Assumptions

The rates for the A300F/C4 are something of an irrelevance in view of only three being in active service even in these best of times. The experience of the type from the 1990s through to today however, gives an indication of the type of trend that lease rentals for converted freighters can experience in the 20 years from conversion. The first ten years from the point of conversion will likely see stability of rentals but after lease expires and due to advancing age, rates are likely to fall, particularly if conversions are no longer taking place.

The market for the -600 has been weak for a decade or more and as such placing a lease rental on the type is something of an irrelevant exercise. The type was always something of stop gap measure for Airbus. The A300B4 had been developed and they needed a steppingstone to a more flexible variant. The -600 was developed at the same time as the A310. The most notable advance was in terms of providing a two-person flight crew via an electronic centralized aircraft monitor. Indeed, the flight deck was created by car market Porsche. The wing was also improved, and the wingtip fences were added. Carbon brakes and new engine variants also featured. The range of the -600 was somewhat lacking particularly compared to the emerging B767ER and as such orders for the type were overshadowed by those for the -600R.

A few -600Rs are still in service in Iran but of the 26 listed only some seven are active. The rates for the -600R – originally designated the A300B4-600ER – have been very low for a number of years, if not a decade. The -600R differs from the -600 in having a 1,620 U.S. gallon fuel tank installed in the horizonal stabilizer which necessitated a computerized fuel transfer system to maintain the center of gravity. The aircraft was able to be used on 180 minute operations which provided a measure of competition with the B767-300ER that was then entering service in the late 1980s. Placing the aircraft has become an issue and even spares may be an issue given the sanctions in place for some countries.

The A300-600RF originally attracted little interest from the cargo airlines because of the B747 and the glut of widebody passenger aircraft that were suitable for conversion (reminiscent of todays market). But in 19901 FedEx placed an order for 25 A300-600RFs which was later increased to 35. The A300 model always lent itself to the freighter role at least in terms of capacity not least because of its lower hold pallet and container capability. Because of the strength of the freighter market, rates have continued to remain steady but it must be recognized that the fleet is aging and once this peak passes there will be lesser enthusiasm for the type.

The market for the A310 freighter has always been lack luster. Airbus were particularly disappointed with only Martinair ordering a since A310-200C. Again, the lack of interest was a function of the market being flooded by surplus B747 freighter capacity in the 1980s. But it was in the 1990s that FedEx again placed an order for the conversion of 41 A310s which were delivered between 1994 and 1998. As FedEx moved to newer equipment in the previous decade, the A310 freighters lost their relevance with only some four now remaining in commercial and non-commercial service. The rates may be stable but they are at low levels.

The market for the -100 has not been as buoyant as for the -300 but the Delta order has seen interest in the variant from a leasing perspective. The aircraft have been delivered to Comlux as the ACJ220, Delta and Swiss thus far but Air Vanuatu, Ibom Air, ITA, Odyssey have yet to receive their units with ALC, LCI and NAC being lessor customers. The delivery rate of the -100 has naturally been focused on the Delta order. The lease rentals have improved slightly but perhaps not to the same extent as the -300. The decline due to Covid has not been as severe as many other types because of its recent service entry and limited customer base. Some improvement should still be expected.

The market for the -300 is much more extensive having essentially taken over from the A319. There are still over 400 on order with a variety of operators and lessors. With some 150 already in service with Air Canada, Air France, airBaltic Air Tanzania, Delta, Egyptair, Iraqi Airways, JetBlue, Korean and Swiss, the operator base is expanding. In terms of those operating lease, some 43 are currently leased representing a third of the fleet. The lessors are still due to receive a number of -300s and as such the proportion leased can be expected to increase. The rates dropped by one of the least amounts due to Covid and a significant amount of the loss has been recouped. There are very few in storage.

Even though the oldest A318 is just less than 20 years of age, some 31 have already been scrapped leaving 28 active and 21 inactive. The type has been used as the A318Elite but Air France continue to operate a number. There are 17 A318s that are leased with the majority being leased by Air France via FTAI Aviation. The market for the A318 has never been promising even less so for the PW6000 powered aircraft which soon suffered. The arrival of the A220 is already an issue for those remaining in service with perhaps the corporate role beckoning.

