The table is published on an annual basis and complements the quarterly updates to specific aircraft categories. The table encompasses both current and future lease rentals. The methodology involved in calculating lease rentals differs from that of values. Lease rentals display greater volatility. Rentals are calculated individually and are not causally linked to values.
The listing of current and future lease rates is based on the year of build. However, unlike values, the relevance of the year of build is less significant. The essential assumption is that the aircraft are being leased as a single unit and between a willing lessor and willing lessee on a dry operating lease basis. Maintenance reserves are assumed to be payable in addition to the quoted rates.
The assumed rentals period ranges between nine to ten years for modern narrowbodies to five to seven years for the larger widebodies. Aircraft out of production will likely involve shorter terms such that five to six years may be more relevant for secondary narrowbody lease terms. The assumed rental period will change depending on the then prevailing market conditions. Weak market conditions will usually result in shorter terms while stronger conditions will likely result in lessors seeking to lock lessees at higher rentals for the longer term.
The high and low figures for April 2022 lease rentals represent adjustments for length of lease, the financial standing of the lessee and the return conditions. A longer lease to a stronger credit will likely result in lower rentals. These are not absolutes and sale-and-leaseback transactions may fall outside the figures indicated. Some transactions involving renegotiations on less popular aircraft may be considered exceptional and can fall outside the rental ranges. As aircraft age there may be less reliance on dry operating leases and greater emphasis on wet leasing or power by the hour agreements.
The rentals quoted below were prepared in late April 2022 in the context of the recovery from the Covid Event but in the midst of albeit temporary infrastructure issues. The lease rentals during the Covid Event experienced a considerable decline. As recompense for agreeing to lease reductions and lease rental holidays as well as power by the hour deals, the lessors are likely to have secured lease extensions. The lessor will wish for lease rentals to rise by a number of steps. This step-up arrangement or lease extension may therefore see the lease revenue virtually equate to pre-Covid levels over the term of the lease. Even if the lease expires in the next few years, subsequent rental agreements with either the existing lessee or a new lessee should be at a much higher level with longer terms, at least assuming that the right asset is selected. A freighter may see a lease term of nine to ten years.
The exception to the trend for continued soft rentals relates to sale and leasebacks (SLB’s) and freighters. Even SLB’s may see a step arrangement as a means of alleviating the burden on the lessee. The SLB’s however, will likely feature a longer-term lease. For the freighters, the lease terms have not been unduly affected nor have the lease rentals. Indeed, prior to the Covid event, the freighters were suffering a malaise but have since experienced greater demand and allowed rentals to rise in some cases.
In addition to the commentary and lease rentals an indication of the Mid Case Lease Rate Factor (LRF), which expresses the current monthly rental as a percentage of the value, is also provided together with the relevant age of aircraft. The quoted future rental, expressed in thousands of dollars per month are Market not Base Rates and attempt to predict cyclic trends when supply will exceed demand and vice versa. Rentals may therefore experience a rise as well as a fall in any projected year. The future rentals – three and seven years from 2022 – are expressed in thousands of current dollars having been adjusted for inflation and are based on only the Mid Case projection rentals. The figures are for guidance only. M/R = Maintenance reserves are excluded and return conditions assume half-life.
The data has been extracted from the April 30th 2022 semi-annual Aircraft Values Basic 2022-2042, priced $1,950.00, by courtesy of The Aircraft Value Analysis Company. Telephone: +44 (0) 203 468 5594, Fax: +44 (0) 203 468 5596, E-mail: [email protected] Internet http://www.aircraftvalues.net; www.aircraftvalues.com
|YEAR||April 2022$’000 per month excl. M/R||FUTURE LEASE RATE|
|A300F4-200 (Converted). LRF 1980 = 5.8
The demand for freighters shows no signs of abating even though it remains difficult to imagine how all the current conversions and new orders will be fulfilled without seeing a wholesale reduction in the fleet of older aircraft. Hence, a case in point. The market for the A300F4/C4 has not seen any recovery despite the demand. Indeed, placing a lease rental on the type has been something of a futile exercise. The most relevant means of placing the aircraft has been through power by the hour agreements. The lack of demand is perhaps not surprising given the age of the aircraft. Older aircraft can sometimes be used for transporting fewer desirable items such as fish. Spillages of anything encompassing salt can lead to corrosion and therefore are operators are wary of using younger and more valuable freighters.
