AEA Pilot's Guide 2022-2023 - 63

AIRCRAFT VALUATION AND LEASE RATE DATA
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40690
Trends and Market Analysis of Aircraft Values
January 07, 2019
NEWS
Vol. XXVIII No. 1
www.aviationtoday.com
Semi-Annual Jet Aircraft Value Listing
thereby affecting new net pricing and used values of both narrowbodies and widebodies.
The record backlog is not preventing the two principal protagonists from engaging in significant competition,
he combined backlog of Airbus and Boeing amounted to over 13,100 aircraft as of the end of November 2018.
The r
Competitive Pricing of New Aircraft Continues to Impact Used Values
d backlog is not pr
enting the two principal pr
gonists from engaging in significant competition,
The combined backlog of Airbus and Boeing amounted to over 13,100 aircraft as of the end of November 2018.
Airbus had the larger backlog of 7,337 aircraft versus the 5,772 of Boeing. In terms of narrowbodies Airbus had a backlog
of 6,262 A320 family members including the A220 and Boeing 4,651. While Airbus may be lagging slightly behind Boeing
in terms of deliveries, their orderbook for the A320 is significantly higher. Airbus still has some A320ceo family members
to deliver versus the 100 B737NGs of Boeing. Boeing still do not breakdown the orderbook for the B737MAX even
though they do so for the B737NG. The U.S. manufacturer cites the ability of customers to change variants, something that
was always occurring withy the B737NG. With Boeing struggling to match the 2,215 orders for the A321neo, it is perhaps
little wonder that there is little appetite to publicly expose the limited number of orders for the B737-9 and B737-10. Whilst
there have been announcements concerning the conversion of A320neo orders to A321neos, there appear to have been few
such conversions from the B737-8 to the -9 or -10 apart from a few stalwart Boeing customers.
Even with 13,000 aircraft on backlog which equates to some eight years of production, the manufacturers still need
o compete. The competition among the two is intense and this continues to impact new net pricing - ie the price being paid
by customers to the manufacturers. New net pricing differs from values of a new aircraft. The definition of the value of a
new aircraft is that a single aircraft has just been delivered but is then sold between two parties other than the manufacturer.
The aircraft is therefore brand new with 100 percent life in terms of maintenance status and warranties. As such there has
to be a recognition that for widebodies in particular, there may be a need to reconfigure and repaint the aircraft.
The net price of a new aircraft will frequently refer to the base value which will then be subject to escalation
ough to delivery. The relevance of escalation and its method of calculation is very much still a matter of debate as
it takes no note of market forces. Orders placed during a strong market have in the past been delivered in a weaker
market. In the period between order and delivery, escalation may have seen the delivery price increase by some 10-15
percent but during weak market conditions, the airframe manufacturers may be selling cancelled or re-scheduled
delivery slots for a price lower than the escalated price. This occurred when orders were placed in 2007-2008 only for
The net price of a new air
. The r
et f
aft will fr
y refer to the base value which will then be subject to escala
ance of
tion is very much still a matter of
ed in a w
through to delivery. The relevance of escalation and its method of calculation is very much still a matter of debate as
it takes no note of market forces. Orders placed during a strong market have in the past been delivered in a weaker
market. In the period between order and delivery, escalation may have seen the delivery price increase by some 10-15
percent but during weak market conditions, the airframe manufacturers may be selling cancelled or re-scheduled
delivery slots for a price lower than the escalated price. This occurred when orders were placed in 2007-2008 only for
ough to deli
it takes no note of
tion and its method of
. Orders placed during a strong mar et ha e in the past been deli
et. In the period between order and deli
cr
cent but during weak mar et conditions, the airframe man
, escalation may ha e seen the deli ery price increase by some 10-15
ers may be selling cancelled or r
deliveries to be effected in 2009-2010 when market conditions were much weaker.
The reported base price of a new air
la
bor intensi e and lar
v
bor intensi e and lar
gel
oducts
ery slots for a price lo er than the escalated price. This occurred when orders w e placed in 2007-2008 only f
The reported base price of a new air aft may also fail to include the full price of