The lease rentals of the A319 have improved to some extent but any further improvement is only likely to be the result of an increase in interest rates than due to the recovery of the market. While lease rentals are still below pre-Covid projections for 2022, the emphasis is clearly on newer aircraft types given the price of fuel and availability of more capable assets in the form of the A220. There are some 453 on operating leases which are leased to 70 lessees but of these more than twenty percent – 100 units – are still in storage albeit being lower than the 120 of six months ago. However, the lessors and lessees are in abundance and this makes placement that much easier even if there has to be some flexibility with regard to rentals. With such a breadth of age then the older types do tend to drag down the lease rentals of the newer as there is little point in paying a substantive premium if the old and new do essentially the same job.

The longer an aircraft remains in storage the less likely that it is to return to service with three years being the usual measurement. Of course, the Covid Event is perhaps adding another year or eighteen months onto this metric but nonetheless a large number of older A320s will not return to service. The lower lease rentals that the older A320s attract have a negative effect on rates for the younger A320ceos. There are over 2,200 A320ceos which are leased to 208 lessees. Of these, 511 are inactive which is a slight improvement from the 535 of six months ago. The number inactive therefore still equates to nearly 25 percent and this is preventing a wholesale improvement in rentals as indeed is the delivery rate of new A320neos. The lessors are having to employ a number of tactics to keep aircraft with some lessees and extract at least some revenue but some lessees are not generating any revenue. Lessors need to keep aircraft with existing lessees rather than seek to move them on but sometimes there is no alternative to repossession.

This is where the main focus of attention lies in terms of the recovery in lease rentals. Even though production rates are set to increase, the high price of fuel is forcing operators to seek the most efficient of aircraft. The lessors currently lease some 1,000 A320neos of which less than 90 are inactive clearly indicating the preference to operate. Air China AirAsia, Go First, HK Express, Tiajin Airlines, all have A320neos laying idle but some of these are in storage because of the certification issue. Nonetheless, it is important to note that the recovery process is not uniform and just as Covid featured a Mexican Wave effect in terms of closing air transport so too does the recovery fearture a similar pattern.

The market for the -100 was never favorable and today there are only 45 in service of which a single unit is on an operating lease. The demand for the -100 was limited because the original users were mainly a few flag carriers. In the 1990s, the focus was on the 120-140 seat market with demand patterns not able to support 180 seaters. The range of the -100 was also limited and operators were pursing market share via frequency. Rates have not materially improved from the lows caused by Covid and nor are they expected to do so.

The demand for the A321-200 may appear to be strong but this needs to be segmented. The older -200s, particularly with lower MTOWs, can see much lower than headline rates. The emphasis is therefore on younger -200s with SelectOne / SelectTwo or /3 and /3 PIP engines featuring at least a MTOW of 89 tonnes. Of the some 1650 serviceable units, some 721 are on operating leases. Of these 582 are active leaving 136 or 20 percent inactive. The move towards the A321neo is all evident as the operating economics are that much better. Nonetheless, the lease rates for the A321-200 have improved to some extent from the lows of nearly two years ago and there is room yet for a further improvement for those built after 2007.

There is now a growing emphasis on the A321 not least because there is no real competitor from Boeing. The higher weights of the A321neo offer much improved operating flexibility as do the more efficient engines. Combined with more seats, the A321neo is serving to skew the market towards larger seating capacities although the number of deliveries remains below that of the A320neo. Of the some 670 A321neos that have been delivered more than 500 are listed as being on an operating lease with only 42 being inactive. The 514 on operating leases are leased to 69 operators. The rates are improving and the XLR in 2023 will only improve the appetite for the A321neo. The ACF is now the standard but the discount for the non ACF is some two percent. This is because most operators do not require to operate the aircraft with more than 220 passengers.

