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Semi-Annual Jet Aircraft Value Listing

July 27, 2015

The fragile state of the world economy, the reduction in inflation and interest rate forecasts and the contest between OPEC and shale oil producers is beginning to have an effect on current and residual values and lease rentals of younger and new aircraft. The last few years has seen an element of disconnect between weak global economic conditions and the significant annual intake of orders for new aircraft. Older aircraft have been increasingly parted out and lease rentals for such aircraft eroded but record levels of new aircraft have been delivered. More recently, the lesser demand for oil due to a still weak global economy – notably China - combined with a tussle between traditional oil producers and new shale based entities has led to a significant fall in oil and jet fuel prices during the course of 2014. February 2014 saw the price of jet fuel exceed $3.00 a gallon; by late October 2014 this had fallen to $2.40 a gallon with further falls to $1.50 a gallon as of 2015. Iran may start to increase production of oil should an agreement be reached on nuclear research which may continue to depress oil prices. The shale producers are also seeking to reduce the cost of extracting oil.

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