained stable.

YEAR	June 2006 CURRENT VALUE			FUTURE VALUE
	LOW	MID	HIGH	2009	2014
1988	2.0	2.9	3.5	2.2	1.2
1990	2.3	3.3	4.1	2.6	1.4
1992	2.7	3.8	4.7	3.0	1.6
1994	3.0	4.3	5.3	3.4	1.9

ATR42-400. AIRCRAFT RATING C

Though few ATR42s were actually produced as -400s, the modest difference in specification ensures there is little chance of marginalization. The -400 is powered by PWC121A engines offering slightly better performance.

 

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1996	3.5	4.8	5.7	4.0	2.3

ATR42-500. AIRCRAFT RATING: B++

The -500 is still viewed as a desirable 50 seater though it must be said that the majority of the interest is in the ATR72. the backlog of ATR42-500 orders is only 14 although two years ago this would have represented a reasonable number. The values of the -500 are remaining steady and ATR is able to raise prices on new equipment, something that Airbus and Boeing continue to struggle with.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1995	4.9	5.8	6.9	4.6	2.6
1997	6.0	7.1	8.6	5.8	3.4
1999	7.1	8.5	10.2	7.0	4.2
2001	8.3	9.8	11.8	8.4	5.2
2003	9.4	11.2	13.4	9.9	6.3
2005	10.5	12.5	15.0	11.4	7.7

ATR72-200. AIRCRAFT RATING: C+

There is little doubt that whatever the problems associated with the 50 seat regional jet the principal focus for operators is on larger turboprops and the -2009 is benefiting. Despite the age and performance of the -200 the Aircraft Rating has increased slightly. Values have moved only so slightly and the trend is for continued stability in the short term.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1989	2.9	4.1	4.8	2.9	1.5
1991	3.4	4.7	5.5	3.4	1.8
1993	3.9	5.4	6.3	4.0	2.1
1995	4.4	6.1	7.1	4.5	2.4

ATR72-210. AIRCRAFT RATING: C++

The -210 offers improved performance allowing operators to use shorter, higher, hotter runways. The -210 represents only a marginal difference in terms of specification such that isolation is not expected. Compared to the -500, the -210 seems to represent more of a bargain.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	4.1	5.4	6.5	4.1	2.2
1994	4.7	6.2	7.5	4.8	2.6
1996	5.4	7.1	8.5	5.6	3.0
1998	6.0	7.9	9.5	6.4	3.6

ATR72-210A. AIRCRAFT RATING: B--

The slight improvement in performance is also an important consideration for the operator. The -500 has been the more preferred but in a period of shortage the -210A may have greater attraction.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	6.3	7.7	9.3	6.1	3.4

ATR72-500. AIRCRAFT RATING: A--

Both the latest offerings from ATR and Bombardier in terms of their 70+ seaters are doing well such that for the ATR72-500, the Aircraft Rating has improved to register an A--. This is a rare event for a turboprop but with fuel prices expected to remain at current levels for the foreseeable future, operators will not so easily dismiss such aircraft. In 2005 ATR recorded a total of 73 orders for the -500 but already in the first six months 46 orders have been announced. After a series of disappointing years, production is increasing to more economic levels. The type is used on a variety of sectors. Some operators are using the type on sectors involving two hours or more where previously 90 minutes was considered the acceptable limit for passenger tolerance.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1998	8.5	9.7	11.1	8.3	4.9
2000	10.2	11.7	13.4	10.3	6.2
2002	11.9	13.7	15.6	12.4	7.8
2004	13.6	15.7	17.9	14.7	9.7

Beech Starship 2000A. AIRCRAFT RATING: E++

A very attractive aircraft in terms of design but the type failed commercially. The place for the aircraft would seem to be the museum but most operators can still make use of the type. Values have already fallen by a considerable margin.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1990	0.6	0.8	1.1	0.5	0.3
1992	0.8	1.1	1.5	0.8	0.4
1994	1.1	1.4	1.9	1.1	0.5

Beech B99. AIRCRAFT RATING: E+

The 19 seat market is not benefiting to any great extent although it is noted that with the increase in gas prices, longer car journeys may lose some of their appeal, particularly given the predilection for guzzling 4*4s in the U.S. More point to point services is not to the advantage of the 19 seaters.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1969	0.04	0.07	0.12	-	-
1971	0.06	0.10	0.18	-	-
1973	0.08	0.13	0.24	-	-
1975	0.10	0.16	0.29	-	-

