The official publication of the International Society of Transport Aircraft Trading SPRING 2015 Q&A: AWARD WINNER ISTAT Holiday Parties Around the World The Sweet Sound of the Drone Also Inside: The Year Ahead in FINANCE & LEASING 2015 POISED TO BE STRONG YEAR FOR GLOBAL LEASING
2
Embed
The Year Ahead in FINANCE & LEASING - Fintech · I Boeing 737-800 Values as of January 2015 Aircroft specifiction assumes MTOW 174,100 lbs, CFM56-7827E engines and Blended Winglets
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
The official publication of the International Society of Transport Aircraft Trading
the back o f orders from Hapag Lloyd Flug, and since the f i rst deliveries i n 1998, the variant has accumulated 4,540 orders with 3,485 deliveries. The 737-800 is the most popular variant of the 737NG family with operators and financiers, accounting for 70 percent o f a l l MG orders. The aircraft continues t o offer competitive operating economics with adaptable seating solutions allowing it t o service both the Low-cost and main-line carriers. A long-range ver- sion is no t available; however the incor- poration o f optional Air Partners APB or Blended Winglets increases fuel efficiency and provides additionaltake-off and range performance enhancements. Such are the benefits o f th is option tha t 98 percent o f a l l -800s delivered from 2012 t o 2014 incorporated this modification.
The Leasing and finance sector owns over 60 percent o f the installed fleet, and remains a core asset for the sector. Dispersed amongst 167 operators, the 16 Largest account for over 50 percent of the current fleet, with Ryanair the Largest a t 302 units. Backlog currently stands at 1,055 w i th 40 aircraft i n storage and 3 ex-Jet Airways i n a state of part-out. The average age o f the fleet stands at only 6.4 years and is unlikely t o waiver significantly i n the
near- t o medium-term as Boeing recently announced their intention t o raise model production rates yet again to 52 per month i n 2018.
400
2W 3izS P m e M Eump nurY. M i u u r l esir Ardco
Source: ATDB
Current and Future Outlook Since 2008, values for the 737-800 have
recovered well and market values are cur- rently a t or near t o base values. The ability o f Lessors t o continue t o place the new 737-800s on Lease for 12 years a t f i rm market rates clearly indicates the value o f the aircraft t o both operators and the finance industry alike. Reliance on a single powerplant supplier may reduce negotiat- ing Leverage o f some purchasers but the used market benefits from a homogenous product with excellent liquidity.
As o f the start o f 2015 Air Fax were report ing 16 737-800 aircraft for sale or Lease (an increase o f two units from January 2014). Given the f inancial and
pol i t ical turmoi l i n Russia and Ukraine, some lessors who have significant 737-800 exposure are assessing their options and it is likely that availability w i l l increase i n the short term. I n addition, as a result o f production rate increases i n 2005 and 2006, we also expect further availability as in i t ia l 10 year Lease terms are completed. Offers from part-out companies currently remain below Current Market Values but the Launch of Aeronautical Engineer's -800 freighter programme w i l l offer fur ther residual-value support.
There is, understandably, considerable focus on forecasted values of the 737-800 over the next 10 years given the planned introduction o f the 737-8MAX i n 2017 and Boeing's reluctance t o confirm the estimated NG termination date. Fintech does not foresee any immediate impact i n residual values of the model as a whole and we share the common conception that residuals w i l l become impacted once the MAX assumes 40-45 percent of the NG mar- ket. We also believe the magnitude and timing of any shif t w i l l also partly depend upon o i l price trends. Given that the main attribute of the 737MAX is the provision o f a more fuel-efficient engine some operators and investors wi l l be re-assessing purchase pricing levels i n Light of the recent pricing collapse of j e t fuel. A
I Boeing 737-800 Values as of January 2015
Aircroft specifiction assumes MTOW 174,100 lbs, CFM56-7827E engines and Blended Winglets Future Values assume maintenance status returning to half life a t 4 years of age.