LAXintl
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2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 4:20 pm

Back by popular request, here is an update on industry aircraft valuations and market lease rates.

Below are estimated current market value (in USD) based on oldest to newest airframes, along with sample monthly lease rates in (USD,000) based on oldest to newest airframes for many common models.


A319 – $11.8-31.1M, $125-265,000
A320 – $5.0 - 39.3M, $70-320,000
A321 – $19.3 - 43.4M, $195-365,000
A330-200 – $43.0 - 83.4M, $440-775,000
A340-300 – $20.0 -59.7M, $275-580,000
B737-300 – $2.5 – 6.5M, $105-145,000
B737-700 - $15.3 - 31.2M, $160-280,000
B737-800 - $19.7 - 40.7M, $235-350,000
B737-900ER - $32.9 - 44.4M, $310-375,000
B747-400 – $18.0 – 59.3M, $350-670,000
B757-200 – $6.5 – 20.6M, $120-225,000
B767-300ER – $9.5 – 58.9M, $205-520,000
B777-200ER – $42.0 – 107.8M, $560-995,000
B777-300ER – $86.0 – 147.0M, $860-1,285,000
MD-11 - $10 – 12.5M , $150-190,000
MD-82 - $1.0 - 2.9M, $25-60,000
CRJ200 – $2.8 - 7.1M, $40-80,000
CRJ700 – $10.0 – 21.2M, $110-220,000
CRJ900 - $13.8 – 23.6M, $150-245,000
Q400 – $8.5 – 18.8M, $130-210,000
ERJ145 – $4.8 – 8.7M, $60-90,000
EMB170 – $14 – 23.3M, $150-230,000
EMB190 – $19.5 – 29.0M, $210-260,000
ATR-72 – $5.6 – 18.5M, $70-180,000

Information is derived from transactions and valuation and is current as of June 2011.


The grand bargain of the year continues to be the MD-80 series.

Other notable types that have seen swings in valuations from 2010 include the Bombardier Jet models which all notably slipped (Embraer’s held their prices better in comparison) and the MD-11 which saw a large 20% large decline in valuation as the type is falling out of favor even as a freighter. Meanwhile the Airbus small narrow bodies saw a bit of pricing weakness compared to their Boeing NG cousins which helped push the parting out of several older A320 aircraft. The 737-300 saw a bit of a resurgence in lease pricing as more parked airframes found new homes.

Looking forward as the finally 787 enters service, its likely models such as 767-300ER which have had rather resilient valuation will start to experience declines, while the large widebody 747-400 will continue to its valuation slip as more operators park the model and freighter conversion demand remains tepid.

=
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seabosdca
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 4:37 pm

For all the 757 diehards out there, the market doesn't lie. Compare the A321, 737-900ER, and 757 values, even after adjusting for aircraft age.

I'm also surprised by the relative values of the A321 and 737-900ER. I'd expect the A321 to command more.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 4:44 pm

Quoting LAXintl (Thread starter):
MD-82 - $1.0 - 2.9M, $25-60,000
Quoting LAXintl (Thread starter):
The grand bargain of the year continues to be the MD-80 series.

Indeed.
With prices like that plus a well-established maintenance and spare parts network, why aren't we seeing more MD-80s being converted to private use?
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lightsaber
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 4:57 pm

Thank you for the list. Some interesting numbers.

Quoting LAXintl (Thread starter):
The grand bargain of the year continues to be the MD-80 series.

Until the fuel bill arrives.   

Quoting LAXintl (Thread starter):
the MD-11 which saw a large 20% large decline in valuation as the type is falling out of favor even as a freighter.

IMHO, this will be the #2 type hit by the 787 EIS. Not by the 787 directly, but by other airframes being made available for conversion as they are replaced.

Quoting LAXintl (Thread starter):
while the large widebody 747-400 will continue to its valuation slip as more operators park the model and freighter conversion demand remains tepid.

This is the #1 airframe, in my opinion, that will be hit by the 787 EIS. The 744 is also being hit by the A380 *finally* hitting production stride as well as continued 77W success. Fuel and maintenance are just too high on the 744, even for freight duty.   I expect freight will continue its shift towards a greater fraction going belly cargo.