The A330-200 continues to face problems in terms of demand as indeed do most widebodies. The age distribution of the -200 was lending itself to replacement even before Covid and with the arrival of new types, lease rentals were already suffering. There may seem to have been a number reabsorbed back into the fleet and there have been a number of acquisitions but this has been on the basis of low rentals. The international market continues to suffer in terms of traffic and operators continue to store or dispose of older widebodies. Of the 220 -200s that are on operating lease, a third are in storage. Another 35 are on finance leases of which ten are in storage. Even those that are in service may be used on freighter flights or be experiencing very low load factors. The type will have great difficulty in recovering. However, there is an argument that the considerable reduction in the delivery rate of new widebodies means that are traffic builds again in the international markets there will be a shortage of capacity.

Production is coming to an end in favor of the -900 which is proving to be very capable. Of the some 750 -300s, nearly 300 are on operating leases and of these some 60 are in storage equating to 20 percent. Another 130 are on finance leases and of these 26 are in storage. Again, some continue to be used on solely freighter services which underlines the weakness of the passenger market. The lease rentals of the -300 were under pressure before Covid and while there has been a modest improvement, rates continue to be shadow of their former levels. The issue going forward is that as newer widebodies continue to be produced, there exists the possibility that the new aircraft will act as replacement capacity.

A total of 70 have already been delivered even as delivery rates have slowed. The -900 is proving very popular with lessors with nearly 60 being on operating lease with more deliveries to lessors scheduled. For those in storage still, these are operated by Azul, Citilink, Garuda, Lion Air, Sunclass and Thai AirAsia with lessors of Avolon, Park, BOC Aviation and ALC. The lease rentals of the -900 fell due to Covid and have recovered to some extent but there remains a considerable difference with the rates being secured before Covid.

A good aircraft – for a few. In recent “decades” it has served more as stop gap measure.

The four engines of the A340 provide some advantages in terms of eliminating the need for ETOPs. The type has been used as a temporary solution for operators waiting to receive newer twins. There were attempts to revive the -300 but these did not amount to much. Lease rentals are likely to only go in one direction.

Placing a lease rental on the -600 is something of a futile exercise. There is only one on an operating lease to Air Atlanta Icelandic which is in storage. The SPV is LFC 444 Ltd. There are only eight in active service. The A340-500 is no longer of relevance.

The market for the -900 is perhaps among the strongest of any widebody. Of the approximate 400 that have been delivered – delivery rates have slowed during the pandemic – 60 are in storage. Of ther 407, a total of 174 are on operating lease and of these 42 are in storage. Another 53 are on finance leases of which none are in storage. The lease rentals of the -900 have improved to some extent from the lows of April 2020 but the recovery is slow even as this remains one of the most attractive of widebody leased assets. Lessors will be conscious that a re-engining of the -900 is likely in the latter part of the decade and as such the experience of the A330ceo should provide an indication of the how lease rentals may behave in the coming years. The -900 is no longer so new having been in service for nearly eight years.

The ULR opens up all sorts of opportunities for operators – assuming that passengers can fly. Such long routes wearing a mask for the entire journey is perhaps not so attractive. There may be an issue in placing too much of a premium on the aircraft as there few operators who will wish to fully utilize such capability. This means that the -900ULR may be subsequently used as a normal -900 but at least the hour to cycle ratio will be very high. This is the aircraft that has a good future and is one which may be niche rather than marginalized which is the fate that befell the A340-500.

The delivery rate of new -1000s is very low which is perhaps no bad thing in todays market. Of the 60 that have been listed as having been delivered only 16 are on operating leases with 30 being company owned and another 13 on finance leases. The size of the -1000 makes it less attractive to the lessors due to the limited number of potential operators. Lease rentals fell by a modest amount compared to other widebodies and have since improved. But with Hong Kong Airport recording only two percent of pre-Covid Event traffic in 2021, this underlines just how much the long haul market has been impacted.

There continues to be an attempt to talk up the A380 in terms of potential demand from ACMI operators but operating such a large aircraft is not easy with many difficulties if there should be an AOG. The configuration of the aircraft may also not lend itself to ACMI given the emphasis on first and business class. There has been no hint of any recovery – indeed, the reverse is occurring.