Beech C99. AIRCRAFT RATING: D-

The Beech C99 offered improved performance and with the erosion of capability due to higher passenger weights this is a bonus though not sufficient to justify any increase in values. The C99s remains cramped in comparison to later examples.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1981	0.13	0.20	0.29	0.12	-
1983	0.15	0.22	0.34	0.15	-
1985	0.16	0.25	0.38	0.17	0.07

Beech 1900C. AIRCRAFT RATING: D

The improvement in performance of the Beech 1900C met the needs of the US operators. The type was ideally suited to the needs of a then static market structure which facilitated hub and spoke networks from largely protected hubs. However, this market structure has undergone a fundamental change such that the 19 seaters have some of their relevance.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1983	0.3	0.4	0.6	0.3	-
1985	0.3	0.5	0.7	0.3	0.2
1987	0.4	0.6	0.9	0.4	0.2

Beech 1900C-1. AIRCRAFT RATING: D+

The Aircraft Rating has declined in line with lesser interest in the type. The better performance of the C-1 provided only an interim improvement until such time as the 1900D was able to enter the scene.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1987	0.5	0.7	1.1	0.5	0.3
1989	0.6	0.9	1.3	0.6	0.4
1991	0.6	1.0	1.5	0.7	0.4

Beech 1900D. AIRCRAFT RATING: C-

The 1900D at last began to meet the needs of the passengers as well as operators. Production has only recently ceased although this has not prevented values of the younger examples from experiencing a measure of weakness. As higher passenger weights have emerged along with demand for more point to point services, so have the 19 seaters lost much of their relevance. The emphasis is on larger aircraft.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	0.9	1.2	1.7	1.0	0.5
1994	1.2	1.7	2.4	1.4	0.7
1996	1.5	2.2	3.0	1.8	1.0
1998	1.8	2.6	3.7	2.2	1.3
2000	2.2	3.1	4.3	2.7	1.6

DHC6-300. AIRCRAFT RATING: C+

The Twin Otter seems to be just as much demand as it was a decade ago. As the aircraft ages then there are fewer quality units in existence. With the expansion of the world travel industry there is even need for such aircraft. Values remain stable as a result with quality units fetching higher prices.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1969	0.17	0.24	0.38	-	-
1971	0.22	0.32	0.51	-	-
1973	0.28	0.40	0.64	-	-
1975	0.34	0.48	0.77	-	-
1977	0.40	0.57	0.91	-	-
1979	0.42	0.61	0.97	-	-
1981	0.51	0.73	1.17	0.55	-
1983	0.57	0.81	1.3	0.62	-
1985	0.63	0.90	1.4	0.69	0.38

DHC7-100. AIRCRAFT RATING: E++

If the Dash7 was gas guzzler before fuel prices nudged $80 a barrel then the problems surrounding the type today are even more pronounced. Even STOL performance provides little solace for operators seeking to profitability. Secondary roles seem to be only solution where fuel cost is a function of lesser utilization.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1977	0.20	0.34	0.51	-	-
1979	0.26	0.43	0.65	-	-
1981	0.32	0.53	0.79	0.35	-
1983	0.17	0.62	0.93	0.42	-
1985	0.43	0.71	1.07	0.49	0.23
1987	0.48	0.81	1.21	0.56	0.27

DASH8-100. AIRCRAFT RATING: D++

The early Dash8s still have some relevance but the market has definitely moved towards the -300 and -400. Values are struggling to remain stable as a result. Alternative uses now need to be sought.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1984	1.0	1.4	2.0	1.0	-
1986	1.3	1.8	2.5	1.3	0.6
1988	1.6	2.2	3.0	1.6	0.8
1990	1.9	2.6	3.6	1.9	1.0

DASH8-100A. AIRCRAFT RATING: C--

The spread of variants can be confusing but most only signify a change in engine and MTOW. Generally the A and B versions denote improved performance while the Q series reflect improved noise attenuation and other improvements.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	2.4	3.4	4.7	2.7	1.4
1994	2.8	3.9	5.4	3.1	1.7
1996	3.2	4.4	6.1	3.5	1.9

