Here is a story we did last week for Commercial Aviation Online:
BOC Aviation and Airbus announced 3 November an order for 30 A320s, with the companies touting the “investment value” and residual value in a press release detailing the orders.
“The announcement from BOC Aviation is another vote of confidence in the long-term appeal of the A320 Family. It works well for the financial community based on its wide operator base, proven operating economics and strong residual values,” said John Leahy, Chief Operating Officer Customers, Airbus, is the press release.
“A320 Family aircraft are a good fit as they have proven economics and meet both our investment targets and our customers’ operating goals,” said BOC Aviation CEO Robert Martin in the press release.
The residual value of the A320 family has come under doubts from lessors, appraisers, airlines and financiers in response to the possibility that Airbus will proceed with the New Engine Option for the A320. Some lessors, notably AerCap and Aviation Capital Group, have publicly expressed concerns about the residual value impact of the A320 NEO on the A320 current generation (A320CG); AerCap early this year said it would not order more A320s until Airbus made a decision on NEO. AerCap has been an exclusive Airbus customer when it comes to new airplane orders.
BOC Aviation is only the third lessor to order A320s this year: GECAS and the new company, Air Lease Corp., announced orders at the Farnborough Air Show.
Airbus has previously argued that residual values of the A320CG won’t be affected because of the huge backlog of nearly 2,300 and an installed base of more than 4,400. Leahy has previously said that until deliveries of the A320NEO pass the 50% mark of the installed based-which will be increasing between now and that point in any event-residual values won’t drop.
The industry is skeptical.
Airbus said the subhead of the press release, “Lessor confident of investment value,” was added at the request of BOC Aviation.
“We have often in the past mentioned investment and residual value of aircraft with orders from leasing companies,” said Sean Lee, a spokesman. “These are key considerations for lessors when they order aircraft. Nothing to do with NEO, which would be offered as an option to existing versions anyway.
“By placing the order BOC is obviously very confident in ongoing market for those existing versions,” Lee said.