Quoting LAXintl (Thread starter):
Looking forward as the finally 787 enters service, its likely models such as 767-300ER which have had rather resilient valuation will start to experience declines,

And the #3 airframe that will lose value due to the 787EIS. However, I expect the 763ER to be more resiliant than the 744 and MD-11. What will spank the 763ER is going to be the A320NEO and 737RE *if* a good TATL version (which I expect) is made available. So I am predicting that by 2018, 763ER resale will look like 752 resale values today.  
Quoting LAXintl (Thread starter):
The 737-300 saw a bit of a resurgence in lease pricing as more parked airframes found new homes.

This was the #1 pleasant surprise for me in this list.

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co38
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 9:36 pm

Quoting LAXintl (Thread starter):
Back by popular request, here is an update on industry aircraft valuations and market lease rates.

Very interesting read, thanks for posting! 
 
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 9:43 pm

Quoting seabosdca (Reply 1):
For all the 757 diehards out there, the market doesn't lie.

757 values are holding up as there is steady second-hand demand for them, primarily as Fedex has stated it will acquire some almost 100 (non-winglet) examples over the next few years.

But, I'd expect the floor to fall out if a US major were to park a large number of them at a faster rate then the secondary market supports.

Quoting seabosdca (Reply 1):
I'm also surprised by the relative values of the A321 and 737-900ER. I'd expect the A321 to command more.

Remember there are a lot of older A321s out there, while the 737-900ER is almost new.
But in general the NGs are seeing a slight premium over their equivalent Airbus models.

Quoting TSS (Reply 2):
With prices like that plus a well-established maintenance and spare parts network, why aren't we seeing more MD-80s being converted to private use?

Probably too big.

There is a freighter conversion project ongoing, but seems that has almost stalled due lack of customer desire.

Quoting lightsaber (Reply 3):
The 744

The 747-400 has become yesterdays plane especially in the passenger game. Seems like every major operator has made succession plans for the model - many with the 77W.

Without a robust economy driving increased global trade, the demand for freighter conversions is weak which will only cause the models valuation fall further in the coming years.

Quoting lightsaber (Reply 3):
I expect freight will continue its shift towards a greater fraction going belly cargo.

Not according to Airbus, Boeing, and industry estimates.

The percentage of cargo moved on pure freighters is actually on the rise in part due to more stringent security requirements for aceptanace of cargo at passenger flights, and also due to reduction in average aircraft size at many operators globally.
So the large pure freighter business in the long run looks bright.
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RE: 2011 Aircraft Values, And Lease Pricing

Fri Aug 12, 2011 10:22 pm

Quoting LAXintl (Reply 5):
Remember there are a lot of older A321s out there, while the 737-900ER is almost new.
But in general the NGs are seeing a slight premium over their equivalent Airbus models.

From talking to lessors, I'd expect this premium to continue growing. There's a lot of extra A320s on the market and Airbus is making the problem worse with its aggressive sales campaigns. I've heard jokes that Airbus is no longer competing with Boeing when trying to sell new planes, but against lessors with A320s.

I'm not sure the trends makes complete sense to me since Airbus isn't producing that many more planes than Boeing. I guess they're less sensitive to the dynamics of the leasing community.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Sat Aug 13, 2011 1:35 pm

How are the less popular 757-300 and 737-600 doing compared to their more popular siblings with regard to their market value?

I would guess the 737-600 to be valued far less than 737-700, and the 753 about the same as the 752 of the same year of make(?).
 
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RE: 2011 Aircraft Values, And Lease Pricing

Sat Aug 13, 2011 6:46 pm

Quoting sxf24 (Reply 6):

One of the issues is since the A320 has been in production much longer (10-year jump on Boeing), its found its way into many new and smaller secondary homes, which has kept the second hand market quite active.
The NG series being newer is a more stable market since the majority of frames are still with their primary first owners and less tails chasing customers on the secondary market.

Quoting CO38 (Reply 7):
How are the less popular 757-300 and 737-600 doing

B737-600 - $11.0 - 19.5M, $150-200,000, which definitely is a depressed value compared to the -700.

For the 757-300, there really is no active valuation for it, as there have been virtually no transactions involving the type in recent years, so there is not much of a history to go on.
However I would estimate the 753 would have a higher value than the 752 fleet due to its younger age and greater capacity/revenue earning capability.
Of course this is all relative, since if for example Delta were to decide to park its fleet overnight, the value could plummet unless there was a counter party ready to take the frames.
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 4:01 am

Quoting LAXintl (Reply 5):
Not according to Airbus, Boeing, and industry estimates.

