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Aircraft Asset Assessment – A350-900

March 14, 2022

Market Presence. As a result of the Covid Event, values of new widebodies fell by various amounts depending on the appraiser. The impact of the pandemic on international markets was the most extensive felt by the aviation industry and much more severe and longer lasting than 2001. As of December 2021, international traffic was still only 60 percent of pre-pandemic levels. Some appraisers reduced their A350 and B787-9 values down to less than $110 million while others hardly introduced any change. To some extent the market was distorted by the number of sale and leasebacks and such levels may have been used as the basis for only introducing minor changes to new values. Some appraisers may have preferred to focus on base values which remained relevant for ABS and EETC’s. For those appraisers that did reflect the collapse in international traffic, the absence of orders and the reduction in production levels, the recovery in the value of new aircraft has been a slow process but as borders are now opening up, further increases can be justified not least aided by inflationary effects on delivery prices (except that the B787 has seen a hiatus in deliveries for many months which has perhaps helped in reducing the surplus of capacity). The value of a new A350 and B787 is therefore higher at approximately $125-130 million but within two years the value will equate to pre-Covid levels. This can be said of most of passenger widebodies in production as the higher price of fuel, which represents a higher proportion of direct operating costs for longer haul operations, will force operators away from older widebodies to the new.

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