Our experts shine a light on the value and lease rate outlook for the ARJ21 and look at the wider market outlook for the Chinese regional jet.
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.
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.
IBA’s valuations and appraisal services have been nominated in the ‘Appraiser of the Year’ category in the prestigious Airline Economics Aviation 100 Awards. IBA has held the title 5 times, most recently in 2022, and we are proud to be recognised by our clients for the valuations services we provide. Voting for the 2023 awards is now open. If you like what we do, and have found our insights useful, would you consider taking a few minutes to vote for us?
In the first in our series of ‘Ask the Appraiser’ webinars, our experts Jonathan McDonald and Mike Yeomans examined the trajectory of freighter values, identified the hottest trends in P2F conversions, and explored the impact of macroeconomic factors on the air cargo market.
IBA, the award-winning aviation analytics and advisory company, has been honoured as Appraiser of the Year 2022 in the renowned Airline Economics Aviation 100 Awards. This is the fifth time that IBA has won the prestigious award, having previously received it in 2012, 2018, 2020 and 2021. The Awards were decided upon by a panel of expert judges. This year, Airline Economics asked the industry to consider companies' response to the COVID-19 pandemic including their ability to raise additional funds, manage a new operating environment as well as its overall crisis response and future resilience. Throughout 2021, IBA performed over 8,000 appraisals and portfolio valuations, and continue to appraise over 90% of asset backed security (ABS) and enhanced equipment trust certificate (EETC) structures. During the year, the company strengthened its valuations offering with the appointment of Geoffrey van Klaveren as Managing Director, Advisory, to oversee all of IBA's professional services, along with additional team members in the USA, China and Hong Kong . Phil Seymour, President of IBA, says: “Valuations have been at the heart of what IBA does since our foundation, and we are deeply honoured that this has been recognised by our clients with this prestigious award.” Over the past 12 months, IBA's InsightIQ data and intelligence platform provided integrated and intuitive flight analysis, tracking over 35 million flights and over 65,000 commercial aircraft per year. The platform contains over 65 years of commercial aircraft and engine proprietary fleet data, values, flight utilisation information, market data, carbon emissions modelling and aviation news. IBA launched several enhancements to the platform in 2021, including the Carbon Emissions Calculator which enables users to analyse and compare airlines' and lessors' Scope 1 emissions profiles. Additionally, IBA delivered a range of industry-attended webinars led by their ISTAT-certified experts. Topics included the implication of Aviation's Net Zero 2050 target and tracking the global recovery of widebody and narrowbody aircraft and engine values. These webinars support appraisers by providing a comprehensive market perspective. For more information about IBA's Advisory and Valuations services visit: https://www.iba.aero/advisory-and-valuations/valuations/ About IBA IBA has over 30 years' experience in delivering independent, expert business analysis and intelligence on the aviation sector. Established in 1988, it provides a wide range of services including InsightIQ, a one-stop intelligence platform combining speed, accuracy, visual analytics and intuitive navigation. IBA advises prominent investment funds and banks, aircraft leasing companies, operators, manufacturers and MROs. In March 2021, IBA was named ‘Appraiser of the Year' by Airline Economics for the fourth time. For more information, visit www.iba.aero IBA media contacts Charlie Hampton / Faye Clarke Email: [email protected] / [email protected] Mobile: +44 (0)7884 187297