|A300-600. LRF 1990 = N/A
Placing a lease rental on the -600 is not a useful exercise. The lessors were never enamored with the type given the restrictive operator base. At the time the -600 entered service, the operating lease was only just beginning to get into its stride and therefore the focus was on the more liquid of assets, namely the B737-300. Yet, even then, as now, the lessors were less enthusiastic about the leasing the widebodies as indeed were the operators. Accounting rules at the time, depending on the jurisdictions, may have made it preferable for operators to have aircraft on their books whereas today it can be more tax efficient to lease aircraft. 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.
|A300-600R. LRF 1992 = 5.4
The -600R had a varied if unremarkable life serving some major operators not least American. The type though was always in the shadow of the B767-300ER but at least Airbus eventually had enough experience to go onto to develop the A330-300. The leasing of the -600R is no longer of relevance given that the few that are still in service are located in Iran. The lease rates are very much theoretical. 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.
|A300-600RF. LRF 2000 = 1.1
The A300-600RF needs to be viewed in two guises – the production freighter and those that were converted. The converted aircraft will have more hours and cycles on the airframe and this may limit the service life of the aircraft. However, once converted the aircraft will likely be flying for a few hours a day which will extend the service life. 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 1990 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.
|A310-300SF. 157t CF6. LRF 1990 = 2.5
The limited demand for the older freighters is all too easily exemplified by the A310-300F. There are many in storage. A small widebody suffers from some significant design challenges. While the engine thrust is significant so too is the weight of the engine; the widebody fuselage increases the drag. Yet, the lower hold offers the ability to carry containers. Despite the advantages, the preference when operating the widebody freighters is for volume and the A310 is capable of carrying only so much before the volume capacity is reached. Lease rentals can be anything the lessee wishes them to be. 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.
|A220-100. LRF 2016 = 0.7
The orderbook for the A220-100 lags behind the -300 and it is notable that in placing a follow-on order, Delta has ordered an additional 12 -300s rather than the -100. This segment of the market is proving tough for the A220-100 as it was always expected to be and as such the lessors have preferred to focus on the -300. Some 25 -100s are however, leased with Apollo Global Management featuring large but all aircraft are leased to Delta. Om paper the -100 would seem ideally placed to replace the likes of the B737-500, B737-600, A318 and B717 but the market structure has moved on with operators preferring to use larger – or smaller aircraft. The E195E2 is also a formidable competitor.
|A220-300. LRF 2016= 0.8
The -300 is seen as an ideal vehicle for the operating lessor. The cost of the aircraft is not so great as to take up a major proportion of the budget and the type is of interest to both large and small operators. The lessors are therefore active with Carlyle., JP Lease, Avation, Chorus, Altavair, AerCap, CMB and Voyager all leasing the type. The lease rentals fell by one of the least amounts during the Covid Event largely because of its then recent service entry. The backlog is not as great as it could be and Airbus are working hard to improve the orderbook. Production rates are due to increase substantially in the coming years and this will expand the operator base. The lease rentals have again improved, and further rises are expected. The development of the A220-500 is more of a certainty and Pratt & Whitney are making significant improvements in the engine in the coming years. There are currently 41 -300s leased to five operators.
|A319HGW. LRF 2001 = 1.2
The market for the A319 has experienced some surges of interest over the last decade but the very absence of orders and very limited number of deliveries underlines just how difficult this market segment is, particularly in view of the arrival of the A220. The age profile of the aircraft is such that its ageing and this means that availability of leased aircraft is increasing. There are still some 466 on operating lease which is some 40 percent of the fleet. Of those on operating lease approximately 50 are in storage. The aircraft is therefore reasonably in demand, but this may because of relatively low lease 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.
