in Aerospace

IBA adjusts aircraft values to account for Covid-19 impact

Posted 8 July 2020 · Add Comment

Aviation data and advisory company, IBA, has adjusted its market values for all commercial passenger aircraft types across the widebody, narrowbody, regional jet and turboprop categories to reflect the impact of Covid-19.

Image copyright Shutterstock

Phil Seymour, President of IBA, said: "It is vital that the correct valuation approach is taken, and in some cases base value will be a more appropriate measure than market value. Each and every aircraft needs to be valued using the correct parameters.

“Covid has had an undisputed negative effect on all commercial aircraft values, but not all of these will be permanent. Once airlines have rebalanced their fleets to cater for demand levels in the coming years, the values of certain aircraft will recover, and this is reflected in their relatively small value decline now.”

The newest generation of narrowbody and widebody aircraft have seen the mildest adjustments, as rising costs and environmental legislation lead operators to favour these assets over older aircraft types.

Of the new generation narrowbodies, the Airbus A220 and the A320neo have seen a comparatively low decline in market value of 5-8%, whilst the Boeing 737 MAX has seen a greater value fall as orders continue to be cancelled following its grounding last year.

The A320ceo, A321ceo and Boeing 737-800 models are the least affected of the current generation narrowbodies, declining in value from 9-16%, whilst the A319-100 and Boeing 737-700 have suffered the greatest negative adjustments due to several fleet exits (A319) and a concentrated fleet (737-700).

In the new generation widebody category, the Boeing 787 and Airbus A350 families represent the pride of many prominent flag-carriers’ long haul fleets, and these high yielding aircraft have seen a modest value decline of 4-13%. The most resilient variant of these types from a value perspective is the Boeing 787-9, which has declined least due to its broad operator base, operational flexibility and medium capacity which align well with current demand levels.

Many of the older widebodies, particularly the four engine types such as the Boeing 747 and Airbus A340, have declined by as much as 30-40%, with little hope of recovery as the number of in-service aircraft continues to wind down. 

The decline in twin engine widebody values has varied, with certain Boeing 777 variants (200 and 200LR) accelerating their value decline which started prior to the Covid pandemic.

IBA sees long term potential through passenger to freighter conversion (P2F) for the Airbus A330-300 and Boeing 777-300ER, the latter of which has just been converted to a freighter for the first time, and the Boeing 767-300ER, which is a proven freighter with lots of passenger variants now being retired which are ripe for conversion.

IBA sees an uncertain future for the A380 with production ending next year, and many airlines opting to retire their aircraft early. With little secondary market demand other than for teardown to support existing fleets, its values have declined by up to 34%.

Amongst regional jets, IBA believes that those operated extensively in the large US regional market such as younger examples of the Embraer E175 and CRJ900 should remain relatively insulated.

In the turboprop market, ATRs have generally fared best from a value perspective, with the ATR42-600 the least affected. However, the Dash8/Q400 faces a much steeper value decline due to an excess number of available aircraft following airline failures and fleet restructurings.


* required field

Post a comment

Other Stories
Latest News

Future Combat Air continues to drive economic advance across the UK

Seven companies representing the breadth of innovation across the UK have signed agreements to progress opportunities to work on future combat air concepts and underpinning technologies across Team Tempest.

BAE Systems and WAE partner on fast jet development

BAE Systems and Williams Advanced Engineering (WAE) have joined forces to explore how battery management and cooling technologies from the motorsport industry could be exploited to deliver efficiency and performance gains in the

CFMS study bolsters business case for regional electric aircraft

A new study from the Centre for Modelling & Simulation (CFMS), a not-for-profit specialist in digital engineering, has helped the aerospace industry move a step closer to the development of regional electric aircraft.

Nasmyth TMF awarded Nadcap Chemical Processing Merit Status

Nasmyth TMF is pleased to announce that it has been awarded Merit Status for Nadcap Chemical Processing.

UK space launch sector builds foundation for collaborative future

Industry leaders are urging the UK government to establish world-class rules to enable safe, environmentally conscious and commercially viable space launches from British soil.

Shell Aviation launches automated end-to-end touchless refuelling process

Shell Aviation has introduced end-to-end digital integration with airline customers through Shell SkyPad, its tablet that connects pilots and apron operators with cloud-based computer systems.

ODU 0201311219
See us at
DVD 2020