IBA recently updated its analysis around overspend in relation to redeliveries. As the infographic on page 9 highlights, overspends have increased since 2016, with engine costs being the key driver.
As a result, we thought it useful to update our 2016 pulse survey, where we canvassed a selection of Lessors and Lessees on five questions:
1. What is the primary reason for a late redelivery?
2. Which area of the aircraft is most challenging to redeliver on time and on budget?
3. Lessors, how often does the Lessee engage too late in the process?
4. Lessees, how often do you find your internal teams engaged too late in the process?
5. What are the key issues that Lessors face in 2017?
As part of IBA’s continuing research into the challenges around transitions, we revisited these questions and added two more in order to capture changes in the market, or shifting sentiment:
6. What changes to end of lease trends in narrowbodies have you noticed in the last 12 months?
7. What changes to end of lease trends in widebodies have you noticed in the last 12 months?
In the previous report we received 72 responses, with a split of 65%/35% for Lessors and Lessees. This time, we received an increased number of 140 responses, with a more even split of 53% Lessors and 47% Lessees.
Key conclusions from the research include:
- Both Lessees and Lessors agree that the redelivery process is not started early enough.
- Records and engines top the list of the most challenging elements of a redelivery.
- Resource, liquidity and increased returns are key concerns in 2018.
The whitepaper is available to download by clicking here and filling out our easy to use form.