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Freighter Values Gain in Run-Up to Holidays

December 13, 2004

The holiday season is traditionally a time when airfreight capacity is in short supply and operators can make considerable profits. There appears to be no difference this year. There continues to be significant demand for freighters in the run-up to the end of the year. This is translating into not only higher values for existing equipment, but also increased enthusiasm for freighter conversion. The demand for B747-400s freighters has virtually taken the excess of passenger units out of the market. Boeing is also experiencing strong demand for MD11 conversions. While the peak festive period is likely to keep some older freighters flying, such types as the DC8, B747-200SF and A300 will find the market much tougher during the course of 2005. With the price of oil having fallen, there should be some improvement in the world economy. But with oil at $40-$45 a barrel, the inferior economics of older aircraft will be exposed.

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