|A319neo. LRF 2019 = 0.80
There are very few orders for the A319neo, and this should come as no surprise as Airbus are naturally pushing to secure orders for the A220. The A319neo is still part of the product line up to meet the demands of a few customers. The lease rentals reflect the recent service entry but there is little expectation of a surge. At present, there is not a single A319neo that is on an operating lease.
|A320-200HGW. 77 tonne CFM56. LRF 2004 = 1.4
The market for the A320ceo should be strong but as the type has a product life cycle that stretches back to the late 1980s, the age profile makes it more difficult to avoid having a surplus of leased aircraft available. Of the some 2,300 leased A320ceos, approximately 15 percent are not currently active. The lease rentals suffered a significantly during the Covid Event and while there was initially a measure of recovery they have since exhibited a measure of weakness once more not least because of the sustained delivery of the A320neo. The high price of fuel is an issue for operators. As leases return to normality, those lease rates that were agreed prior to the pandemic may now seem high. The lessors are still 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.
|A320neo. LRF 2018 = 0.7
The leasing of the A320neo is reaching new heights. Of the some 1500 A320neos that have been delivered more than 75 percent are on operating lease. Of the 1200 that are on operating leases, there are 145 that are inactive of which 120 are in storage. Asia is still an issue in terms of recovery but those in storage will soon be back in service. The lease rentals of the A320neo are quickly rising and it can be expected that with the rise in fuel prices that this surge will continue even if operators are increasingly moving to the A321neo. Airbus is set to increase A320neo family production but at present this is not expected to result in a surplus or excess as replacement of the A320ceo will continue.
|A321-100LGW. LRF 1999 = 2.2
The demand for the -100 is not really relevant for the leasing market. 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.
|A321-200LGW. LRF 2001 = 1.2
The A321ceo should be in considerable demand but this is not necessarily the case largely because demand is focused on the A321neo. Nearly 50 percent of the A321-200ceo fleet is leased and there are nearly 150 that are still inactive. Given the age profile of the aircraft there exists a constant flow of lease expires and with so many lessors there is competition. 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. The lease rentals are edging downwards albeit slowly after seeing a modicum of recovery after the virtual shutdown of aviation.
|A321neo. LRF 2016 = 0.7
There can be no denying the popularity of the A321neo with more being delivered than A320neos. There are 600 A321neos already on operating lease which represents just as great a proportion as the A320neo – more than 75 percent. The service entry of the XLR may have been pushed back but this has not prevented operators from switching from A320s to the A321. 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. 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 lease rentals are continuing to rise which is something that will continue. The A321 is seen as the most desirable of leasing vehicles. The B737-10 may have garnered a few orders of late but the customer base remains just as limited as the B737-900ER.
|A330-200. LRF 2001 = 1.2
The older widebodies – and the -200 is now classified as an older widebody – are suffering not least because of the continued weakness of the international markets and because of rising fuel prices. There is much to be said for the continued placement of leased A330-200s but this is because lease rentals are so low and because neither Airbus nor Boeing are producing widebodies in any quantity. Air Belgium is to add a number of A330-200s. The leased aircraft will be ex-Etihad and are currently in storage with the lessor being Altavair. The A330-200 was experiencing problems even before the Covid Event. Nearly a third of the -200 fleet is leased with 63 lessees. This demonstrates how versatile the -200 is but at the same time, the competition among lessors is high. The lease rentals have therefore continued to weaken. The virtual absence of orders for the A330-800 points to a changing market structure. The age profile of the -200 is also advancing which makes it less likely that operators will wish to pay the rates that were evident before 2020. 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 and that the -200 will be needed once more at least as interim lift.