DASH8Q-100A. AIRCRAFT RATING: C-

The Q or Quiet series denotes much improvement in terms of interior noise suppression. The Q series also saw a number of other refinements that makes it more attractive when compared to earlier variants. The absence of orders in recent years underlines the preference for larger capacity variants and as such the rating cannot be changed for the moment.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	4.1	5.7	8.0	4.6	2.6
1999	4.6	6.3	8.9	5.2	3.1
2001	5.0	7.0	9.9	5.9	3.6

DASH8-100B. AIRCRAFT RATING: D++

The B version provides slightly better performance.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	2.7	3.7	5.2	2.8	1.5
1994	3.0	4.2	5.9	3.2	1.8
1996	3.4	4.7	6.6	3.7	2.0

DASH8Q-100B. AIRCRAFT RATING: C-

Production of the -100 ended some years ago such that values have declined, a trend that has continued albeit more recently in modest terms.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	4.2	5.8	8.2	4.6	2.6
1999	4.8	6.6	9.3	5.4	3.1
2001	5.4	7.3	10.4	6.2	3.7

DASH8-200A. AIRCRAFT RATING: C-

Offering the same capacity as the -100 indicates that the -200 is just as exposed to changing market forces which have increasingly favored larger aircraft.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	2.8	3.9	5.2	3.0	1.6
1994	3.1	4.3	5.9	3.4	1.8
1996	3.4	4.8	6.5	3.8	2.1

DASH8Q-200A. AIRCRAFT RATING: C+

The Q series fits the bill for most operators but orders have elusive.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	4.3	5.9	8.0	4.7	2.7
1999	4.9	6.7	9.0	5.5	3.2
2001	5.5	7.5	10.1	6.3	3.8

DASH8-200B. AIRCRAFT RATING: C

The -200B again provides for an incremental performance improvement over the -200A.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	3.1	4.3	5.7	3.3	1.7
1994	3.5	4.8	6.5	3.7	2.0
1996	3.8	5.3	7.2	4.2	2.3

DASH8Q-200B. AIRCRAFT RATING: C++

As with the -200B, the Q-200B offers greater versatility. The -200Q managed to secure two orders in the first six months of 2006 which comes as a surprise.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	4.3	6.0	7.9	4.8	2.7
1999	5.0	6.9	9.1	5.6	3.2
2001	5.6	7.8	10.3	6.5	3.9

DASH8-300. AIRCRAFT RATING: C--

The larger Dash8 provides much more solid performance for operators offering greater capacity. Values have therefore experienced only a modest change over the course of 2006. orders now total 246 which shows only a five unit increase during the last six months.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1988	2.1	3.0	4.0	2.3	1.2
1990	2.5	3.5	4.6	2.7	1.4

DASH8-300A. AIRCRAFT RATING: B

There has been a constant demand to increase the capability of the aircraft, hence the number of designations. This hot & high variant provided a solution for operators seeking better payload/range performance.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	3.3	4.7	6.1	3.6	1.9
1994	3.9	5.5	7.2	4.3	2.4
1996	4.5	6.4	8.3	4.6	2.3

DASH8Q-300A. AIRCRAFT RATING: B-

New orders inevitably remain elusive as operators seek larger equipment. The used market is relatively strong such that placement of quality units is possible although marketing campaigns may take time to realize a sale.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	5.5	7.6	9.9	6.0	3.5
1999	6.3	8.6	11.3	7.0	4.2
2001	7.0	9.6	12.6	8.1	4.9

DASH8-300B. AIRCRAFT RATING: B--

The B series features a further improvement in engines albeit minor.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1992	3.7	4.9	6.4	3.8	2.1
1994	4.4	5.8	7.5	4.6	2.5
1996	5.0	6.7	8.7	5.3	3.0

DASH8Q-300B. AIRCRAFT RATING: B-

The backlog of -300s stands at 19 units not too dissimilar to that of the 14 of the comparable ATR42-500. The type is still seen as possessing demand from those seeking a replacement for the 50 seat regional jet with the used market sufficiently healthy as to generate interest.

	June 2006 CURRENT VALUE			FUTURE VALUE
YEAR	LOW	MID	HIGH	2009	2014
1997	5.9	7.8	10.0	6.3	3.6
1999	6.9	9.1	11.7	7.5