Market Presence. The deterioration in used A380 values has already been significant partly because of the fall in the value of a new A380 but more specifically due to the Covid Event. To a large extent, there has already been some readjustment to residual values because of the slowdown in production and continued speculation as to the future of the A380 although there was a hope that re-engining would revitalize the program. There has been much speculation that the proceeds from the scrapping of the first two A380s generated some $80 million but this represented the exception rather than norm as such revenue is being generated by the lease of the engines, something which cannot now be relied upon. The issue of value convergence is a major concern as the values of the youngest converge on the oldest. This is because of the perception that operators are not willing to pay a sizeable premium for a younger aircraft that has the same economics, reliability and maintenance costs of an older example. The greater value attributed to the year of build loses its significance once production ceases. Because of the reduction in order tally and the limited number that are in service as of production cessation, the imposition of a sizeable discount needed to be immediate. The values of the A380 had been experiencing an accelerated decline in recent years such that the annual decline has been far greater than the average of 7-8 percent.
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