Do you have a link so that I may educate myself better on the transition of cargo to dedicated freighters from belly cargo? I'm under the impression that belly cargo was doing better than is apparently the case. In particular, I see a large part of the 'premium' for the 77W being its use as today's "combi" due to its excellent relative cargo capabilities.

That and reading threads with DL holding seats empty SLC-NRT for cargo, ditto with EK DXB-SFO (and vice versa).

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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 4:57 am

Quoting LAXintl (Reply 5):
Quoting TSS (Reply 2):
With prices like that plus a well-established maintenance and spare parts network, why aren't we seeing more MD-80s being converted to private use?

Probably too big.

Compared to Gulfstreams, Citations, etc., certainly, but compared to BBJs an MD-80 would offer similar interior space at a fraction of the price. Figure 2.5 mil for a cherry, low-time MD-80 plus (I'm guessing) an equal amount for a full interior plus paint equals 5 mil all-in versus how much for a new BBJ?
On the other hand, I'm being practical about what is probably by nature a distinctly impractical purchase, and I'm ignoring the "bragging rights" angle, which I'd imagine factors heavily into any such purchase, so I've just invalidated my own argument.

Quoting LAXintl (Reply 5):
There is a freighter conversion project ongoing, but seems that has almost stalled due lack of customer desire.

Would this be an update/adaptation of the DC-9/34 CF concept? I seem to remember seeing a photo of one with a huge cargo door, complete with windows, on the port side.
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co38
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 11:50 am

Quoting TSS (Reply 10):
Figure 2.5 mil for a cherry, low-time MD-80 plus (I'm guessing) an equal amount for a full interior plus paint equals 5 mil all-in versus how much for a new BBJ?

Below is a website for a MD-87 Passenger-to-VIP conversion specialist/broker. (But the site seems to be down at the moment). Was working a couple of days ago. Lot of nice interior pics though  According to controller.com theres a couple of MD87VIPs for sale.

http://www.md87vip.com
 
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 2:05 pm

LAXIntl, Thanks for posting this.

Any valuations on the E135. I know its difficult with 30 of them sitting at IGM but anything would be helpful.
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Stitch
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 3:28 pm

Quoting seabosdca (Reply 1):
I'm also surprised by the relative values of the A321 and 737-900ER. I'd expect the A321 to command more.

The lowest number is likely for the A321-100.



Quoting LAXintl (Reply 5):
Without a robust economy driving increased global trade, the demand for freighter conversions is weak which will only cause the models valuation fall further in the coming years.

The latest spec of the 777-200 freighter is good for some 107t in payload, which is within ~5t of the 747-400BCF and you don't have the lower floor loading issues forward of BS1000 (the forward edge of the wingbox).

Yes, a new 777F is a good bit more of a capital investment than a used 747-400 and conversion, but your operating costs are going to be a great deal lower from the beginning and your useful airframe life will be longer. So the economics over the long term likely favor the 777F.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 5:29 pm

Quoting LAXintl (Thread starter):
Below are estimated current market value (in USD) based on oldest to newest airframes, along with sample monthly lease rates in (USD,000) based on oldest to newest airframes for many common models.

Are these dry lease rates or wet lease rates?

Thanks in advance
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Stitch
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 7:48 pm

Quoting erikgnoha (Reply 14):
Are these dry lease rates or wet lease rates?

Should be dry. The source I have lists dry.
 
LAXintl
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 8:17 pm

Quoting lightsaber (Reply 9):
Do you have a link so that I may educate myself better on the transition of cargo to dedicated freighters from belly cargo? I'm under the impression that belly cargo was doing better than is apparently the case.

Sure there is lots of stuff out there.

You can read the Airbus, Boeing and IATA forecast which all call for solid demand of pure freighter aircraft.

Boeing:
http://www.boeing.com/commercial/cmo/freighter_market.html
http://www.boeing.com/commercial/cargo/wacf.pdf

Due to a tripling in traffic levels and the preference
among airlines and shippers for dedicated freighter
service, the freighter fleet will increase by more than
two-thirds, from 1,755 to 2,967 airplanes. Although
1,282 airplanes will be retired, 2,494 airplanes will
be added to the freighter fleet by 2029.
A shift toward widebody freighters will result in a
fleetwide increase in average freighter airplane payload,
which accounts for the disparity between growth in
demand for cargo services and fleet growth. Well
over half of all additions to the fleet will be in the
widebody (medium and large freighter) categories.


