A320ceo and B737-800 Values Remain Stable

March 4, 2019

With less than 70 A320ceos remaining to be delivered and only 26 B737-800s on backlog, it would be expected that values would be falling by more than average but the last year has seen a relatively modest fall.

As of the end of January 2019 there had been 4770 orders for the A320ceo and 4704 deliveries, 1799 A321ceo orders and 1718 deliveries, 4991 B737-800 orders and 4965 deliveries and 505 B737-900ER orders and 490 deliveries. This means that production of both types will effectively cease this year with production increases for the replacement A320neo and B737MAX families. The average annual fall in the value of an aircraft in production approximates eight percent but for an aircraft that is out of production the decline can be much higher. Over the last year the rate of fall for the newer A320ceos has been less than seven percent although for those built before the mid 2000’s and featuring lesser engine types, the fall has been nearer ten percent which is still reasonably low. For the B737-800, the fall has been slightly higher eight percent over the last twelve months for a young example versus 11 percent for a mid 2000’s aircraft. With the values of the A320neo and B737-8 falling at a lesser rate however, the gap between similar vintage aircraft of the incoming and outgoing models is widening.

The competition among lessors and the still low interest rates have had an effect on values as lease rentals have fallen but more recently lease rentals have stabilized thereby allowing some breathing space for values.

The fall in values is also due to the price of fuel being relatively low although exchange rate issues and recent increases in the price of fuel have contributed to the collapse of a number of notable operators who use the A320ceo and B737-800. The release of used aircraft onto the market has not seemingly affected either rentals or values as demand still exceeds supply. The delay in the deliveries of the A320neo and the B737MAX have played a part in keeping values higher than expected but the gap in operating efficiency between the incoming and outgoing models is not so high as to accelerate the displacement of the latter.

For the next few years, it is expected that the demand for the younger A320ceos and B737NGs will remain sufficiently strong as to allow values to continue to exhibit a slow rate of decline before facing a more significant fall as relative age and operating efficiency take their toll.


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