Semi-Annual Jet Aircraft Value Listing

The problems in the Eurozone, and elsewhere in the advanced economies, are continuing to affect disposal income and discretionary travel to a larger extent than perhaps during the midst of the Great Recession. Inflationary pressures associated with higher fuel and food prices are reducing the amount of cash available to households. Fortunately, low interest rates are preventing further problems except for troubled sovereign debt. The problem for airlines dependent on disposable income is likely to intensify during the next six months such that further reductions in capacity may be needed. In contrast to previous downturns, the depth and breadth of airlines is that much greater such that problems being experienced by a few airlines no longer impinges on the market as a whole. However, the difficulties of the global economy need to be taken into account in terms of any recovery of values, particularly in the context of a changing product line The need for financial institutions to be cautious in valuing assets, both for existing equipment and for new deals, has made the acquisition of used aircraft that much more difficult than previously envisaged. While sale and leasebacks, transactions between lessors, the acquisition of lease portfolios or investments in newly formed leasing companies are able to secure funding - sometimes oversubscribed - selling or buying a six year old aircraft with no attached lease remains difficult. Funding that is available is begin channeled to deals involving ECA backed transactions or Japanese Operating Leases (JOLs) which usually involve new aircraft. Lease rentals have fallen and competition among the growing number proportion of the fleet owned by leasing companies means that rates remain competitive, thereby limiting opportunities for value improvement. For narrowbody aircraft, there exists increased awareness that aircraft that may be popular today, will not be in ten years’ time. This makes it necessary for pricing of used aircraft to be conservative. The stability in new aircraft values translates into a fall for used aircraft. The Eurozone “crisis” and the need for greater capital adequacy by financial institutions has the potential to not only limit the amount of financing available for new aircraft but also place downward pressure on values. As a consequence of the recession starting 2008, the number of financial institutions able and willing to finance aircraft quickly contracted. The modest recovery in the financial markets has seen some new market entrants and others return to aircraft financing with the private equity firms also eager to take advantage of portfolios featuring relatively high lease rentals negotiated before the economic downturn. The Eurozone “crisis”, which sees the need for countries with large deficits to be bailed out by a central fund, has the potential to divert banking funds from other investment vehicles such as aircraft, particularly if such guaranteed loans carry an attractive rate of interest. However, the interest of Japanese financial institutions in leasing companies is notable. The banking community is also experiencing tighter controls on the value of their assets. The regulators are requiring financial institutions to ensure that in the event of a need to dispose of their assets, the book value is realistic. The means by which aircraft are acquired has changed over the years. The bank’s appetite for acquiring aircraft on a standalone basis, with no lease attached, has diminished in recent times just as much as operators have increasingly preferred to lease aircraft. This means that to sell an aircraft without a lease has become harder, albeit still more than possible - at the right figure. With the regulatory authorities requiring a realistic disposal figure, loan to value ratios have failed to return to pre-recession levels thus requiring a significant amount of equity. Inflating the price as a means of reducing the real equity portion of the transaction has not been possible due to the greater diligence of the regulators. Moreover, the regulators are cognizant of the potential for further weakness in the market and are requiring lenders to be more conservative in determining book values. The requirement for a more pessimistic view of realizable asset values inevitably concentrates lending on the more financially secure credits. Combined with a contraction of available funds, the ever tighter regulatory controls on the value of banks assets, the values of aircraft are coming under pressure. This means that with the weaker market conditions, values will find it more difficult to experience an increase. Specifically, any deterioration in the market will accelerate a reduction in values while any upturn will need to be more sustained and quantifiable to warrant any rise in values. An extensive backlog alone will not be adequate reason for increasing values while a temporary spike in availability may be enough to justify a reduction. The Iran situation continues to be a threat to stability. The pursuit of new aircraft is already accelerating the replacement process. New aircraft being delivered are continuing to act as mostly replacement rather than growth capacity. Operators are emerging and expanding in Asia, making up for more lack luster development in the traditional North American and European markets but on the basis of new aircraft. This focus on new aircraft is due to methods of financing, including ECA finance, as well as the availability of leased aircraft. The values of older aircraft face increasing difficulty as the countries expected to be a source of demand in the coming years face the prospect of import bans. As more new aircraft are delivered in the midst of a downturn, they are increasingly used as replacement rather than growth capacity. Such surplus aircraft need to be remarketed