Asian markets will lead global growth and underscore the value of the 747 freighter asset.
- Approximately 80% of airfreight from Asia is carried on maindeck freighters


Airbus: (9mb download)
http://www.airbus.com/company/market...?eID=dam_frontend_push&docID=14868

In addition here are some quotes from various presentations.

US Air Transport Association:
While lower deck, or belly space, on commercial passenger carriers provides approximately half of all international air cargo movement in and out of the U.S. This heavy usage of commercial passenger carriers capacity will be insufficient in the years to come to support expected air freight demand against a relatively flat industry capacity. Coupled with 100% cargo security screening requirements, the demand for pure freighter aircraft, particularly medium and large widebodies will dominate air cargo markets to provide the critical lift for US international air trade.

International Air Cargo Association:
Declining Availability of Belly Space

Air cargo operations are increasingly separating from passenger airline operations.
Currently, 55 percent of US air cargo carrying capacity is in the bellies of passenger aircraft.
Use of belly space is decreasing, while use of dedicated all-cargo aircraft is increasing.
This change can be attributed to the following reasons:
• Increased market share held by the integrated express carriers
• Freight forwarder preference to enter into deep business relationships with all-cargo operators
• Higher passenger load factors, leaving less space/weight for cargo
• Reduced average fleet size by airlines including increased use of smaller regional jets
• Growing security restrictions
While there is likely to be a continued market for the passenger airline belly cargo, most projections
indicate strong growth for integrated carriers along with dedicated freighter operators while
seeing a continued decline for air cargo traveling on commercial passenger airlines, particularly
in the US market.


Lufthansa:
Intercontinental markets worldwide where the percentage of capacity provided by freighters, as opposed to passenger aircraft bellyholds, was likely to increase over the next five years.
Specifically, said Andreas Otto, Lufthansa Cargo's executive board member for product and sales, the freighter share of the total cargo intercontinental capacity on was projected to rise from 73 percent in 2010 to 77 percent in 2015, with the bellyhold share dropping commensurately from 27 percent to 23 percent. In North-Asia origin markets particularly, the capacity requirement will be significantly greater than the potential growth in belly capacity," he explained.


Quoting TSS (Reply 10):
I seem to remember seeing a photo of one with a huge cargo door, complete with windows, on the port side.

Yes here is the company.
http://www.aeronautical-engineers.com/

Prototype is an ex AA MD-80.

Quoting bjorn14 (Reply 12):
Any valuations on the E135. I know its difficult with 30 of them sitting at IGM but anything would be helpful.

Well due lack of transactions, the below estimate is probably quite generous. Unless planes move soon, they probably are not worth much more than scrap/parting value.

ERJ135ER – $3.7 – 5.2M, $40-50,000

Quoting Stitch (Reply 13):
So the economics over the long term likely favor the 777F.

Unless you can use a 747-8F.

Actually in fairness to the 747-400, having had a business relationship with a major 747 freighter operator, the 747-400F does still have a very compelling business case. The model especially now has relative low acquisition cost, more flexible ops (no ETOPS headache), and better mix of cargo (777 has both DG and sizing limitations) capability.

Quoting erikgnoha (Reply 14):
Are these dry lease rates or wet lease rates?

They are for finance and operating leases.

Wet lease is a whole other ball game that is usually price in per block-hour rates.

[Edited 2011-08-14 13:34:22]
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RE: 2011 Aircraft Values, And Lease Pricing

Sun Aug 14, 2011 9:38 pm

Quoting LAXintl (Thread starter):
Information is derived from transactions and valuation and is current as of June 2011.

What source do you use for that information?
 
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 15, 2011 3:38 pm

I regularly get a compiled report, but it seems the data crunching originated from these guys - http://www.ascendworldwide.com/
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Stitch
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 15, 2011 5:07 pm

Quoting LAXintl (Reply 18):
I regularly get a compiled report, but it seems the data crunching originated from these guys - http://www.ascendworldwide.com/

And mine comes from Aircraft Value News.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 15, 2011 6:29 pm

I see the B737-300 has a lower lease rate of $105k p.m. I view that as very high for the lower end older models. My experience thus far is that they are going for as little as $70k p.m.

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LAXintl
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 15, 2011 9:31 pm

As I mentioned in my initial posting, 737-300 pricing has seen a recent resurgence as more parked inventory has found second homes.
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A388
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 16, 2011 3:40 pm

Interesting read LAXintl but what are your sources for those lease rates and market values? You mention transactions, but which transactions and by whom? I'm interested in knowing the details on how these lease rates and market rates are obtained and/or determined. Please let me know.

