IBA's experts Jamie Davey and Phil Seymour took a deep dive into the latest trends in engine values in our latest webinar 'IBA Insight - How are engine values performing?'.
Our intelligence reveals that new generation narrowbody engines remain highly liquid assets, and that base values have exceeded pre-pandemic values recorded in 2019. Essentially - a complete post-pandemic recovery. Meanwhile, base values of current generation engines are recovering at a slower rate, with a notable delta remaining between older engine variants.
CFM LEAP-1A26 - 27% increase in base value - US$9.36 million in 2019, increasing to US$11.9 million in 2023.
CFM LEAP-1B27/CB2/28’s - 24% increase in base value - US$10.53 million in 2019, increasing to US$13.098 million in 2023.
PW1127G - 22% increase in base value - US$ 9.22 million in 2019, increasing to $US11.27 million in 2023.
Source: IBA Insight
CFM56-5B4/3 PIP - 11% decrease in current market value - US$ million 7.16 in 2019, decreasing to US$ million 6.37 in 2023.
CFM56-5B4/3 - 16% decrease in current market value - US$ million 6.33 in 2019, decreasing to US$ million 5.31 in 2023.
V2527-A5 Select - 9% decrease in current market value - US$ million 6.09 in 2019, decreasing to US$ million 5.54 in 2023.
V2527-A5 - 21% decrease in current market value - US$ million 5.22 in 2019, decreasing to US$ million 4.13 in 2023.
CFM56-7B26/3 - 17% decrease in current market value - US$ million 6.63 in 2019, decreasing to US$ million 5.49 in 2023.
CFM56-7B26E - 8% decrease in current market value - US$ million 7.85 in 2019, decreasing to US$ million 7.23 in 2023.
Source: IBA Insight
Base values for current generation narrowbody engines are yet to recover to pre-pandemic levels. The gap between base and market value is increasing over time, indicating market volatility. In 2019, market value to base value was at 107% for the CFM56-7B26/3. This has decreased to 93% in 2023.
IBA has one of the largest teams of certified senior appraisers in the industry who partner with aviation and financial sector clients globally to give independent advice on wide-ranging, complex asset valuation requirements.
“My grandfather rode a camel. My father drove a car. I fly in jet planes. My son will drive a car. My grandson will ride a camel.” This contested quote relates to the desire to diversify away from an oil-export-dominant economy. Following Qatar and the UAE, it’s now a focus for Saudi Arabia. Aside from the emergence of Avilease last year with the announcement of a 12-aircraft SLB with flynas, the Saudi Public Investment Fund also launched Riyadh Air this week. This was closely followed by the $37Bn list price order for up to 121 x 787-9s to be split between the airline and Saudia. That’s a lot of capacity, and links closely with the Saudi vision to carry 330m passengers by the end of the decade (with close to a third visiting the country). Having spent much of my childhood in Riyadh and witnessing the speed of development, I have no doubt that they can succeed. Might this trigger a Middle Eastern power play whereby Emirates, Etihad and Qatar fight against the Saudi growth to destabilise the profitability for European and Asian carriers hoping to recapture market share? The combined carriers already have 465 passenger aircraft in active service, 95 parked or in storage, and 307 on backlog, I sense that, given their deep pockets, growth will proceed at any cost.
We are pleased to announce the launch of IBA’s first Engine Market Intelligence Reports. Combining our independently verified data from IBA Insight with IBA’s expert advisory opinion, these dynamic reports are simple, comprehensive, and regularly updated to reveal prevailing trends for major aircraft engine types. Our new engine reports complement our existing Aircraft Market Intelligence Reports, delivering the most holistic aviation intelligence on the market. What's included? Status, production, and retirements in the engine fleet Top in-service operators and engine models Common aircraft / engine combinations Engine types by airline Market values and lease rates Utilisation comparisons between engine types Backlog and delivery schedules Operator data and analysis Asset liquidity Expert commentary from our ISTAT-certified appraisers Download our sample report for the CFM LEAP-1A