C

This site uses cookies.

Some of these cookies are essential, while others help us to improve your experience by providing insights into how the site is being used.

Necessary Cookies

Necessary cookies enable core functionality. The website cannot function properly without these cookies, and can only be disabled by changing your browser preferences.

Analytical Cookies

Analytical cookies help us to improve our website by collecting and reporting information on its usage.

X

Articles

Videos & Podcasts

News & PR

Events

On Demand Webinars

Back to ArticlesNext Article Previous Article

23/04/2020

What Percentage of Aircraft Within ABS Structures Are Inactive? April 2020

ABS Portfolios - What is the Current Level of Fleet Utilisation?

 

Using IBA.iQ Fleets, IBA's award-winning advisory team show that over 60% of aircraft within ABS structures (launched after 2015), are either parked or stored. In comparison, 52% of the global passenger fleet is inactive, indicating that aircraft within current ABS portfolios are less active than the global fleet average.

 

As a result, IBA expects to see cashflow pressures within aircraft ABS structures as operators seek rental payment holidays and groundings cause uncertainty in the level of unplanned maintenance costs.

 

This uncertainty has the potential to cause defaults in ABS structures in the medium term (six to 12 months from now) once the impact of holiday rentals, early returns and the total cost of unplanned maintenance impacts overall liquidity.

Share this article

LinkedInTwitterFacebookEmail

What is the Utilisation by aircraft groups with ABS structures?Looking at aircraft groupings, Narrowbodies show the highest level of utilisation amongst ABS portfolios, with 40% of the fleet active. As you would expect, the Widebody aircraft class has been hit the hardest with Covid-19 severely impacting long-haul and international travel, only 27% of the fleet is active.

 

 

Scheduled Lease Ends within ABS Portfolios Looking at planned Lease Ends scheduled by year for aircraft within ABS structures, IBA.iQ Fleet data shows a large number of aircraft scheduled to return in the next four years - up to 600 aircraft. How many of these leases will be extended or returned early remains to be seen over the coming months. IBA anticipates the number of unplanned lease ends will increase as aircraft are grounded and operators face financial challenges, ABS structures will face significant costs which will not have been planned or modelled. These include ferry flights, maintenance, redelivery, reconfiguration and regulatory liaison.

 

Aircraft ABS structures are set to suffer the effects of aircraft groundings in the year ahead. A combination of prudent cash management and active engagement with lessees will be crucial to effectively managing outlooks in the medium and long-term.

If you have any further questions, comments or feedback please contact Mike Yeomans

 

Access the insight and data you need to maximise aviation investments, IBA.iQ is our online analysis platform offering essential fleet, values and market intelligence for the global aviation leasing, operating, finance and MRO community.

Sign up for a system demonstration

 

Author

See full profile

Related content

IBA's Webinar: Covid-19 - aircraft values and lease rates: What are my aviation assets worth?

Combining IBA's historical data and experience of several downturns over the past 33 years, IBA's senior ISTAT appraiser team review the impact from Covid-19 on future asset performance.   The webinar was chaired by Phil Seymour, an IBA ISTAT Senior Appraiser Fellow and former ISTAT International Appraisers' Program Chairman . Phil was joined by Stuart Hatcher and Mike Yeomans - two of IBA's Senior ISTAT Appraisers and David Archer, IBA's Senior Engine Analyst.   IBA present their approach to valuations and lease rates, share opinion on market performance in the near and long term and which assets types will be impacted most.Our panel of experts share their experience and views on values and lease rates.   This interactive session, What are my aviation assets worth, will among other things consider:   The approach taken by IBA's award winning appraisal team to valuing aircraft and engines in the near term Provide examples of the impact on widebody and narrowbody aircraft values in different scenarios including value in use, future base value, part out, distressed sales and lease encumbered valuations Why IBA is taking a shrewd approach and not cutting values without tangible evidence and market transactions, but taking into account evidence from previous downturns Your pain points and burning issues by allowing 30 mins for Q&A with our panel   The slide deck is available to download here. If you have further questions please contact: Mike Yeomans  

Back to ArticlesNext Article Previous Article

Login

If you have already been provided with your InsightIQ credentials, click InsightIQ. If you are looking for IBA.iQ, click IBA.iQ.