There is a clear concern that today not even parting out will generate the sort of revenue that was expected a few years ago. The type is being placed back into service by a number of operators and as traffic improves, more will enter service. The issue though is where will any unit go to once it leaves the existing operator – the scrap yard appears to be the only option. Lease rentals have continued to decline after suffering a 40 percent fall due to Covid.

The B727 has long been a feature of the operating lease with BCC and Rolls-Royce Capital being the principal lessors. A third of the B717 fleet is still listed as being owned by lessors of which 20 are in storage. Even the youngest is now nearly 20 years of age and it should comes as no surprises that there should be little demand for the type given that it is twice removed from modern offerings in terms of engine technology.

The market the -200HADV is surprising still evident if only just with a few in service. Lower utilization will keep the aircraft flying for a few more years.

The freighter still has considerable utility for a few operators but there are only some 34 in service. There are just too many out there to ignore. The type will be good for leasing for many more years though power by the hour arrangements will be preferable for some.

The rates are at levels that make it difficult for lessors to consider going lower. Leases of any reasonable duration become more difficult to achieve.

There is a clear danger that some lessors will get sucked into the B737-300 market once more because of the limited opportunities with respect to the neo and MAX but unless there is a long lease with a full payout to an established operator there will be risks. The rates have remained relatively stable but the market is not easy given the number on the market.

The Covid Event has perhaps had a twofold effect on the B737-300F/SF/QC. On the one hand it has created considerable demand for freighters but on the other hand it has accelerated the conversion of -800s to freighters. For the time being, the market is strong and lease rentals remain stable with the potential for rises in view of the pressure on interest rates.

The -700 has seen much lesser demand in terms of new aircraft over the last decade. This means that a large number of -700s are between 10-15 years of age. The major lessors will therefore be seeking to dispose of the aircraft to keep their portfolio young while operators will be hoping to take advantage of the weak market conditions and lease newer and more efficient types. The lease rates have increased slightly but not to any great extent.

The market for the -400 was largely confined to acting as feedstock for freighter conversion in the last decade as operators have sought newer types. It must be remembered though that the production cycle of the -400 occurred mostly at the same time as the A320ceo was being produced. The lease rentals suffered as a consequence of the Covid Event and have only managed to recover some of the declines.

The demand for airfreight due to greater emphasis on internet shopping has enabled the -400SF to remain very much in demand with lease rentals improving as a result. The -800SF may be in service in numbers but thus far the displacement has been limited. The rates for the -400SF are expected to remain stable for the short term.

The B737-800HGW continues to be demand. There are nearly 5,000 in existence still and of these nearly 50 percent are on an operating lease. Of the 2,200 on operating lease nearly 200 are in storage compared to the overall storage level of 480. With ten percent of the -800 fleet being in storage this is not that high in view of Covid. However, the problems with the MAX have served to delay the inevitable replacement of the -800 and the number in storage will therefore likely increase with the older being exposed. The lease rentals have increased to some extent but the ending of production and replacement with the MAX is now playing a role.

The market for the -8 is now improving as a more return to service and as production begins to mount. The lease rentals have improved to some extent but they are still not back to pre-Covid levels. The need for efficiency in an era of high fuel prices will ensure that the history of the MAX plays a lesser part in its acquisition. The order from Allegiant perhaps shows that new examples can still be acquired for an attractive price albeit impacted by inflation.

The smallest of the B737CG variants has long since lost its relevance. The lease rentals suffered in April 2020 and have recovered only slightly.

The -600 is now replaced by the much more relevant E195E2 and A220-100. The lease rentals of the -600 have been under pressure for a decade or more and lessors will be anxious to ensure that the type remains with the existing lessee rather than face the prospect of remarketing.

There are only some 30 -900s in service with a single example listed as being on an operating lease with AerCap. The market for the -900 was always difficult as it was mostly designed for one or two operators.