|A330-300HGW. LRF 2000 = 1.4
Like the -200, the -300 is facing downward pressures due to surplus capacity and a move to newer equipment such as the A330-900. A third of the -300 fleet are leased equating to over 300 aircraft with 65 lessees. The Asian operators use the type in numbers and as such it is little wonder that of the 300 leased aircraft over 80 are still not back in service. A number of operators of the type have inevitably collapsed or contracted operations during the course of the last two years. Aircraft are moving between operators, and some are scheduled to be converted given the lack of passenger opportunity and low book values. The lease rentals have failed to improve from the lows experienced in the second quarter of 2020. 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.
|A330-300P2F. LRF 2010 = 0.9
The freighter conversion program for the A330 is gathering pace not least because of the duality of demand for availability of passenger aircraft and their low price. The age profile of the A330-300 is well suited to the conversion process although some of those built in the 1990s may not be candidates. The post conversion premium is considerable making up for the $18 million conversion cost over perhaps six to eight year.
|A330-900. LRF 2017 = 0.8
The production rates of the A330-900 are set to improve albeit at relatively low rates. The lease rentals of the type have been improving as operators appreciate the fuel efficiency and they are set to go higher. However, it is to be noted that rates are well below those levels that the A330-300 secured only some five years ago. The type secured a number of lessors as customers, and this will allow the type to be distributed among a variety of lessees in the coming years. The type is more than able to hold its own against the B787 on the medium haul routes. More than fifty percent of those in service are on operating leases – 61 aircraft with 17 operators.
|A340-200. LRF 1996 = 2.7
A good aircraft – for a few. In recent “decades” it has served more as stop gap measure.
|A340-300ER 275t. LRF 2002 = 1.9
The -300ER is facing an uphill struggle as second tier operators have increasingly moved to more affordable twins and even new equipment. The rates can only go in one direction – and that is not up.
|A340-600I. LRF 2004 = 2.4
With the A380 being revived by some operators and even older B777s coming back into service, there may yet be an opportunity for the -600 were it not for concerns over relative fuel efficiency. The type could be used for a few routes and as back up capacity but even in the context of the forthcoming shortage of widebody capacity it is difficult to see a future for the type.
|A350-900 268t 2014 = 0.8
There are over 425 A350-900s in service and nearly 45 – or 187 aircraft – percent are on operating leases. A total of thirty operators lease the type. With the hiatus in B787 deliveries, the A350 has been well used notwithstanding the dispute between Qatar and Airbus. The aircraft has become one of the most attractive of widebody aircraft for leasing and as the international market recovers there will be a further interest in the type. For the lessors seeking to order the type there may be wisp of concern over when not if re-engining will take place. The lease rentals are rising and while they still remain below pre-Covid levels, the higher interest rates will see an increase.
|A350-900ULR. LRF 2017 = 0.7
The ULR (ultra long range) opens up a realm of opportunities for operators – assuming that passengers can fly. 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.
|A350-1000. LRF 2017 = 0.8
In view of the larger size of the -1000 the number of lessors is more limited, again reflecting the ability of such operators to finance the aircraft perhaps via sale and leasebacks rather than operating leases. The type is seeing an improvement in terms of operating lease rates, but it will take some time for the momentum to be restored. At one time there was speculation that a stretch to the -1000 would be needed to compete with the B777-9 but this is not so relevant today. Airbus needs to make considerable capital out of the delay to the service entry of the B777-9.
|A380LGW. LRF 2007= 0.9
At one time during the pandemic there were only two A380s that remained in service but today some 45 percent of the fleet is in service. Of the 65 A380s that are on operating leases only 36 are in service with two operators. Operators are restoring the aircraft because of the surge in demand but the higher price of fuel is not to the types advantage in the coming years.
|A380HGW. LRF 2013=0.8
The rates for the A380 are perhaps holding steady but placing any lease rental on the type is something of a irrelevant exercise. Even in the best of times there was no demand for a secondary lease. The best that lessors can hope for is that there is some demand for ACMI leases now that the international market is opening up once more.
|B717-200. LRF 2001 = 1.5
The age profile of the B717 makes it ever less suitable for use with mainline carriers except for perhaps Delta. There are 50 leased with three lessees – Cobham, Delta and Hawaiian. Of course, BCC and Qantas feature as lessors. The rates may not have changed much in the last year but they are at low levels and it is difficult to see where these would be placed once leases expire. The emphasis will be on lease extensions.