to other airlines. While Russian and Eastern European countries have a growing appetite for used aircraft, the aircraft at the top of their shopping lists comprise A320s and B737-800s rather than B737 Classics. There are many countries around the world that have formal and informal limits on the age of aircraft that can be imported and leased. The airlines themselves may also avoid older aircraft even if they appreciate that they may be less expensive. There should not be an expectation that if the price is low enough an operator can be found. This demand for more up to date aircraft is a consequence of a number of factors. As aircraft age they can become more unreliable and more maintenance intensive. Older aircraft may not be able to be supported so well due to limited spares. Operators around the world are all too conscious of the need to possess a good safety record for both marketing and network reasons. Airlines with a poor safety record can be banned from flying into other countries and such a record can involve an older aircraft type. This lack of demand from other countries due to age limits will only intensify in the coming years and make remarketing more difficult. Values of aircraft perhaps 15 years of age or older can therefore be expected to suffer in the coming years increasing the pressure to further reduce the assumed average of aircraft. A slower pace of economic growth will reduce the opportunity for further expansion of air travel. The world economy is only slowly emerging from the recession as the bailout of European countries demonstrates. The product life cycles of those aircraft in production is such that nearly all have been in service for a number of years. Consequently, each type has a significant number in service and a rollover in fleets is inevitable, but partially accelerated by the recession. From their peak of late 2007, most narrowbody values had fallen by more than twenty five percent though some have since recovered to some degree. The widebody sector, so dependent on premium traffic, also experienced falls but staged a limited recovery but are now falling once more. Lease rentals were starting to register a rise at the end of 2010 but such increases - apart from some widebodies - has lost some momentum more recently in the face of low interest rates and lease rentals have mostly fallen. In the five years since the peak of the third quarter of 2007, lease rentals have fallen by more than 25 percent for those aircraft in production and to an even greater degree for the many older examples that are exposed to the baking heat of the desert. The fall in rentals is partly due to the fall in interest rates. The lessors had generally managed to retain their 15-20 percent margins during the worst recession the industry has known for 30 years but these margins are now being eroded as new deals at lower rates are secured. Nonetheless, in contrast to previous downturns, the lessors have been faced with lesser calls for renegotiation of existing leases and instead have preferred to take aircraft back and lease to other carriers. This is because the market structure has experienced a significant change such that the stranglehold of the major carriers has been broken. There now exist a myriad of operators around the world for whom leasing is the only means of acquiring aircraft. Lessors are no longer dependent on a few operators. Lessees are less able to renegotiate existing agreements because lessors are able to lease elsewhere, even if subsequent rentals to other lessees have had to become more realistic. A problem for the lessors is that the maintenance of operating revenues has been at the expense of leases agreed before the recession. As these leases continue to expire, there has been little opportunity to place aircraft at the same levels with either existing or new lessees, undermining revenues. If all aircraft currently possessed by the lessors were re-leased at current market rates, the lessors would inevitably report losses rather than profits. Nonetheless, the proportion of premium grade leases will continue to be eroded during the course of the next year. The lease rentals of older aircraft are only likely to experience a sizeable recovery due to shorter terms to the less financially secure operators. Despite the use of escalation on delivered aircraft, this will likely not be reflected in values. With at best static values of new aircraft, used values will also be negatively impacted. Lessors and lessees will be seeking lesser pricing for existing aircraft types. The level of deterioration will be dependent on demand. If Airbus and Boeing have to cut production of existing types due to limited demand in the years immediately preceding service entry of the new product then a shortage will increase values of existing types. Conversely, if production of existing products is maintained by the use of purchase incentives and shortages are avoided, then values will weaken. The expected future decline in values of existing products needs to be seen in the context of prevailing forecasts. Many future value projections will have already compensated for the introduction of a re-engined aircraft. Consequently, the service entry of the new product has already been compensated. The danger lies if the existing future value forecasts for the existing B737NG is reduced still further simply as a result of investor anxiety. There will however, be some forecasts that have failed to see a reduction in future values in the coming years because of current demand and it is these that may need to be adjusted downwards. Assumptions The listing of current and future values are based on the year of build. The essential assumption is that the aircraft are being sold as a single unit and between a willing seller and willing buyer for cash. The high and low figures for October 31st 2012 