The -900ER had much more success in the operating lease market although perhaps some lessors may now have regretted assuming that it was just a large -800. The market dynamics of the -900ER are totally different from the -800 and as such lease rentals are much weaker with the placement likely to be more problematic. There are nearly 150 leased even if less than 20 are in storage.

The market for the -200B is nonexistent. Rates reflect the lack of attraction.

The -200SF is still wheeled out when nothing else is available. The aircraft acts as back up for some operators when a B747-400F or B777F is AOG. There is some validity in its occasional use but the cost of fuel is an issue given that jet fuel is increasing in price.

The -400 is now seemingly consigned to being a backdrop for films as the Covid Event has accelerated its already predicted demise. As a vehicle for leasing, the aircraft was always seen as a risk by mainstream lessors. The number of potential operators is limited although some were perhaps leased as part of the larger leasing package. The rates collapsed due to the Covid Event. The lease rentals are perhaps whatever a prospective lessee wishes them to be.

With freighter conversion no longer a realistic prospect the -400M has lost much of its attraction. The lease rentals of the type are falling and offer only a modest premium over the passenger version.

Some sense of proportion needs to be introduced. Before the Covid Event the lease rentals of the -400F were languishing due to limited demand. A number were in long term storage and some auctions took place. The Covid Event has therefore generated new sources of demand because of limited lower hold capacity on passenger aircraft. There needs to be a differentiation between the production freighter with the nose loading door and the converted freighters. The -400ERF also has a greater payload so will warrant a premium. With conversions of widebody twins there has to be element of caution with regard to future demand and lease rentals. Lessors will be well advised to seek long term leases.

The market for the -8I was always limited and as such it should not have come as a surprise that the Covid Event hastened its demise. The -8I is essentially a relic of the past although there exists the potential for conversion to VVIP. The type has suffered perhaps even more so than the A380 but again Lufthansa may be changing its mind as to the place of the type in its fleet.

The -8F is a great aircraft but the ending of production is now nigh. Lease rentals though remain strong in the current market and will continue to be attractive for some time yet. The demand for dedicated freighters is also a function of passenger aircraft not flying to many destinations or not with sufficient frequency.

The B757 market continues to be viable even with the arrival of the A321 in ever greater numbers. Of the 800 that are still in service in one guise or another, some 520 are active. The proportion of those on operating leases is relatively small with less than 25 of which only seven are in storage. Some of those inactive aircraft have already been permanently withdrawn from service. The rates fell due to Covid and only a modest recovery is evident.

The standard B757 may be vulnerable but the -200ER still has some utility given its ability to serve longer thinner routes. The A321 is naturally coming more to the fore not least as the LR and XLR. The lease rentals of the -200ER have suffered but have improved slightly.

There are approximately 70 B757 freighters on operating lease of which nine are in storage. The B757 freighter is able to survive because of its flexible performance and low utilization. The cost of engine overhauls is considerable at $4 million or more per engine. Moving to the A321F will likely be expensive but it should be noted that there is considerable overlap in terms of product life cycles between the A321 and B757 meaning that a A321F may not necessarily be any younger than a B757F.

There was an attempt to talk up the -300 before Covid and for very operators the stretch does work. The market has however moved to alternative types and the -300 has very few supporters such that lease rentals remain under pressure with no prospect of improvement.

Even before Covid the market for the -200 was barely visible. The leasing of the passenger version has not relevant for many years.

There are approximately 30 -200ERs in operation but only 13 are active. The number on operating leases number less than five. This means that the market for the few lessors is either strong or weak given the limited availability. The type though was only ever produced in small numbers and leasing has been sporadic. Rates fell by more than 30 percent due to Covid.

The type has long since lost its relevance and lease rentals have been at rock bottom for many years.

There has been much discussion over the -300ER in the last decade. The B787 initially forestalled replacement but then operators appreciated that the lesser payload/range of the B767 and lesser cost was not a disadvantage. But with Covid the vulnerability of the B767-300ER to changing market dynamics have been exposed not least because of the number being converted to freighters. There are approximately 70 -300ERs on operating leases of which 52 are in active service. As the market recovers some of those in storage will be brought back into service but by no means all will. The type is on the precipice and the abyss beckons – for the second or third time. The availability of more efficient equipment at far lower lease rentals – comparable rates to what has been paid for the -300ER – means that operators have lesser appetite. Lessors will be looking at extending leases for as long as possible rather than seek a new lessee.

