IBA Insights


IBA’s A330 Market Outlook, February 2020

The result of 27 airlines ceasing or suspending operations in 2019 has been an increased supply of aircraft into the secondary market. The storage level of widebody commercial aircraft surpassed that of widebody and narrowbody aircraft combined since 2014 (excluding the Boeing Max in 2019). Additionally the number of parked and stored Airbus A330s, comprising both Airbus A330- 200 and A330-300 models, reached 161 in January 2020, representing a 13% storage level. As a result of this oversupply, lease rates and market values have been suppressed. However, the current low lease rates of A330s may open more opportunities for the low-cost long-haul carriers.

Storage Levels 2005-2019 (excludes Boeing 737 Max)

The widebody leasing market is less fluid than that for narrowbodies and is heavily dominated by sale leasebacks for new deliveries. Despite the Airbus A330ceo’s leasing performance being the lowest on record, the number of new lease starts for the family still shows how well the aircraft performs for operators. Considering these current low lease rates, we expect some carriers to take advantage of their ability to secure such a capable aircraft for a fraction of its usual cost. Our market intelligence platform IBA.iQ indicates that the number of aircraft starting or terminating their leases over the last 15 years has been higher for the A330-200 variant than the A330-300. Asia-Pacific remains the most popular region for the A330-300 model, while the A330-200 has reaffirmed its popularity in European markets. In terms of lease ends, there have been more events occurring in North America and Europe & CIS for both A330 models.

Lease Start and end dates A330

The number of A330 part-outs has increased significantly over the last decade, totalling 45 aircraft in January 2020. Since the first A330 aircraft parted-out in 2012 with Malaysia Airlines, there have been 24 scrapped A330s originating from Asia-Pacific based operators including Malaysia Airlines (8), Philippine Airlines (5), Vietnam Airlines (5), Thai Airways International (3), China Eastern Airlines (1), AirAsia X (1) and Batavia Air (1).

A further eight A330s were parted-out by six European airlines, three operators shared seven scrapped A330s in the Middle East and two Latin American operators have parted-out six A330 models so far.

Part-out activity - Airbus A330 Family

The Airbus A330P2F conversion programme, launched in 2012, is a collaboration between ST Aerospace, Airbus and their joint venture EFW. So far, they have delivered eight A330P2F freighters to three customers. Detailed information on aircraft converted up to now is shown in the table below.

IBA.iQ shows 14 Airbus A330s were retired in 2019. As the lease rates and market values are increasingly suppressed, more A330s are likely to be attracted by these freighter conversion programmes.

A330 Fleet by Reg

A build-up of bankruptcies, fleet management decisions and lease ends have heavily impacted the A330 fleet’s lease rates and market value since 2015. The effect of lease returns, including relatively young aircraft, has significantly influenced rates across the board. The bankruptcies of WOW Air, Jet Airways and XL added additional units to the market and caution still surrounds both Hong Kong Airlines and SAA who hold 24 units between them. The aircraft’s high capability ensures its continuing attraction and some operators are taking advantage of rates normally reserved for much older assets to secure relatively young aircraft. With the outbreak of the coronavirus Covid-19, operators in China are facing huge challenges to their revenue generation due to lack of passenger demand. This will create more speculation over the heavily troubled HNA Group, which currently operates 45 A330-300 and 31 A330-200 aircraft in its fleet.

Values of mid-build A330-300s have softened by over 30% in some cases and early builds are likely to face part-out due to the limited demand. Nevertheless, IBA expects there will still be demand for re-leases of the earlier deliveries should they become available.

Turning to the A330-200 model, IBA has seen a similar 30% reduction for early- to mid-builds and up to a 35% decline in lease rates for mid-build A330-200s.

Pricing correction is required for many older A330 aircraft, as storage levels have reached record proportions and associated lease yields cannot justify current values. Opportunities to convert ageing A330s could help to reset its depreciation profile and prompt a reassessment of market expectations long-term.

Airbus A330 Aircraft Lease Rates Performance – Constant Age Zero and 10

To find out why IBA.iQ is fast becoming the leading online data intelligence platform, register for a demonstration or free trial here.

Please contact Mike Yeomans or Jie Zhou if you have any questions, comments or feedback: mike.yeomans@iba.aero jie.zhou@iba.aero


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