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. Some transactions involving distressed sales on fully run out aircraft are considered exceptional and can fall outside the value ranges. Scrap values are also likely to fall outside the indicated range of values. Quantity discounts, particularly for the larger equipment, will attract sizeable discounts. The values quoted below were prepared in late October 2012 in the context of a modestly improving market. The values listed below are Market Values not theoretical abstract Base Values and seek to balance transaction pricing, where available, and the considered worth of the asset. The quoted future values are Market not Base values and attempt to predict cyclic trends when supply will exceed demand and vice versa. Values may therefore experience a rise as well as a fall in any projected year. In addition to values, the original source for Aircraft Ratings is included for all aircraft types. The Aircraft Ratings – the first to be created and forming the industry standard - ranging from highest A++ to the lowest E--, reflect The Aircraft Value Analysis Company’s (AVAC) opinion as to the relative attraction of the asset over the short to medium term and is determined by a number of variables ranging from product life cycles to current and projected levels of availability. The future values – four and seven years from 2012 - are expressed in current dollars having been adjusted for inflation approximating 2.4 percent and are based on the Mid Case current market values. The figures are for guidance only and are not intended to reflect actual recent market transactions - assuming that any reliable data exists. Rather the values represent the considered worth of the aircraft tempered by the prevailing market conditions. The data has been extracted from the October 31st 2012 edition of the semi-annual Aircraft Value Reference 2012-2032, priced $1,450.00 for 12 months web site access, by courtesy of The Aircraft Value Analysis Company. Telephone: +44 (0)203 468 5594, Fax: +44 (0)203 468 5596, [email protected], Internet http://www.aircraftvalues.net. www.aircraftvalues.com YEAR October 2012 FUTURE VALUE MID LOW HIGH 2016 2019 A300B4-200. Aircraft Rating: E- There are very few of the passenger versions remaining in service mostly in Iran some of which are parked. With the youngest being 30 years of age there is little wonder that there should be so few in service. 1975 0.09 0.04 0.13 - - 1977 0.23 0.10 0.33 - - 1979 0.36 0.16 0.52 - - 1981 0.49 0.22 0.71 - - 1983 0.63 0.28 0.91 - - A300F4-200 (Converted). Aircraft Rating: D- There are just under 50 in service although there are also always a number in storage. The aircraft is in service with under 20 operators and generally comprise ad hoc charter operators. The value is increasingly becoming a matter for operators rather than in terms of asset values. 1975 2.48 1.46 3.42 - - 1977 2.73 1.61 3.76 - - 1979 2.97 1.75 4.10 - - 1981 3.22 1.90 4.44 - - 1983 3.47 2.04 4.78 - - A300-600. Aircraft Rating: E+ There are very few in service with only some 22 in operation with four operators with at least seven parked. The aircraft is in the final stages of service with the engines representing at least some value. 1985 1.61 0.85 2.24 - - 1987 2.12 1.12 2.95 0.67 - 1989 2.63 1.39 3.65 1.18 - 1991 3.13 1.66 4.36 1.47 0.63 A300-600R. Aircraft Rating: D-- In contrast to the -600, the -600R still remains in service with a number of carriers but frontline operators are moving to newer types. The type may still be viewed as suitable for freight conversion but finding finance has become difficult. Though not possessing the range of the B767, the -600R made a case for medium haul transports capable of offering passengers better levels of comfort. The fleet of American aircraft continues to be a problem but older aircraft will likely be cannibalized to maintain the remainder. 1987 3.78 2.45 4.76 1.35 - 1989 4.90 3.18 6.17 2.41 - 1991 6.02 3.91 7.59 3.05 1.56 1993 7.15 4.64 9.00 3.71 2.23 1995 8.27 5.37 10.42 4.38 2.70 1997 9.39 6.10 11.83 5.08 3.20 A300-600RF. Aircraft Rating: C FedEx operates the majority of -600RFs and at least six are listed as being in storage. The market for freighters remains limited at present and as such values have again fallen by an appreciable amount. The freighter market is however very fickle and a shortage of capacity can arise within a matter of months quickly reversing any downward trend. 1994 16.43 12.65 20.05 10.61 8.20 1996 20.38 15.69 24.86 13.38 10.50 1998 24.33 18.73 29.68 16.26 12.93 2000 28.28 21.78 34.50 19.27 15.52 2002 32.23 24.82 39.32 22.45 18.34 2004 36.18 27.86 44.14 25.89 21.48 2006 40.13 30.90 48.96 29.68 25.07 A310-200. Aircraft Rating: E A good but not great aircraft in its day but that day has long since passed. The aircraft is in service with only a few operators and to all intents and purposes no asset value remains. 1982 0.82 0.49 1.09 - - 1984 1.02 0.61 1.36 - - 1986 1.22 0.73 1.63 - - 1988 1.43 0.86 1.90 0.44 - A310-300LGW. 153t. CF6. Aircraft Rating: D-- A number are in storage which makes for difficult remarketing. Values have fallen once again such is the limited appeal of the type. The operator base is relatively extensive still largely because FedEx has not cornered the market. The largest operators are PIA and Air Transat who each possess some ten percent of the market. 1985 1.39 0.82 1.78 - - 1987 2.21 1.30 2.83 0.59 - 1989 3.03 1.78 3.87 1.19 - 1991 3.84 2.27 4.92 1.78 0.77 1993 4.66 2.75 5.96 2.24 1.31 1995 5.48 3.23 7.01 2.71 1.66 1997 6.29 3.71 8.06 3.19 2.02 A319HGW. 70t. Aircraft Rating: B- The market for the A319 in terms of new aircraft is negligible and with some 20 aircraft listed as being parked due to one reason or another then the used sector also continues to suffer. The values have therefore fallen yet again and at present there seems to be no respite in prospect. The age profile of the aircraft, with the majority having been delivered in the first ten years of the program, makes for a difficult secondary market. The lower pricing and lease rentals are however, having a modest beneficial effect. 