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Regional Jet Values Still Face Tough Time

June 10, 2019

The orders for regional jets continue to remain sporadic even with the arrival of new types and this makes for difficult times for values as this suggests that operators are finding that the used market has plenty to offer.

Values are in Millions of US Dollars and are based on The Aircraft Value Reference published by The Aircraft Value Analysis Company Ltd (AVAC) www.aircraftvalues.net www.aircraftvalues.com. An Aircraft Rating has been included reflecting the suitability of the type for asset based financing over the medium term with a range of A++ (best) through to Eā€”(worst).

Regional Jet Current Values US$m ā€“ June 2019
Aircraft Age Value Rtg Trend Analysis
Avro RJ70 19931996 0.50.7 E With four engines, the market for the type was always difficult with only 70 seats proving difficult to achieve profitability. The aircraft is not a type that is suited to asset based financing. The market for the RJ70 remains limited to a few operators, as indeed has been the case ever since it was introduced.
Avro RJ85 19931998 0.81.1 E+ The market for the RJ85 is being eroded by the much more readily available twin jets which offer considerable operating advantages over the four engined Avro. The market for the RJ85 has been weak for many years but in terms of capital cost versus new offerings, the RJ85 represents something of a bargain. A figure of more than $2 million can apply to types in good condition but these are rare.
Avro RJ100 19931998 0.91.3 E+ The market for the RJ100 is limited with a third either in storage or having been written off. Values are stable to some extent but there can be considerable variation depending on condition. To some extent it straddled the regional and mainline market such that only a few were capable of using the aircraft given that the seating capacity could be over 100 thereby equating more to the B737-500.
CRJ100ER 19931998 0.30.6 E The values have not really changed which is because they are so low already. The market for the CRJ100ER is extremely difficult and seeking to remarket the type requires considerable stamina and persistence. The CRJ100ER started the 50 seat revolution although there were pocket rockets in the 1960s ā€“ the BAC1-11, the DC9-10, or F28 for example.
CRJ200ER(U.S.) 19961999200120032005 0.51.01.31.41.6 E The values of the youngest aircraft are most exposed and these have experienced a notable fall in recent time. The issue of age is of lesser relevance to the type. There can be a wide variation in value depending on condition with those in better condition able to command higher values. It has to be noted that those potential buyers outside of the U.S. prefer to acquire non U.S. aircraft as transferring maintenance and registration can be easier.
CRJ700(U.S.) 2000200320052011e 3.03.94.411.0 D+D+ The 70 seat market continues to lose favor as operators dispose of such assets in favor of larger aircraft. In the U.S. operators are acquiring aircraft that just match the scope clause limits. The market for the 70 seaters is not what it once was and values are declining by a reasonable percentage.
CRJ900(U.S.) 200220052011en2016ng 4.26.512.019.0 D++C– The values of the CRJ900 have experienced a considerable fall as has the Aircraft Rating. The cause of the decline lies with the pricing of new CRJ900s and advancing age. Bombardier has sold off the CSeries and the Dash8-400 which leaves it with the CRJ. This is a type that is being marketed on the basis of a proven design at a low price. This inevitably has negative consequences for values. It is very fortunate for the type that scope clauses have prevented operators from ordering newer and much environmentally friendly aircraft.
CRJ1000 20112014 11.019.0 D++ The Aircraft Rating has fallen in the context of non existent orders and backlog. The problems of the type are all the more evident with the arrival of the E2. The delay to the MRJ provided a measure of respite but not much.
ERJ135ER(U.S.) 19992001 0.61.1 E The values of the ERJ135 can experience considerable variation with those in the U.S. being lower while those used elsewhere in a corporate shuttle role being much higher. The values have remained stable but those at the upper end will see increasing value convergence. The 30 seater commuter jet is always an issue and it remains to be seen whether Turkey can make it work.
ERJ145ER(U.S.) 1996200120032005 0.71.21.31.9 E+ There is little to comment on the ERJ145 as the market continues to contract making remarketing difficult. The aircraft continues to enjoy support in the U.S. to some extent because of the nature of the relationships between the major airlines and regional operators. There are a large number on the market most of which originate in the U.S. and may not be easily exported to other countries where most buyers reside.
Embraer 170Std 2003200720112014 4.78.512.015.0 D+ Values of the E170 continue to decline as the market seeks larger aircraft that offer better seat mile costs. The age of the aircraft is also an issue as is the cost of engine maintenance. E175 has become much more favored due to scope clauses and there is a concern that the 70 seaters will face greater weakness going forward. However, used examples are being placed although it can take time. The MRJ70 represents a formidable competitor when it finally enters service.
Embraer 175 200420102016E 6.413.523.0 C-C+ Values of the E175 are easing back even though the orderbook has improved significantly in recent years. Just as the concentration of the CRJ200 in the U.S. caused problems for residual values so too is the attraction in virtually a single country likely to have repercussions for residuals.
Embraer 190 2005200820112014 7.712.017.021.5 C Values of the E190 are facing considerable weakness as a larger number are entering the market for one reason or another in the near term. The cost of engine overhauls has been an issue and this has proved to be an expense too far for some operators when a few passengers can make the difference between a profit and loss.
Embraer 190E2 2018 33.1 B The E2 has entered service and is proving to be very efficient in service although there are the usual teething problems. The residual values of the E190E2 may not remain that strong going forward if the orderbook does not improve.
Embraer 195 200620112014 9.617.022.0 C- The values of the E195 should be performing much better but unfortunately this is not the case as demand is limited on the used market. The arrival of the E2 offering much improved economics cannot be ignored. The capacity of even the existing E195 should not be underestimated as it offers near mainline seating. The larger capacity may allow operators to cope more effectively with above trend traffic growth.
Embraer 195E2 2019 37.0 B- The E195E2 may have entered service but the type has a long way to go to provide reassurance with regard to residuals. The size is such that it straddles two market segments although the maximum seating capacity takes it into A319 territory.
328JET 19992001 0.10.2 E- A good aircraft that perhaps did not have the best of starts. Value convergence has been apparent for some time and the market is now very restricted. The basic design is now to be upgraded by Turkey which is an interesting development given that this segment of the market has not produced any winners.
Fokker 70 19951998 0.50.7 E- The Fokker 70 continues to keep going. On shorter sectors with limited traffic, the Fokker 70 has some utility but any asset value is limited. The installation of a center tank usually warrants a premium and is considered to be much more desirable.
Fokker 100 19871993 0.50.7 E- The Fokker 100 faces continued problems as the market favors new types. Even though a value is indicated this is more a price as the absence of asset based lending makes a value something of an irrelevance. The number in storage is significant, most of which will never return to service.
Commentary reflects changes from last update of March 2019

 

 

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