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Aircraft Liquidity Still Fails Widebodies As Product Line Transitions

August 5, 2019

The liquidity of aircraft represents a significant factor in determining the values of existing types but can also illustrate the potential for types currently held in high regard.

There are few types that have the highest rating in the period 2011-2018. The liquidity seeks to reflect how easy it is to remarket an aircraft and whether lease rentals are likely to require a discount. There are many types, mostly those that are no longer in production, that have experienced problems in the last five to seven years and not solely due to the financial crisis. With virtually entire product line having been replaced during the course of this decade, then there are certain to be problems for many aircraft types.

The period 2006-2010 however, saw the liquidity of a number of types recover before experiencing significant problems. The B747-400F for example has seen considerable volatility and with the improvement in airfreight may yet see another period of improved fortunes though passenger aircraft are rarely so fortunate as to experience more than a single recovery period after production ceases.

The A380 has been experiencing problems in the last two years as the release of aircraft onto the used market has coincided with airlines becoming more risk adverse. Until such time as A380s are placed then the worst liquidity rating will persist. For the B787-8 then for the liquidity rating may deteriorate further.

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