The lease rentals of of the -300F continue to improve as demand strengthens rather than weakens. The produciton freighter has higher rates than the -300SF. There are a large number of B767 freighters with over 350 being listed of which 48 are on operating leases. The lease rentals are expected to remain stable and even increase given the rise in interest rates.

The -400 operates in the wings of the market given that few were built. The lease rentals have inevitably been impacted.

The -200 has always been in the wings failing to take center stage despite the best efforts of Boeing in the 1990s to promote the long range capability of the “-200A” initial variant. The lease rentals suffered by more than 30 percent due to Covid and there are no expectations of an improvement.

Of the -200ERs in the fleet nearly half are inactive. The number of lessors has been falling as aircraft have been retired. There are 55 still listed as being on operating leases of which 34 are in active service. There are just too many alternatives and lease rentals are therefore continuing to fall. At one time, all the market could talk about was how good the -200ER. But that was nearly 15 years ago and the market has eclipsed the -200ER with new offerings.

The most notable aspect of the B777F is that due to new emission rules production of the variant needs to end in 2027. This deadline has however not dissuaded customers from ordering a swathe of new examples. There are over 200 B777Fs in service and some 68 are on an operaitng lease. A freighter usually enjoys a premium in terms of lease rentals over a passenger aircraft and the lessors of such B777Fs will be enjoying double digit returns which may go some way to make up for the dire rentals for the B777-300ER. The B777X and A350F cannot be ignored in the medium term.

The market for the -300 has always been difficult. ANA, Cathay, JAL and Korean are the major operators. Lease rentals have been suffering for years and they have fallen still further. This is an aircraft that will be difficult to place once it leaves the fleets of existing operators.

The market for the -300ER has been turned upside down over the last three years. Even before the Covid Event, lease rentals were sliding and over the last two years they have registered a fall in excess of 30 percent. Of the over 800 -300ERs active/inactive 290 are on operating leases but only 42 are in storage. A number will be in operation as freighters but given the parking of B747-400s and A380s, the -300ER will have taken over these roles, not least also because of lower load factors. Nonetheless, the B777X and A350-1000 are issues that need to be considered. Retirement beckons.

The market for the -8 has been difficult for a number of years. Boeing tried to reboot the variant through streamlining production and offering lower pricing but this failed to generate the envisaged returns and lease rentals have suffered. Even before Covid, the lease rental of a new B787-8 had fallen from nearly $1m per month to less than $700,000 per month. There is always a concern that the initial variant of an all new model, particularly one employing new technology, would be usurped by a more capable offering – in this case the -9. There are nearly a 100 on operating lease with 18 lessees.

Nearly half of the -9 fleet is on an operating lease. Operators have of course been seeking to generate revenue by whatever means and a sale and leaseback offers some respite. Only 21 of those on operaitng lease are in storage. The hiatus in deliveries of the B787 continues and this has kept demand for those in operation reasonably high. The lease rentals have increased to some extent and continue to do so as the -9, along with the A350-900, represents the most desirable of widebodies.

The lease rentals of the -10 suffered to a lesser extent than many other widebodies largely because there were so few in service at the start of the Covid Event. The problem going forward is that there are relatively few operators capable of supporting the aircraft and those that can prefer to buy new. The range of the -10 is also limited and as Boeing seeks to improve this, the first generation -10s will be at a disadvtange. Only soime 15 of the 60 -10s in service are on operating leases bbut there remain a number of lessors orders yet to be fulfilled.

There are very few RJ85s on operating leases. The age of the aircraft is such that retirement should be expected not least because of the ready availability of much more efficient twin engined regional jets. The lease rentals suffered to some extent due to Covid but they were already at low levels.

The Avro RJ100 enabled operators to offer a near mainline service. There was always some ebb and flow to the RJ100 market. Twin engined regional jets were always likely to be favored over the four engines of the RJ unless the latter offered unique performance.