1996 12.33 9.71 13.93 7.84 5.81 1998 14.67 11.56 16.58 9.53 7.18 2000 17.02 13.41 19.23 11.29 8.64 2002 19.36 15.26 21.88 13.15 10.23 2004 21.71 17.11 24.53 15.16 11.99 2006 24.06 18.96 27.18 17.38 14.02 2008 26.40 20.81 29.84 19.55 16.13 2010En 30.84 26.52 32.69 23.05 19.60 2012En 33.95 29.20 35.99 25.41 22.35 A319ER. 75.5t. Aircraft Rating: B- The top of the range A319ERs feature lower hold fuel tanks but others may just have the plumbing. The type has the ability to fly transatlantic but the extra weight can also be used to carry a higher payload from shorter runways or hot and high locations. 2001 20.01 16.11 21.81 13.47 10.43 2003 22.39 18.02 24.40 15.45 12.16 2005 24.76 19.93 26.99 17.61 14.11 2007 27.13 21.84 29.57 19.93 16.29 2009 29.50 23.75 32.16 22.02 18.44 2011En 34.17 29.38 36.21 25.57 22.11 A320-200HGW. 77.0 tonne CFM56. Aircraft Rating: B- There are now nearly too many operators of the A320 to count. The aircraft is endemic in every region and remains a key component of the leasing portfolio. There are some 80 listed as being parked which is always a concern though there may be a number of reasons for such storage. The market for the oldest examples continues to be difficult which in turn impacts the newer. Values continue to ease downwards partly because values of new aircraft are increasing by only a marginal amount. 1990 7.43 5.28 8.99 4.27 2.27 1992 10.09 7.16 12.21 5.95 4.31 1994 12.75 9.05 15.43 7.66 5.67 1996 15.41 10.94 18.64 9.43 7.10 1998 18.07 12.83 21.86 11.27 8.60 2000 20.73 14.72 25.08 13.19 10.21 2002 23.39 16.60 28.30 15.22 11.97 2004 26.04 18.49 31.51 17.42 13.93 2006 28.70 20.38 34.73 19.86 16.18 2008 31.36 22.27 37.95 22.23 18.51 2010En 37.01 26.27 44.78 26.47 22.70 2012En 40.62 28.84 49.15 29.08 25.80 A321-100LGW. Aircraft Rating: D+ There are less than 85 -100s in service which illustrates the difficulty of the market. The largest operator is Lufthansa with 25 percent of the fleet. There are however, very few in storage and availability limited but this is only of limited significance when considering values. 1994 7.23 5.57 8.32 4.11 2.75 1996 9.07 6.99 10.44 5.29 3.65 1998 10.92 8.41 12.55 6.51 4.60 2000 12.76 9.82 14.67 7.79 5.61 2002 14.60 11.24 16.79 9.14 6.71 2004 16.44 12.66 18.91 10.6 7.93 A321-200LGW. Aircraft Rating: B-- With Hawaiian ordering 16 A321neos, the market for the type continues to expand. While the recession has adversely affected the move to larger aircraft, the type continues to enjoy demand from a variety of carriers. However, lessors can experience more difficulty in placing the aircraft given that the majority of A321 operators are able to finance their own aircraft. Values are still falling slightly due to the weaker market with at least ten being in storage. 1996 14.17 11.05 15.58 8.74 6.43 1998 17.66 13.78 19.43 11.12 8.34 2000 21.16 16.50 23.27 13.6 10.36 2002 24.66 19.23 27.12 16.22 12.56 2004 28.15 21.96 30.97 19.04 14.99 2006 31.65 24.69 34.81 22.14 17.76 2008 35.14 27.41 38.66 25.20 20.66 2010En 41.78 33.63 45.95 30.35 26.05 2012En 46.57 37.49 51.23 33.87 30.07 A330-200. Aircraft Rating: C++/B- The peak for the A330-200 has well and truly passed with the emphasis now more on the -300. There are ten listed as being in storage but some of these may be only for the short term. The aircraft remains very much a part of the mainline fleet but values are falling. With the values of the -200 having been buoyed by strong demand in recent years the readjustment to changing market conditions is perhaps now more pronounced. The Aircraft Rating has now fallen to B- for the Enhanced version. The 238 tonne version warrants a premium. 1998 38.14 31.65 40.81 24.28 16.79 2000 43.20 35.85 46.22 28.01 19.59 2002 48.25 40.05 51.63 31.97 22.66 2004 En 59.12 49.07 63.84 41.70 30.05 2006 En 66.93 55.56 72.29 48.79 35.78 2008 En 74.75 62.05 80.73 55.80 41.79 2010 En 82.57 68.54 89.18 61.98 47.64 2012En 90.39 75.03 97.62 67.88 53.94 A330-200F. Aircraft Rating: B+ The market conditions for the -200F remain weak because of the problems being experienced by the cargo sector. There are modest signs of improvement in terms of the economy but this has yet to translate into additional demand. New freighters are costly to run when yields are low, load factors are down and fuel prices are high. The freight market suffers from “shortism” due to more significant changes in traffic and directional imbalances. 2010 92.63 83.36 98.18 71.01 56.56 2012 97.91 88.11 103.78 75.07 61.80 A330-300HGW. Aircraft Rating: C / B+ An average aircraft has been turned into a good aircraft by Airbus through aggressive marketing and product improvement packages. The orders continue to be placed by operators who are struggling to secure delivery slots for the B787 or A350 anytime this decade. The increase in weights help to ensure that performance meets the demands of Asian carriers. Values are more stable than for many types. There can be no escaping that the differential between the newer and older is widening. 1996 24.89 20.66 26.88 16.31 11.69 1998 30.65 25.44 33.10 20.44 14.84 2000 36.40 30.22 39.32 24.74 18.20 2002 42.16 34.99 45.53 29.30 21.85 2004He 66.16 58.22 70.79 44.86 33.77 2006He 75.24 66.21 80.50 52.71 40.39 2008He 84.32 74.20 90.22 60.49 47.32 2010He 93.40 82.19 99.93 67.37 54.10 2012He 102.48 90.18 109.65 73.95 61.38 A340-200. Aircraft Rating: D-- In terms of asset value, the A340-200 has little relevance although it can be utilized for interim lift. 1993 10.93 8.74 11.36 6.49 4.69 1995 12.99 10.39 13.51 7.85 5.78 1997 15.05 12.04 15.66 9.26 6.92 A340-300LGW. Aircraft Rating: D-- The A340-300 is a type that continues to face pressures though four engines may not be guzzling as much fuel as might be supposed. The market for the aircraft is weak and will remain so with the prospect of part outs rather than onward sales. 