EDIT: I see your posts with your source info, thanks but if you have more detailed information, that is always welcome of course!!!

A388

[Edited 2011-08-16 08:51:49]
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 16, 2011 3:50 pm

Quoting LAXintl (Reply 16):
Quoting Stitch (Reply 13):
So the economics over the long term likely favor the 777F.

Unless you can use a 747-8F.

Actually in fairness to the 747-400, having had a business relationship with a major 747 freighter operator, the 747-400F does still have a very compelling business case. The model especially now has relative low acquisition cost, more flexible ops (no ETOPS headache), and better mix of cargo (777 has both DG and sizing limitations) capability.

Good observations and also thank you very much for your qoutes on how full freighters are expected to increase compared to passenger belly cargo.

A388
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 16, 2011 4:33 pm

LAXintl,

Do you also have the same data for the previous months and a comparison to last year's valuation and lease rates? That will be interesting to see.

A388
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 16, 2011 7:55 pm

Feel free to compare prices in previous postings.

Aircraft Values, And Lease Pricing –Christmas 2010 (by LAXintl Dec 22 2010 in Civil Aviation)
2010 Aircraft Values, And Lease Pricing (by LAXintl Jul 1 2010 in Civil Aviation)
Updated: Aircraft Values, And Lease Pricing (by LAXintl Mar 13 2009 in Civil Aviation)
Attn: Armchair CEO's- Latest Airplane Lease Prices (by LAXintl May 13 2008 in Civil Aviation)
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 29, 2011 3:33 pm

A sign of things to come for the A340 - Per AW&ST August 22 print edition

A340 Dismantling Candidate
The Airbus A340-300 is the top disassembly pick for GA Telesis because acquisition cost are low, parts have commonality with other Airbus models, and the CFM56 engine has large operator base, says Stefan Kageman, GA Telesis, VP of Aircraft Sales and Marketing.
In addition, because four engine power the aircraft instead of two, its maintenance cost are higher, which also means there is a demand for used components from remaining operators.


With its relative poor economics compared to twins, and approaching 20-years in ago, the days of the A340 seem to have passed for good.
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RE: 2011 Aircraft Values, And Lease Pricing

Mon Aug 29, 2011 3:43 pm

Quoting LAXintl (Reply 26):
With its relative poor economics compared to twins, and approaching 20-years in ago, the days of the A340 seem to have passed for good.

I think the only real option for continued operation is as a VIP bird where operating costs are not so important since the flight hours are low. I expect the A340-200 and A340-500 will be the prime candidates for this (due to their range) so that leaves the A340-300's future as beer cans.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 30, 2011 2:01 am

Quoting scarebus03 (Reply 20):
I see the B737-300 has a lower lease rate of $105k p.m. I view that as very high for the lower end older models. My experience thus far is that they are going for as little as $70k p.m.

Since LAXintl has already replied, I'll just note I'm pleasantly surprised by the strength of the revival. If the C-series does well, I expect 733 lease rates to fall off a cliff in 2015.

Quoting Stitch (Reply 27):
I think the only real option for continued operation is as a VIP bird where operating costs are not so important since the flight hours are low.

Conveniently, I bet Kadafi's example is available.   

Quoting LAXintl (Reply 26):
With its relative poor economics compared to twins, and approaching 20-years in ago, the days of the A340 seem to have passed for good.

I think all it is waiting for, to truly end its era, is a significant number of 787s to enter service. Between the A333 payload/range improvements and the 787, there is no economic niche left for the A340. Not a bad design. Its served well for almost two decades. I expect the type to become beer can quickly in 2013-2015.

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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 30, 2011 7:32 am

A340-300 – $20.0 -59.7M, $275-580,000

and what do we know about the A340 500 and 600 models from your sources ?
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 30, 2011 1:53 pm

Quoting corernagh14 (Reply 29):
and what do we know about the A340 500 and 600 models

For a 2008 delivery A340-500HGW: USD 73 to USD 88 million.

For 2006 delivery A340-600: USD 58 to USD 70 million.
 
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RE: 2011 Aircraft Values, And Lease Pricing

Tue Aug 30, 2011 8:59 pm

For a 2008 delivery A340-500HGW: USD 73 to USD 88 million.

For 2006 delivery A340-600: USD 58 to USD 70 million.

many thanks for this input