Ask the Appraiser - valuing the COMAC ARJ21

Image: Peng Chen

Marking its first delivery to Chengdu Airlines, the launch customer in 2015, the COMAC ARJ21 is the Chinese manufacturer’s debut into indigenous regional jet production.  Whilst still in the early stages of the product cycle, IBA Insight Fleets reveals the ARJ21-700 has an in-service fleet of 83 aircraft, with around 500 remaining on order.

Combining the latest aircraft values data from IBA Insight’s Aircraft Market Intelligence Reports with the opinions of our experts, we predict that the aircraft’s market value and forecasted base value curves are likely to remain stable in the long term. In IBA’s opinion, the market value of a 6-year-old ARJ21-700 aircraft is USD$12,020,000 in the second half of 2022, around 9% below base value.

“The COMAC ARJ21-700 has a limited, but relatively well-protected market, with the in-service fleet and order book heavily concentrated within domestic China. The ARJ is not yet certified outside of China, which limits its addressable market. However, the aircraft is an important precursor to the COMAC C919 narrowbody, which has recently been certified for operation in China. IBA expects the C919 to offer greater competition to established Airbus and Boeing products within the Chinese aviation market.”

Mike Yeomans – Director - Valuations

IBA has one of the largest teams of certified senior appraisers in the industry. We provide independent advice on wide-ranging, complex asset valuation requirements. From strategic fleet selection, transaction due diligence, portfolio appraisal, and operational decision-making through to annual portfolio and financial compliance monitoring, we'll have you covered! IBA is proud to be the Appointed Appraiser for COMAC ARJ21 Programme.

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Deliveries, Covid, and the secondary market outlook for the ARJ21

According to aircraft order data from IBA Insight, 12 ARJ21-700 aircraft have been delivered to four operators, all of which are based in China. These are China Southern (4 aircraft), Air China (4 aircraft), Chengdu Airlines (3 aircraft) and OTT Airlines (2 aircraft). IBA Insight flights further reveals that Nanchang, Shantou, Yueyang, and Chengdu are the destinations most frequently served by the aircraft.

“The bulk of the Covid-19 pandemic appears to have had minimal effect on the ARJ21 program, with deliveries in 2020 being almost twice at 2019 levels. That said, the continued lockdowns and ‘Zero Covid’ policy do now appear to be having an impact, most with deliveries notably slowing following a rise in cases after March 2022.”

Jie Zhou – Manager, Market Analysis

The number of secondary market transactions for the ARJ21 has also shown steady growth since 2017. Initially featuring sale and leaseback events, transactions in recent years have diversified to include sale and finance lease transactions.