1993 12.41 9.68 13.65 7.65 5.17 1995 15.54 12.12 17.09 9.76 6.71 1997 18.67 14.56 20.53 11.93 8.33 1999 21.79 17.00 23.97 14.19 10.05 2001 24.92 19.44 27.41 16.58 11.91 2003 28.05 21.88 30.85 19.12 13.95 2005 En 46.28 39.34 49.29 33.09 24.47 2007 En 51.75 43.99 55.11 38.18 28.79 A340-500LGW. Aircraft Rating: D- The ultra long haul dream proved to be pipedream in reality for all but a few operators, at least in the context of a four engined aircraft. Just as Concorde failed to have the capacity to make it economic so too has the -500 suffered from limited seats. The Aircraft Rating has fallen again. 2002 35.34 29.33 37.46 24.41 19.32 2004 42.88 35.59 45.45 30.45 24.50 2006H 62.75 53.34 65.14 44.84 36.92 2008H 73.46 62.44 76.25 53.76 45.22 A340-600L. Aircraft Rating: D++ A good aircraft that is too easily dismissed when compared to the B777-300ER. While the -600 is not suited to all routes it can be viable on selected routes where the four engines can be a positive rather than a negative – flying over mountains for example or eliminating the need for ETOPs. 2002 38.15 30.52 40.06 24.38 19.32 2004 48.30 38.64 50.72 31.73 25.57 2006 58.45 46.76 61.38 39.71 32.60 A380. Aircraft Rating: C++ The A380 continue to buck the downward trend despite having been in service for more than five years. The values of used aircraft have fallen by a modest amount while new aircraft continue to rise. Figures of $230 million seem however, to be rather high even when considering an Emirates configuration. The higher weight version is imminent. 2007 169.55 157.68 176.33 107.81 84.81 2009 186.44 173.39 193.90 120.32 96.83 2011 203.33 189.10 211.46 131.25 108.74 B717-200. Aircraft Rating: D- The values of the B717 may have experienced a significant fall in previous years but there is now a measure of stability before the values of the youngest experience “value convergence”. The B717 represents something of a bargain at these figures. 1999 5.64 4.51 6.26 3.40 2.41 2001 6.49 5.19 7.21 4.04 2.94 2003 7.34 5.88 8.15 4.71 3.53 2005 8.20 6.56 9.10 5.45 4.19 B737-300HGW EFIS. Aircraft Rating: E++ There are now more than a 100 listed as being parked which demonstrates the weakness of the market and why values continue to decline. The need to finance such aircraft from internal funds due to the absence of external financing makes it necessary to strike a hard bargain. 1985 2.10 1.28 2.71 0.48 - 1987 2.10 2.54 1.55 0.79 - 1989 2.97 1.81 3.83 1.28 0.45 1991 3.40 2.08 4.39 1.71 0.83 1993 3.84 2.34 4.95 1.98 1.28 1995 4.27 2.60 5.51 2.26 1.52 1997 4.70 2.87 6.07 2.55 1.77 1999 5.14 3.13 6.63 2.85 2.03 B737-300SF. Aircraft Rating: D++ The smaller freighters continue to enjoy demand not perhaps because of traditional mail but more as a result of the rise in internet shopping. Cross border shopping is now a feature of the market for many regions and airfreight can still be economic. 1986 4.38 3.07 5.65 2.36 - 1988 5.08 3.56 6.56 2.81 1.61 1990 5.79 4.05 7.47 3.26 2.28 1992 6.49 4.54 8.37 3.72 2.66 1994 7.19 5.04 9.28 4.20 3.06 1996 7.90 5.53 10.19 4.69 3.48 1998 8.60 6.02 11.10 5.21 3.93 B737-700HGW Wing. 153,000lbs. Aircraft Rating: B Like the A319, the -700 is facing a difficult market in terms of demand from first tier operators. There have been only a few orders for new aircraft in recent years which means that the existing fleet is of an age where replacement is becoming more likely. The CSeries is gaining credibility in this sector but the shift in market dynamics makes for a more testing market. 1997 16.07 13.34 17.84 10.13 7.59 1999 18.33 15.22 20.35 11.77 8.95 2001 20.60 17.10 22.86 13.51 10.42 2003 22.86 18.97 25.37 15.37 12.04 2005 25.12 20.85 27.89 17.41 13.88 2007 27.39 22.73 30.40 19.60 15.95 2009 29.65 24.61 32.91 21.55 17.97 2011En 33.72 29.00 36.42 24.51 21.05 B737-400HGW EFIS. Aircraft Rating: E++ With at least 50 listed as being in storage, the values of the aircraft continue to weaken. There remains demand from some sectors but this is more in the context of stop gap measures due to the absence of more modern equipment. 1988 3.05 2.16 3.78 1.30 0.44 1990 3.63 2.58 4.50 2.06 0.89 1992 4.21 2.99 5.21 2.46 1.48 1994 4.78 3.40 5.93 2.86 1.99 1996 5.36 3.81 6.65 3.28 2.34 1998 5.94 4.22 7.37 3.72 2.72 B737-800HGW Winglets. Aircraft Rating: B The -800 remains the most popular of aircraft though values have inevitably fallen. The launch of the B737MAX combined with a fully developed fleet is now putting pressure on values. Like the A320, the B737-800s that were built in the 1990s are at a disadvantage when compared those due to be delivered in 2012. 1998 19.16 15.71 21.46 13.09 9.82 2000 22.37 18.35 25.06 15.60 11.87 2002 25.59 20.98 28.66 18.25 14.09 2004 28.80 23.61 32.25 21.11 16.56 2006 32.01 26.25 35.85 24.26 19.39 2008 35.22 28.88 39.45 27.35 22.33 2010TI 41.86 36.00 46.05 32.75 27.52 2012E 46.68 40.15 51.35 36.56 31.77 B737-500HGW EFIS. Aircraft Rating: D- A good aircraft with an age profile that remains attractive to a range of operators. Again there are a large number listed as being parked which ensures competitive pricing such that values continue to fall. The type is now two generations away from the latest offerings. 1990 3.12 2.31 3.81 1.67 0.67 1992 3.66 2.71 4.47 2.02 1.16 1994 4.21 3.11 5.13 2.39 1.60 1996 4.75 3.51 5.79 2.76 1.92 1998 5.29 3.91 6.45 3.16 2.25 B737-600LGW. Aircraft Rating: D- When launched the -600 seemed a sure bet. There were a large number of -200s and -500s in service that seemingly needed to be replaced but in reality the change in market structure saw a shift upwards in capacity. Those DAC powered aircraft that have been upgraded to -7/3s or -7E however, warrant a sizeable premium. 