The 50 seat market was always vulnerable to the actions of the U.S. operators. The lease rentals have been under pressure for more than a decade not least because of the move to higher capacity equipment. The rise of electric powered aircraft will see the 50 seat market being targeted as is already the case as re-engining projects gain momentum.

Canadair was acquired by Boeing, then by Bombardier and now by MHI. The CRJ700ER took some time to come to market despite demand from some operators of the CRJ200ER. The lease rentals are weaker but perhaps not as much as for some larger regional jets.

There may some enthusiasm for restarting production of the CRJ900 by MHI but perhaps an electric version could be considered. The CRJ900 meets the scope clause limitations but heavy discounting in the final years of production impacted both values and lease rentals.

The CRJ1000 offered much promise but being too large to meet the scope clause limitations meant that orders mostly depended on non U.S. operators. Lease rentals continue to suffer with only a modest recovery from the lows of April 2020 being evident.

The lease rentals of the ERJ135 were already low before Covid and are now even lower with perhaps an emphasis on corporate operations. The type could be viewed as suited to the electric market although range would be limited.

Some 100 are still on operating leases but of these nearly 30 are in storage. The type has experienced some volatility and lease rentals have suffered during the Covid Event even as the U.S. domestic market quickly recovered.

The true 70-76 seaters were perhaps eclipsed by the 80-86 seaters quite quickly as it became apparent that Scope creep was contained. The 70 seaters were therefore too small for the U.S. market. Some operators have sought to offer lower seating capacities. The lack of an E2 version underlines the issues with this type of capacity.

The Enhanced version has enjoyed considerable success in the U.S. and while lease rentals were initially impacted by Covid they quickly improved as the type was put back into service. However, the concentration in the U.S. is a negative going forward. The orderbook is also relatively healthy not least because of the inability of the competition to negate the scope clause limitations even in the context of offering much better environmental compliance.

The lease rentals of the E190 were suffering even before Covid and as such the events of 2020 only exacerbated the negatives. However, there has been some improvement in the last two years not least because lease rentals have fallen which have gone some way to mitigating the relatively high cost of engine overhauls. Lease rentals have therefore risen but by a modest amount.

The orders for the E190E2 have failed to inspire the leasing community and rates remain weak. There are only six on operating lease. With the E190E2 being too large in terms of capacity and weight to meet scope clauses, then the type is dependent on orders from the rest of the world which have proved elusive. The collapse of the tie-up with Boeing has not helped.

The E195 may have garnered a lesser number of orders than the E190 but to some extent there has been greater stability even of rates fell significantly due to Covid. The type however, remains on the periphery of the market and rates are taking time to recover as surplus units are re-absorbed. The move to the larger and more efficient E195E2 is a clear threat and will limit the ability of lease rentals to recover from the falls recorded last year.

The E195E2, being larger and offering better seat mile costs, has thus far secured more orders than the E190E2. There are approxiimately 16 on operating lease with AerCap, ICBC, and Aircastle being the principal lessors. The type may yet secure more orders but the A220-100 offers considerable competition. The rates are slowly improiving.

The MD90 market has been weak for many a year but the Covid Event has accelerated the process and ever more have been placed into storage, never to see a return to any type of service.

FedEx is bringing another MD11F back into service. Serial number 48801 was previously operated by Lufthansa who retired its last MD11F in the third quarter of 2021. The FedEx fleet of MD11Fs now comprises some 57 excluding the Lufthansa aircraft. Three other ex-Lufthansa aircraft had previously been acquired by FedEx. A total of 16 of the 19 Lufthansa MD11Fs are now owned by FedEx, UPS or Global Airlines, the three operators of the type. UPS had acquired five and Western Global, three. The values of the MD11F experienced a significant fall in 2008 in the wake of the financial crisis but then so did the values of many freighters including the B747-400F.

The demand for used Superjets was limited in the first instance and Covid has only served to exacerbate an already difficult situation. The lease rentals are largely theoretical given the dominance of the Russian market.