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.
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.
AuthorSee full profile
Following on from last week's session where IBA presented their approach to valuations and lease rates, our panel take a deeper dive looking specifically at commonly traded aircraft types. Topics covered included; IBA's opinion on likely market performance in the near and long term, which assets types are more vulnerable and a 30 minute Q&A session with our panel. The webinar was chaired by Phil Seymour, an 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. Our senior ISTAT appraiser team also review the impact from Covid-19 on future asset performance for specific Narrowbody and Widebody aircraft. If you have further questions please contact: Mike Yeomans
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
IBA Group and Split Rock Aviation have combined forces to provide a review of the ABS market and the stress which travel restrictions from Covid-19 are placing on the Aviation ABS structures. This session is invaluable for all investors in aircraft and engine ABS structures. Clay Smith from Split Rock Aviation and IBA's Phil Seymour, discuss which transactions may be most at risk and what investors should expect to see going forward. This session is invaluable for all investors in aircraft and engine ABS structures. Topics covered include: An overview of the ABS market Structural issues of ABS deals, such as default triggers and cash traps, and how these impact the various tranches of investors Asset values and future maintenance events Airline strength, asset performance and servicer issues The slide deck is also available to download If you have further questions, please contact: Phil Seymour
If you have already been provided with your InsightIQ credentials, click InsightIQ. If you are looking for IBA.iQ, click IBA.iQ.