1998 7.20 5.11 8.07 3.99 2.66 2000 9.25 6.57 10.36 5.30 3.66 2002 11.30 8.03 12.66 6.67 4.74 2004 13.35 9.48 14.96 8.13 5.92 B737-900. Aircraft Rating: D+ The -900 is not one of Boeings success stories but instead represented a stop gap measure until the -900ER could be developed. Values have experienced considerable weakness such that they are well below those of the -800. 2000 14.45 11.85 15.31 9.25 6.69 2002 16.90 13.86 17.92 11.09 8.17 2004 19.36 15.87 20.52 13.07 9.81 B737-900ER. Aircraft Rating: B- A good aircraft but not sufficiently advanced as to prevent large numbers of orders from being placed for the A321. The operator and customer base could be better. The used market has yet to be fully tested but values quoted below show only a minor premium over similar vintage -800s. 2007 35.01 29.05 37.81 26.43 21.50 2009HT 40.96 33.58 44.23 31.47 26.22 2011HT 44.84 36.77 48.43 34.48 29.60 B747-200SF. JT9D/PW4000 LGW Aircraft Rating: E- A type that fails to inspire with a weak freighter market accelerating the replacement process. The values are of little relevance and operators will probably pay cash. 1976 1.03 0.39 1.75 - - 1978 1.38 0.53 2.35 - - 1980 1.74 0.66 2.95 - - 1982 2.09 0.79 3.56 - - 1984 2.45 0.93 4.16 - - 1986 2.80 1.06 4.76 0.87 - 1988 3.16 1.20 5.37 1.39 0.47 1990 3.51 1.33 5.97 1.81 0.84 B747-300. Aircraft Rating. E-- The -300 has always been something of a marginal aircraft but values are now at scrap levels whereby the only means of disposal is via a donation. 1983 0.68 0.29 0.97 - - 1985 0.97 0.42 1.38 0.11 - 1987 1.26 0.54 1.79 0.26 - 1989 1.55 0.67 2.20 0.51 - B747-400. CF6 Aircraft Rating: D+ The Aircraft Rating has suffered as the weakness of the market continues to accelerate the replacement process. The values of the aircraft are not expected to recover even with the recovery of the market. The age of the aircraft is such that passengers may now voice disappointment when seeing the type at the end of the jetway. 1989 12.72 9.03 16.02 7.42 3.55 1991 16.84 11.96 21.22 10.00 6.61 1993 20.97 14.89 26.42 12.64 8.47 1995 25.09 17.82 31.62 15.35 10.42 1997 29.22 20.74 36.81 18.16 12.46 1999 33.34 23.67 42.01 21.08 14.64 2001 37.47 26.60 47.21 24.17 17.00 2003 41.59 29.53 52.41 27.48 19.60 B747-400D. Aircraft Rating: E- The high number of cycles makes for a shorter life span and values will continue to decline at an accelerated rate. 1991 5.73 4.19 6.65 3.25 1.63 1993 7.34 5.36 8.51 4.27 2.55 1995 8.94 6.53 10.37 5.32 3.26 B747-400F. Aircraft Rating: B- The -400F is still perhaps the freighter of choice but with a weak market then values have inevitably deteriorated further. The lower capital cost compared to the B777F is important. When the airfreight market comes back the values of the -400F may register an appreciable rise. 1993 39.61 31.69 44.36 26.77 19.25 1995 45.64 36.51 51.11 31.23 22.66 1997 51.66 41.33 57.86 35.86 26.25 1999 57.69 46.15 64.61 40.70 30.10 2001 63.71 50.97 71.35 45.82 34.27 2003 69.73 55.79 78.10 51.34 38.89 2005 75.76 60.61 84.85 57.40 44.16 2007 81.78 65.43 91.60 63.91 50.09 2009 87.81 70.25 98.34 69.65 55.85 B747-400BCF. Aircraft Rating: B- The Boeing conversion is seen as the more desirable and more will be converted when the freight market recovers. 1989 27.05 19.20 33.27 17.08 10.07 1991 31.89 22.64 39.22 20.36 14.18 1993 36.73 26.08 45.18 23.72 16.67 1995 41.57 29.51 51.13 27.19 19.27 1997 46.41 32.95 57.09 30.79 22.03 1999 51.25 36.39 63.04 34.56 24.98 2001 56.10 39.83 69.00 38.56 28.19 2003 60.94 43.27 74.95 42.88 31.75 B747-8F. Aircraft Rating: B+ The arrival of the -8F offers operators new economics and for the time being values are stable. With a recovery in the market then values may actually exhibit a rise. However, in the interim a value in excess of $200 million seems very optimistic. 2010 169.14 152.23 179.29 127.85 109.47 2012 182.28 164.05 193.21 137.80 121.93 B757-200 (RB211). Aircraft Rating: D+ The values of the B757 are falling as age and condition take their toll. The market is not as strong as in previous years and it must be expected that values will continue to decline even as the overall market improves. Were it not for the FedEx freighter program there would be a significant number on the market. 1982 3.08 2.12 3.76 - - 1984 4.12 2.84 5.03 - - 1986 5.16 3.56 6.30 2.68 - 1988 6.20 4.28 7.57 3.86 1.72 1990 7.24 5.00 8.84 4.59 2.93 1992 8.28 5.72 10.11 5.34 3.47 1994 9.33 6.43 11.38 6.11 4.04 1996 10.37 7.15 12.65 6.91 4.64 1998 11.41 7.87 13.92 7.74 5.27 2000 12.45 8.59 15.19 8.62 5.96 B757-200ER (250,000lbs RB211). Aircraft Rating: D++ The type still has a role to fulfill and values, while declining, are still reasonable in view of the age of the aircraft. The type continues to perform transatlantic services with winglets improving the efficiency. 1987 5.61 4.15 6.73 3.41 - 1989 6.67 4.93 8.00 4.14 2.28 1991 7.73 5.72 9.27 4.88 3.21 1993 8.79 6.50 10.55 5.65 3.78 1995 9.85 7.29 11.82 6.43 4.38 1997 10.91 8.07 13.09 7.25 5.01 1999 11.97 8.86 14.36 8.11 5.69 2001 13.03 9.64 15.63 9.02 6.43 B757-200SF. Aircraft Rating: C The values of the -200SF are declining by only a modest amount as the type continues to replace older B727s and other inefficient types. 1982 4.26 3.37 4.78 - - 1984 5.98 4.72 6.70 - - 1986 7.70 6.08 8.62 4.07 1988 9.41 7.43 10.54 5.93 2.78 1990 11.13 8.79 12.46 7.12 4.74 1992 12.84 10.14 14.38 8.34 5.63 1994 14.56 11.50 16.30 9.59 6.56 1996 16.27 12.85 18.22 10.88 7.53 1998 17.99 14.21 20.14 12.24 8.57 B757-300LGW. Aircraft Rating: D- A good aircraft for a very few operators. The aircraft has not been a success and represented a stretch too far for most operators. 