New narrowbody aircraft base values have risen beyond the long-term trend during early 2023, and lease rates are forecast to climb further this year.
IBA’s ISTAT-certified experts have found that the base value of a new Airbus A220-300 was US$38.25 million in 2019, a value that will climb to US$39.227 million in 2023. The base value of a Boeing 737 MAX 8 was US$52.306 million in 2019, which is expected to reach $53.125 million in 2023. Overall, base values of new narrowbody aircraft have risen between 1.1% and 1.6% across 2022 and 2023.
Lease rates for a new A220-300 were US$266,000 per month (pm) in January 2020 and had reached US$260,500 pm in January 2023. They are expected to grow to US$278,000 pm by July 2023. The 737 MAX 8 was US$305,000 pm in January 2020 and has increased to US$335,000 pm in January 2023.
For previous-generation narrowbody aircraft, base values continue to show a natural decline although IBA forecasts the prospect for some market value recovery through the first half of 2023. A 12-year-old Boeing 737-900ER base value was at US$21.462m in 2019, which is expected to fall to US$19.865 million in 2023, according to data from IBA’s Insight intelligence platform. The same age A320-200 aircraft was at US$18.713 million in 2019 and is forecast to drop to US$17.626 million in 2023.
Lease rates for previous-generation narrowbody aircraft have grown since January 2021, but are still below January 2020 levels. A 10-year-old A321-200 was at US$178,000 pm in January 2021 and is expected to reach US$216,000 pm in July 2023, still below the US$231,000 pm level of January 2020.
New-generation widebody lease rates are rising with some lag, with more subdued value gains. The Airbus A350-900 was at US$925,000 pm in January 2021 with an increase to US$954,000 pm in January 2023, and IBA predicts this will rise to US$1,007,000 pm by July 2023.
Base value movements are more varied for new-generation widebody aircraft. The Boeing 787‑9, 787-10, Airbus A350-900 and A350-1000 continue to grow, whereas the 787-8 and A330-900 fell between 2019 and 2022 but stabilised into 2023.
The base value decline for mid-life widebody aircraft has eased, with the prospect of some market value recovery through the first half of 2023. A 12-year-old A330-300 was at US$20.04 million in 2022 and is predicted to be at US$19.967 million in 2023. Some lease rates are increasing, however, with a 12-year-old B777-300ER at US$314,000 pm in October 2022, and predicted to be US$350,000 pm by July 2023.
New-generation regional aircraft base values have grown throughout the pandemic. Looking specifically at the ATR 72-600, this has grown in market value whilst base value remains stable. In 2019, the base value for the aircraft was at US$21.6 million and is predicted to increase to US$22.011 million in 2023. Mid-life regional aircraft values have declined in the same period; however market value and lease rate performance are recovering for the popular models, including the ATR 72 and Embraer E-Jets.
Turning to converted freighter aircraft, base values are expected to drop, but less significantly than before. An 18-year-old A330-300 aircraft was at US$35.439 million in 2022 and is forecast to fall only slightly to US$34.920 million in 2023.
Summarising the current situation with global airline capacity (ASKs), the Americas region has now exceeded 2019 levels, with North America and Latin America at 104% and 102% respectively in 2023. Overall, global capacity is at 90% of 2019 levels. Areas for concern in the upcoming months are elevated fuel prices, workforce shortages, inflation and rising interest rates.
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