FOR CURRENT &
FUTURE AIRCRAFT VALUES

Widebody Values Plunge

August 17, 2020

The fall in the values of widebodies has been precipitous and significant.

While the market has experienced downturns before, the global nature of the crisis, coupled with the specific and long lasting effect on aviation, has meant that the widebodies have suffered the greatest declines. The values of widebodies will not “bounce back” to pre-Covid levels with future values failing to achieve parity Covid forecasts even in ten years time. The magnitude of the fall in values is that much greater than for the narrowbodies in some cases. The problem for the widebodies is in terms of their use primarily on international sectors where restrictions will remain in place for many months with passenger aversion to travel.

Values and Ratings courtesy of The Aircraft Value Analysis Company www.aircraftvalues.net, www.aircraftvalues.com. The Aircraft Value Analysis Rating (AVAR) reflects the considered suitability for asset based financing over a seven year period. Ratings range from the best A++ to the worst E–.

 

In Production Passenger Widebody Current Values – August 2020Values in millions of US dollars.
Aircraft AVAR Age Value Trend Analysis
A300-600R E– 1987

1993

0.4

0.9

The -600R remains in service but only just. The type has long since been usurped by newer types. For a time the aircraft seemed to be offering good economics for medium haul routes but the type was always operating in the shadow of the B767-300ER. The type did not have the range to compete with the B767-300ER but there were enough operators requiring medium haul capability – the US to South America for example or Europe to the Middle East – to facilitate the sale of a reasonable number.
A330-200 D-C– 1998

2002

2006

2008

2010

2014

2018

6.0

8.8

17.8En

21.8En

25.8En

33.8En

41.8En

The values of the A330-200 were already expected to fall by some ten percent in the twelve months from last October so the Covid Effect equates to more 28 percent than the headline fall of 36 percent. The ending of production and preference for more modern aircraft was already taking its toll on the -200. Values in the future are expected to continue to decline rather than record any recovery.
A330-300 E++(

LGW)

C

(HGW En)

1994

1998

2004

2008

2010

2012

2016

5.6

6.8

15.9En

25.1En

29.8En

34.4En

43.6En

Appraiser N registered a fall of 25 percent for values of the A330-300 since January and Appraiser H 15 percent. AVAC however, considered that since October 2019 values of the -300 had fallen by more than 35 percent or a net 30 percent due to Covid alone. The -300 was already suffering pre-Covid due to a surplus. The international sector is suffering. There was concern nearly a decade ago that the surge in orders for the A330-300 was partly due to a need to act as stop gap measure due to the delay on the B787 and that this would be an issue in the future. This has indeed been the case, greatly exacerbated by the ending of production and weak market. Too many operators have opted to replace older aircraft with newer examples over a much shorter timeframe. The values of the A330-300 will not recover any time soon.
A330-900 B- 2018 72.5 Despite being new the values of the -900 are still considered ot have declined by a reasonable amount – nearly 30 percent. As the value of new aircraft increases in the next few years this will prevent values of used aircraft from continuing to fall.
A340-200 E– 1993 1.3 The A340-200 has little to commend it and values are all but at scrap levels. The Covid event has only served to highlight the issues affecting the type.
A340-300H E

(HGW)

E

(En)

1996

1998

2002

2008

1.4

2.0

3.2

6.7En

There is little to say with respect to the A340-300 except that the type not longer has much relevance in the market.
A340-600L E+ 2002 3.3 The Covid event has accelerated the retirement of the aircraft and while there are a few in service, the type has lost virtually all of its asset value.
A350-900 B+ 2014

2018

71.6

94.8

The A350-900 is still held in high regard. Appraiser N has not seen any fall in value; Appraiser H a six percent decline and AVAC a 25 percent fall. For the values of the A350-900 not to have fallen at all or by very little suggests that there is a shortage of aircraft – an imbalance between supply and demand in favor of the latter. There are still over 100 in storage and production will likely be halved with few new orders. By any measure, there is not a shortage. Of course the -900 will act as displacement capacity but the demand will be muted on the used market for at least two years. Airbus will also be selling new aircraft at a significant discount as customers defer or even cancel orders.
A350-1000 B- 2019 113.6 The A350-100 has seen significant utility over the course of the Pandemic – an event that is still ongoing and is far from over. The issue going forward though is in terms of securing new orders given that the values of the B777-300ER are so low.
A380-800I E 2007

2009

2011

2013

2017

28.3

35.4

42.5

49.5

63.7

A disaster for the A380. Values have fallen by more than 50 percent. Accelerated retirements will ensure that there will be a surplus. Other aircraft will be used for spares so parting out values will be an irrelevance as well. The values of the A380 have been among the most impacted.
B747-400 E+ 1989

1997

2003

1.4

3.6

5.3

The Covid event has been cruel to the -400. Ever more operators have divested themselves of the type even if the price of fuel has fallen. The market will be even more limited in the future and parting out will generate lesser revenue.
B747-8I E 2011

2017

35.4

54.1

Just as values of the A380 have collapsed so too have those for the B747-8I. The aircraft already had too few operators and it remains difficult to see which operator may wish to acquire the aircraft except for occasional charter use or conversion to VVIP service.
B767-200ERH E- 1986