1998 11.70 9.24 12.51 7.16 5.23 2000 13.74 10.85 14.70 8.60 6.40 2002 15.78 12.46 16.88 10.13 7.68 B767-200. Aircraft Rating: E++ The -200 provided good service for a variety of operators but that time has now passed and the values of the aircraft are at parting out levels. The -200 represented a trial for Boeing in terms of producing a widebody twin for the first time. As such the B767-300 was soon developed and some -200s were converted to -200ERs. 1981 0.69 0.35 0.85 - - 1983 1.13 0.58 1.40 - - 1985 1.57 0.80 1.95 0.39 - 1987 2.02 1.03 2.50 0.80 - 1989 2.46 1.25 3.05 1.20 0.39 1991 2.90 1.48 3.59 1.47 0.72 B767-200ER HGW. Aircraft Rating: E++ A great aircraft even if orders were relatively few and far between. The need for ETOPs compliance and a regulated market prevented further orders from being placed. But with more experience and greater freedom used examples have enjoyed some success. The values are falling but not to any great extent. 1984 4.64 2.92 5.52 - - 1986 5.21 3.28 6.20 2.10 - 1988 5.78 3.64 6.88 3.22 1.30 1990 6.35 4.00 7.56 3.60 2.09 1992 6.92 4.36 8.24 3.98 2.72 B767-300. Aircraft Rating: E+ The operator base of the -300 is particularly limited and has always been so. There is little enthusiasm for the type although conversion is still a possibility. 1986 3.44 2.20 3.99 1.27 - 1988 4.60 2.94 5.33 2.41 0.85 1990 5.75 3.68 6.67 3.10 1.64 1992 6.91 4.42 8.01 3.82 2.41 1994 8.06 5.16 9.35 4.55 2.94 1996 9.21 5.90 10.69 5.30 3.50 1998 10.37 6.64 12.03 6.09 4.09 B767-300ER LGW. Aircraft Rating: D- The values of the -300ER may be suffering but the type remains an integral part of the worlds fleet. The aircraft can be placed with a variety of operators but dispersal to second tier operators will continue as more B787s are delivered. The values of the aircraft are however a shadow of their former levels and values must be expected to fall further. 1988 8.20 6.06 9.34 4.45 2.04 1990 10.20 7.55 11.63 5.65 3.71 1992 12.20 9.03 13.91 6.87 4.60 1994 14.20 10.51 16.19 8.13 5.52 1996 16.21 11.99 18.48 9.43 6.50 1998 18.21 13.48 20.76 10.78 7.53 2000 20.21 14.96 23.04 12.20 8.65 2002 22.22 16.44 25.33 13.72 9.86 B767-300ERF. Aircraft Rating: B- A great aircraft that is able to perform a variety of operations even if intra-regional services continue to suffer from economic weakness. The placement with the small package operators is notable which does have long term residual implications. In the meantime while values have declined, they could exhibit an improvement. The values of the newest are well below previous highs. 1995 21.92 19.29 24.11 15.36 10.76 1997 25.81 22.72 28.39 18.38 13.03 1999 29.71 26.14 32.68 21.53 15.45 2001 33.61 29.57 36.97 24.85 18.06 2003 37.50 33.00 41.25 28.40 20.93 2005 41.40 36.43 45.54 32.28 24.19 2007 45.30 39.86 49.83 36.44 27.84 2009 49.19 43.29 54.11 40.19 31.43 B777-200. Aircraft Rating: D- The values of the -200 will find it increasingly difficult to remain stable as those for the -200ER decline. 1995 17.77 12.79 19.55 10.42 7.70 1997 21.77 15.68 23.95 12.99 9.75 1999 25.77 18.56 28.35 15.67 11.93 B777-200ER. Aircraft Rating: C- While the -200ER remains a solid twin engined widebody for many operators, values are increasingly reflecting age and maintenance issues. The type has seen only few orders in recent years and there will be increased emphasis on larger aircraft in the coming years. Displacement is inevitable. 1996 36.92 29.53 40.98 24.45 17.53 1998 45.45 36.36 50.45 30.61 22.20 2000 53.99 43.19 59.93 37.03 27.17 2002 62.53 50.02 69.41 43.82 32.56 2004 71.07 56.85 78.88 51.12 38.54 2006 79.60 63.68 88.36 59.16 45.38 2008 88.14 70.51 97.84 67.07 52.52 2010 96.68 77.34 107.31 73.97 59.44 B777-200LR. Aircraft Rating: B-- There are only a few routes able to make the best use of the aircraft. However, existing operators have established networks and expanding operators differing capacity requirements. Due to two engines the type is likely to remain a niche rather than marginalized aircraft, something that cannot be said of the A340-500. The limited orderbook should be noted. 2005 92.35 79.42 99.74 65.48 51.05 2007 100.34 86.30 108.37 73.37 58.27 2009 108.33 93.17 117.00 80.41 65.33 2011 116.32 100.04 125.63 86.36 72.25 B777-200LRF. Aircraft Rating: A-- The dreary freight market remains a problem for operators but with the right network the B777F can be profitable. High load factors and high utilization with the right type of cargo are key. Values are remaining stable for the time being. 2008 140.08 130.28 148.49 112.65 92.57 2010 149.73 139.25 158.72 121.04 102.05 2012 159.38 148.23 168.94 128.87 112.27 B777-300. Aircraft Rating: D- The type is already being displaced as newer more versatile aircraft are acquired. Along with the B737-900 and B757-300 the B777-300 has not been a success for Boeing or investors. 1998 33.57 25.85 36.59 22.66 16.21 2000 41.36 31.85 45.09 28.47 20.63 2002 49.16 37.85 53.58 34.59 25.41 2004 56.96 43.86 62.08 41.16 30.69 2006 64.75 49.86 70.58 48.35 36.70 B777-300ER. Aircraft Rating: B++ The aircraft remains the most attractive of assets for the short to medium term. The aircraft has proven capability and the economics that make a profit for airlines. The imminent launch of the replacement is a major problem for residuals but not for current market values. 2003 106.25 95.62 113.68 69.81 52.72 2005 118.73 106.86 127.04 80.30 61.57 2007 131.21 118.09 140.40 91.51 71.48 2009 143.70 129.33 153.76 101.72 81.29 2011 156.18 140.56 167.11 110.59 90.98 B787-8. Aircraft Rating: B+ The values of the latest -8s, post line number 62, are holding steady but not the earliest examples. The fire on a parked JAL B787 represents the latest gremlin to beset the type. While it was always considered that the first B787 examples would suffer problems the delay to service entry should have provided the opportunity to resolve many issues. 2011 103.56 97.35 109.77 77.21 66.24 Avro RJ85. Aircraft Rating: D-- A good aircraft that has sometimes been under rated. The interior has been particularly well liked by passengers due to its wide feel. Values have been falling steadily for some time and this process will continue. 