aft may also fail to include the full price of
y
Buy
er Furnished Equipment
(BFE) and indeed, Specification Change Notifications (SCNs). BFE involves the cost of seats, galleys and lavatories
etc, while SCNs involves changes to weights, engine types, avionics, fuel capacity etc. SCNs may involve a greater
number of options priced at list prices. A larger order for BFE will allow for economies of scale for what are still
The announced purchase price ma , or may not, include an element f
pilot training, product support, spare components and spare engines.
The basis of the value of a new air
(unless specified otherwise). A failure to a
a new air
assumptions are altered). There are r
e double digits. Man
(unless specified otherwise). A failure to appreciate the difference in assumptions between the net selling price and
cr
te the dif
the value of a new aircraft continues to cause confusion.
The net selling price of a new air
ers will ther
assumptions are altered). There are relatively few orders placed that involve a single unit. Indeed, many orders
involve double digits. Manufacturers will therefore give considerable discounts for the larger orders. A customer for
the B737-8 will likely achieve a price of less than $40 million when ordering some 50 aircraft compared to the single
The net selling price of a new aircraft can vary considerably while the value of a new aircraft does not (unless
aft can vary consider
aft can vary consider
ence in assumptions between the net selling price and
y while the value of a new air
abl
y while the value of a new air
y few orders placed that in
e gi e consider
the B737-8 will lik y achie e a price of less than $40 million when ordering some 50 air
unit value of $50 million. Even with smaller order quantities the man
cr
involve double digits. Manufacturers will therefore give considerable discounts for the larger orders. A customer for
the B737-8 will likely achieve a price of less than $40 million when ordering some 50 aircraft compared to the single
unit value of $50 million. Even with smaller order quantities the manufacturers may engage in strategic discounting
assumptions are altered). There are r
tively few orders placed that involve a single unit. Indeed, many orders
le discounts for the larger or
e a single unit. Indeed, many or
aft compared to the single
ers may engage in str tegic discounting
● Jet Aircraft Current & Future Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
© 2019 Access Intelligence, LLC. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $150,000 for violations.
© 2019 Access Intellig
, LL . F
al copyright law prohibits unauthorized r
oduction by any means and imposes fines of up to $150,000 for violations
age 2
aft does not (unless
aft does not (unless
. A customer f
The basis of the value of a new aircraft is a willing seller, willing buyer, for cash and assumes a single unit sale
.. The announced purchase price ma , or may not, include an element f
aft is a willing seller, willing b
, for cash and assumes a single unit sale
(BFE) and indeed, Specification Change Notifications (SCNs). BFE involves the cost of seats, galleys and lavatories
etc, while SCNs involves changes to weights, engine types, avionics, fuel capacity etc. SCNs may involve a greater
number of options priced at list prices. A larger order for BFE will allow for economies of scale for what are still
y bespoke pry bespoke pr
or
er Furnished Equipment
te as
to compete. The competition among the two is intense and this continues to impact new net pricing - ie the price being paid
by customers to the manufacturers. New net pricing differs from values of a new aircraft. The definition of the value of a
new aircraft is that a single aircraft has just been delivered but is then sold between two parties other than the manufacturer.
The aircraft is therefore brand new with 100 percent life in terms of maintenance status and warranties. As such there has
to be a recognition that for widebodies in particular, there may be a need to reconfigure and repaint the aircraft.
The net price of a new aircraft will frequently refer to the base value which will then be subject to escalation
though they do so for the B737NG. The U.S. manufacturer cites the ability of customers to change variants, something that
was always occurring withy the B737NG. With Boeing struggling to match the 2,215 orders for the A321neo, it is perhaps
little wonder that there is little appetite to publicly expose the limited number of orders for the B737-9 and B737-10. Whilst
there have been announcements concerning the conversion of A320neo orders to A321neos, there appear to have been few

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AEA Pilot's Guide 2022-2023

Table of Contents for the Digital Edition of AEA Pilot's Guide 2022-2023