1990

1.0

1.2

The -200ER has been exposed to the vagaries of the market for some time and is now quietly being retired in earnest. Values have suffered in the Covid era and the value is all but what a buyer wishes to pay.
B767-300 E- 1986

1992

1998

0.7

1.2

1.7

The aircraft was always seen as being of limited appeal as demonstrated by the very limited number of customers. As a D check approaches this may the point at which the operator says enough is enough.
B767-300ERH D– 1988

1994

1998

2002

2.2

5.9

8.3

10.8

The net effect of the Covid event has been to see values of the -300ER fall by some 30 percent. Values were already falling due to the greater availability of such aircraft as the A330-300. The vast number in storage will be difficult to manage and many will come onto the market. The manufacturers will be pushing the new aircraft at low prices which will make replacement even more attractive. A great many are fitted with winglets. The 407,000lb or even the 412,000lb versions of the -300ER have of course been much more popular as the payload range is better. In terms of IFE airlines may prefer to spend $3-4 million on upgrades rather than $110 million on a new aircraft in the form of the A330-900. The lower pricing of the passenger aircraft means that freighter conversion is even more affordable.
B777-200 E- 1995

1999

2.2

3.6

The values of the -200 have been hard hit by the Covid event which is not surprising. Boeing tried hard upon launch to promote the -200 as a great aircraft that would remain a core part of the fleet given its reasonable range but this has not proved to be the case. The aircraft was always on the fringes of the market and even the values indicated below may be seen as being high. The type enjoyed the Ripple Effect for perhaps too many years but eventually the whirlpool dragged down values to a more appropriate level.
B777-200ER E+ 1996

1998

2002

2006

2010

4.3

6.2

9.8

13.4

17.1

The number of -200ERs in storage and never to return to service underscores the fall in value which has exceeded 30 percent. The values of the -200ER have been under pressure for years and double digits for a ten year old example seems optimistic particularly in view of the lack of value of the engines. The widebody sector is much more fragile than the narrowbody arena and with both Airbus and Boeing seeking to place new widebodies, the displacement of the -200ER continues apace. The weights can vary and engine type plays a significant role. There has been concern that the Trent powered aircraft may be less liquid but transactions still take place for the specific airframe/engine combination. The majority have a weight in excess of 632,000lbs.
B777-200LR E+ 2005

2011

13.1

18.6

The values of the -200LR are now not too dissimilar to those of the -200ER after initially being some $10-15 million higher. The -200LR, like the A340-500, was always likely to be a marginalized rather than niche aircraft, a fate that was not initially seen by some and which therefore led to unrealistic values for too long. The B777-200LR has bene replaced by the B787 and A350. The values of the -200LR experienced a more significant fall due to Covid than the -200ER.
B777-300 E- 1998

2002

7.2

10.4

With the problems of Cathay then the -300s that are with the operator may be vulnerable to retirement sooner than expected but it is hoped that this is not the case. The values have always been under pressure.
B777-300ER C– 2003

2005

2009

2015

26.4

34.2

49.8

73.3

The change in the values of the -300ER due to the Covid event can either be characterized as a collapse or unremarkable. Appraiser N saw a change of 19% for a ten year old aircraft while Appraiser H indicated a fall of 27 percent. AVAC indicated a net fall of 30 percent. The aircraft has enjoyed considerable success but in recent years values have been falling as it became apparent once more that there relatively few operators that can support such a large aircraft. The very operators capable of supporting the aircraft have a predilection for new aircraft. The 775,000lb version is by far the most popular weight selection and there is an Enhanced version that was introduced in late 2016. The value of a new -300ER has now dropped from the previous peak of $170 million to less than a $100 million.
B787-8 C- 2011

2015

43.1

59.3

The lack of orders and deliveries in recent years have created issues for the -8 on the used market. As such values of the -8 have been exposed due to Covid and the net decline has nudged nearly 30 percent although Appraiser N indicates an eight percent fall and Appraiser H 15 percent.
B787-9 B+ 2014

2018

70.8

92.6

The B787-9 remains the most attractive of widebody assets alongside the A350-900. But with so many still parked and the difficultly in envisaging adequate employment in the near term values have been affected by some 25 percent due to the Covid event and 28 percent as from last October. The type though is being placed back into service quickly enough. This is partly because of efficiency and because higher finance costs need to be spread over as many flights as possible to reduce the hourly cost. The values of the B787-9 are not expected to see a recovery in the near term but will remain at or near current levels for some two years.
B787-10 B– 2018 102.8 The limited number of deliveries has kept the number in storage down to a relative few. The type may be being used on shorter routes but at least this provides some utility. The values of the aircraft fell by some 25 percent due to Covid. The value trend for the type is likely to be more severe than for the -9 but not as steep as for the -8. The range of the -10 is expected to be increased in the coming years and it remains to be seen whether existing examples will be included in the upgrade.
The commentary highlights the change in fortunes since the last update of April 2020. Values are for indicative purposes and should be used for guidance only. En = Enhanced

 

THE SEARCH FOR AIRCRAFT VALUATIONS
A one-of-a-kind database filled with aircraft valuation data, including information on leasing, valuations and vital statistics, as well as Aircraft Assessment Reports.
Search an Aircraft Valuator
Error Demonstration