New narrowbody aircraft base values rose beyond the long-term trend into 2023, and lease rates are forecast to climb further this year, according to data revealed today by IBA the leading aviation market intelligence and consultancy company.
In its latest values webinar, IBA’s ISTAT-certified experts revealed that the base value of a new Airbus A220-300 was US$38.25million (m) in 2019 and will climb to US$39.227m in 2023. The base value of a Boeing 737 MAX 8 was US$52.306m in 2019 and is expected to reach $53.125million USD in 2023. Overall, base values of new narrowbody aircraft have risen between 1.1% and 1.6% across 2022 and 2023.
Lease rates for a new A220-300 were US$266,000 per month (pm) in January 2020 and had reached US$260,500 pm in January 2023. They are expected to grow to US$278,000 pm by July 2023. The 737 MAX 8 was US$305,000 pm in January 2020 and has increased to US$335,00 in January 2023.
For previous generation narrowbody aircraft, base values continue to show a natural decline although IBA forecasts the prospect for some market value recovery through the first half of 2023. A 12-year-old Boeing 737-900ER base value was at US$21.462m in 2019 and is expected to fall to US$19.865m in 2023, according to data from IBA’s Insight intelligence platform. The same age A320-200 aircraft was at US$18.713m in 2019 and is forecast to drop to US$17.626m in 2023.
Lease rates for previous generation narrowbody aircraft have grown since January 2021, but are still below January 2020 levels. A ten-year-old A321-200 was at US$178,000 pm in January 2021 and is expected to reach US$216,000 pm in July 2023, still below the US$231,000 pm level in January 2020.
New generation widebody lease rates are rising with some lag, with more subdued value gains. The Airbus A350-900 was at US$925,000 pm in January 2021 with an increase to US$954,000 pm in January 2023 and IBA predicts this will rise to US$1,007,000 pm by July 2023.
Base value movements are more varied for new generation widebody aircraft. The Boeing 787‑9, 787-10, Airbus A350-900 and A350-1000 continue to grow, whereas the 787-8 and A330-900 fell between 2019 and 2022 but stabilised into 2023.
The base value decline for mid-life widebody aircraft has eased with the prospect of some market value recovery through the first half of 2023. A 12-year-old A330-300 was at US$20.04m in 2022 and is predicted to be at US$19.967m in 2023. Some lease rates are increasing, however, with a 12-year-old B777-300ER at US$314,000 pm in October 2022 and predicted to be US$350,000 pm by July 2023.
New generation regional aircraft base values have grown throughout the pandemic. Looking specifically at the ATR72-600, this has grown in market value whilst base value remains stable. In 2019, the base value for the aircraft was at US$21.6m and is predicted to increase to US$22.011m in 2023. Mid-life regional aircraft values have declined in the same period, however market value and lease rate performance are recovering for the popular models including the ATR72 and Embraer E-Jets.
Turning to converted freighter aircraft, base values are expected to drop but less significantly than before. An 18-year-old A330-300 aircraft was at US$35.439m in 2022 and is forecast to fall only slightly to US$34.920m in 2023.
Summarising the current situation with global airline capacity (ASKs), IBA outlined that the Americas region has now exceeded 2019 levels with North America and Latin American at 104% and 102% respectively in 2023. Overall, global capacity is at 90% of 2019 levels. Areas for concern in the upcoming months are elevated fuel prices, workforce shortages and inflation and rising interest rates.