1993 2.74 1.92 3.12 1.27 0.72 1995 3.16 2.21 3.60 1.52 0.92 1997 3.57 2.50 4.07 1.78 1.14 1999 3.99 2.79 4.54 2.05 1.36 2001 4.40 3.08 5.02 2.34 1.61 Avro RJ100. Aircraft Rating: D-- A good aircraft for a number of operators providing the capacity that is able to generate a profit. The aircraft is versatile but ageing and as such values are continuing to decline. 1993 2.77 1.99 3.18 1.30 0.74 1995 3.26 2.35 3.75 1.60 0.98 1997 3.75 2.70 4.32 1.90 1.23 1999 4.25 3.06 4.88 2.22 1.50 2001 4.74 3.41 5.45 2.56 1.80 Canadair CRJ200ER. Aircraft Rating: E+ There is little to be said in the defense of the CRJ200ER as the market is still beset by problems. The ability to be placed outside of the U.S. is one of the few bright spots but values continue to decline. 1996 2.37 1.59 2.93 1.22 0.62 1998 3.08 2.06 3.82 1.69 0.98 2000 3.80 2.55 4.71 2.19 1.36 2002 4.52 3.03 5.60 2.71 1.78 Canadair CRJ700ER. Aircraft Rating: C++ The 70 seater remains a part of the regional market and its demise has perhaps been exaggerated. The aircraft offers operators good economics acting as a replacement for the 50 seaters now that scope clauses are being relaxed. 2000 8.97 7.08 10.04 5.54 3.77 2002 10.66 8.42 11.94 6.78 4.73 2004 12.36 9.77 13.85 8.11 5.80 2006En 16.50 13.20 17.33 11.55 8.52 2008En 18.77 15.01 19.70 13.48 10.20 2010En 21.03 16.82 22.08 15.22 11.86 2012En 23.29 18.63 24.45 16.88 13.63 Canadair CRJ900En. Aircraft Rating: B- The capacity of the CRJ900 needs to be correctly compared with the right Embraer product but values are holding steady for the moment although more orders would be useful. 2005 17.29 14.70 18.85 11.64 8.85 2007 20.14 17.12 21.95 14.04 10.93 2009 22.99 19.54 25.06 16.30 13.03 2011 25.85 21.97 28.17 18.36 15.15 Canadair CRJ1000. Aircraft Rating: B The orderbook for the CRJ1000 may not be as extensive as might be considered desirable but the type is providing good service for operators. The type is seen as a viable leasing tool. 2010 27.13 23.88 29.85 19.94 16.29 2012 29.87 26.28 32.85 21.97 18.58 Embraer 170. Aircraft Rating: C+ The interior space of the 70-80 seater is comparable to much larger aircraft and therefore has considerable passenger appeal. The economics of the type are now well proven and values have declined by only a modest amount. 2005 15.07 12.35 16.27 10.13 7.43 2007 17.57 14.41 18.98 12.23 9.19 2009 20.08 16.46 21.69 14.22 10.99 2011 22.59 18.52 24.39 16.04 12.79 Embraer 190AR. Aircraft Rating: B++ The E190 is the most popular of the larger regional jets and values have remained stable. Even though re-engining is now being mooted this will not occur for some time thereby allowing values to remain stable. 2005 19.64 16.50 21.54 13.35 10.22 2007 22.72 19.08 24.92 15.97 12.50 2009 25.80 21.67 28.30 18.45 14.82 2011 28.88 24.26 31.68 20.69 17.14 Embraer 195AR. Aircraft Rating: B++ The capacity of the E195 is similar to that of the B737-500 so the aircraft is not necessarily so much a regional jet as a mainline jet. Orders have improved more recently which is considered a positive but the CSeries is seen a viable alternative that will further encourage Embraer to re-engine. 2006 23.33 19.60 25.43 16.21 12.58 2008 26.39 22.17 28.77 18.80 14.94 2010 29.45 24.74 32.10 21.12 17.25 2012 32.51 27.31 35.44 23.35 19.74 Fokker 100LGW. Aircraft Rating: E+ The aircraft still has its supporters and values have remained relatively steady. 1987 1.68 0.88 2.19 0.75 - 1989 1.84 0.96 2.39 0.85 0.29 1991 1.99 1.04 2.59 0.95 0.42 1993 2.15 1.12 2.79 1.06 0.50 1995 2.31 1.20 3.00 1.17 0.59 MD82. Aircraft Rating: E- A good aircraft at one time but no longer. Even the engines are difficult to place. The arrival of a freighter conversion program is considered to be positive but will do little for values of passenger aircraft. 1981 0.51 0.22 0.68 - - 1983 0.61 0.26 0.81 - - 1985 0.71 0.31 0.94 0.06 - 1987 0.81 0.35 1.07 0.18 - 1989 0.91 0.39 1.20 0.31 - 1991 1.01 0.43 1.33 0.38 - 1993 1.11 0.48 1.46 0.45 - 1995 1.21 0.52 1.59 0.52 - 1997 1.31 0.56 1.72 0.60 - MD83. Aircraft Rating: E There are a large number of MD83s in service with a variety of operators. The values though are at virtual scrap levels. The engines may be sought after but only because operators do not wish to go to the expense of overhauling. 1985 0.78 0.44 1.02 0.11 - 1987 0.95 0.53 1.24 0.27 - 1989 1.12 0.63 1.47 0.43 - 1991 1.30 0.73 1.70 0.54 - 1993 1.47 0.82 1.92 0.66 - 1995 1.55 0.87 2.04 0.72 - 1997 1.81 1.02 2.38 0.90 - 1999 1.99 1.11 2.60 1.03 - MD88. Aircraft Rating: E The attributes of the MD88 are lost on most operators. 1987 1.06 0.56 1.32 0.34 - 1989 1.22 0.64 1.52 0.50 0.07 1991 1.38 0.73 1.72 0.60 0.18 1993 1.53 0.81 1.92 0.71 0.26 1995 1.69 0.90 2.12 0.83 0.35 1997 1.85 0.98 2.32 0.95 0.45 MD90. Aircraft Rating: E++ A great aircraft that was a victim of a changing manufacturer line up and a lack of foresight. Values are a shadow of former levels. 1994 2.43 1.34 3.14 1.20 0.66 1996 2.84 1.56 3.66 1.47 0.87 1998 3.24 1.78 4.18 1.74 1.10 MD11P. Aircraft Rating: E++ The three engined configuration is now largely a curiosity for passengers as are its values. There are few in service and passengers will likely prefer the newer types. 1990 10.34 6.41 12.61 5.35 2.77 1992 11.62 7.20 14.18 6.10 4.23 1994 12.90 8.00 15.74 6.88 4.83 1996 14.18 8.79 17.30 7.68 5.46 1998 15.47 9.59 18.87 8.52 6.14 MD11SF. Aircraft Rating: C-- The problems of the freight market continue to beset the MD11 freighters such that values are continuing to decline. Even with an improvement in the market, the MD11SF may not be best placed to enable values to recover. 1990 15.42 9.72 18.66 9.64 6.43 1992 17.51 11.03 21.19 11.09 7.48 1994 19.61 12.35 23.72 12.57 8.58 1996 21.70 13.67 26.25 14.11 9.73 1998 23.79 14.99 28.78 15.72 10.96 Superjet 100. Aircraft Rating: D++ A good effort by Sukhoi. The tragic crash still hangs over the program but for the time being values are still considered relevant. 2011 20.86 17.11 23.37 14.75 11.41