Special to Leeham News and Comment
By Gueric Dechavanne
Feb. 8, 2015: Apart from a few unfortunate events, the industry has been moving along quite nicely so far in 2015. Used single-aisle aircraft values and lease rates have remained somewhat stable for the most part whilst new aircraft continue to be in demand which means a competitive landscape for those looking to invest in the types. On the in-production front, Airbus A319s, A330-200s, and Boeing 737-700s continue to struggle to find homes as many operators look to their larger siblings for lift. Airbus A320s, 321s, 330-300s, A350-900, Boeing 737-800s, 777-300ERs, and 787s continue to be the aircraft of choice, which in turn has stabilized and even strengthened values and lease rates for most. We are starting to see some softening in 777 values, which we believe is due to the competitive nature of some of the Boeing campaigns to fill the order book until the 777X enters service.
For most out-of-production aircraft, such as Airbus A340s, Boeing 767s, Boeing 747s, McDonnell Douglas and Fokker aircraft, a declining value and lease rate trend continues, as the demand for these types remains low making it difficult to place these aircraft, sometimes at any price. We are seeing demand for some 737-300/400s and 757s, that are in good condition and don’t require heavy maintenance in the near term. This has helped to stabilize values and lease rates for the types, which some investors are taking advantage of.
For regional aircraft, 50 seat regional jets continue to struggle as demand for these aircraft remains limited. There is a market for some aircraft, such as the CRJ-200LR and ERJ-145LR, but many operators are shifting their focus on the larger variants for future lift. E170s and CRJ-700s markets are soft for used aircraft due to the lack of a diversified secondary operator base. In the long term, we feel this will change but the near term market for these aircraft will remain soft. The E190 continues to be the aircraft of choice for this market segment, which brings further stability for values and lease rates. The jury is still out for the new aircraft (SSJ100, MRJ90, CSeries) that have or will enter service in the near term. The Embraer E2 family of aircraft has gained quite a bit of traction in the market, which should bode well for the type as it enters service in the next few years.