|B727-200HADV. LRF 1978 = 30.0
A few remain in service despite the high cost of fuel. The three engines enable ferrying in the event of engine failure. Lower utilization will keep the aircraft flying for a few more years.
|B727-200FHADV. LRF 1978 = 15.9
Again the three engine performance is suited to the needs of some operators and with a flying spanner (ie flight engineer) the aircraft can operate to some remote places. Power by the hour (a term coined by Rolls-Royce) will be preferable.
|B737-200HADV. LRF 1978 = 13.1
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.
|B737-300HGW EFIS. LRF 1992 = 5.0
Despite the age of the -300 the type still has many operators and there are still at least 164 leased to 64 operators. The aircraft can be used as stop gap lift or back up capacity. The rates can be variable depending on the lessee and the term. But the NG is now more readily available, and this means that difficult times exist for the -300 in the coming years. 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.
|B737-300SF. LRF 1992 = 2.3
The decline in -300SF attraction has been mooted a number of times but thus far has not translated into reality. The -300SF is just as attractive for many operators as it was a decade ago. The type may be vulnerable to the -800SF but the latter has much greater capacity which will not suit the needs of all operators. The lease rentals are holding steady for the time being.
|B737-700HGW. LRF 2002 = 1.1
The 130 seat segment of the market lost its appeal a decade ago hence the absence of orders and deliveries. The used market is still active as some operators need lesser capacity to start operations or to build up routes. The A220 is taking over this seating capacity. The lease rentals before the pandemic saw some stability but as yet there has been no increase to pre-Covid Event levels. There are over 2,000 A319s and B737-700’s. 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.
|B737-400HGW EFIS. LRF 1996 = 2.8
The -400 lost its attraction as a passenger aircraft many years ago but the type was sought after for freighter conversion. Lease rentals for the passenger version can vary considerably but as with many aircraft of this era, lessors will be seeking to extend leases rather than seek new lessees.
|B737-400SF. LRF 1996 = 1.3
The lease rentals for the -400SF show no signs of weakness despite the arrival of the -800SF in numbers. The number of -800SFs in service will soon surpass that of the -400SF. The strength of the airfreight market – at least in the short term – should enable lease rentals to remain firm potentially rising due to interest rates.
|B737-800HGW. LRF 2002 = 1.3
The combination of delays to the MAX, the removal of passenger aircraft for freighter conversion and the recovery of the regional market means that there is something of a shortage of -800s for lease. The problem of exchange rates due to the stronger dollar is something that is preventing lessors from imposing much higher rentals. There are over 2,400 -800s on operating leases with 193 operators. Of these 271 are still inactive which shows that there is still some elasticity in the leasing market but not much. Ryanair has been trying to secure additional -800s but without much success perhaps because rates were perceived to be too high. The arrival of the MAX in numbers is something that cannot be ignored as this allows operators to transition to the new type at the expense of the -800.
|B737-800SF. LRF 2008 = 0.9
The -800SF can command lease rentals some $80-100,000 per month more than the -800 which more than covers the cost of conversion. The premium shows no signs of abating even with the mass conversion of so many. The lessors have hundreds of -800s at low book value which makes conversion that much more attractive. New conversion centers seem to be springing up on a monthly basis. Of course some lessees may not be as strong as might be wished which may mean extra management time and early transitioning but at least refurbishment costs will be at a minimum.
|B737MAX8. LRF 2017 = 0.7
The production of the MAX lags behind that of the A320neo family but at least it is evident once more. Supply chain issues persist, and this is making it necessary for Boeing to be conservative. The lease rentals are increasing and assuming that no more technical issues appear, rates can be expected to rise even further. Again, the adverse exchange rate for many lessees creates problems. The A320neo family delivery rate shows that the preference is clearly for the A321neo, and this is something that Boeing has yet to fully address.
|B737-500HGW EFIS. LRF 1994 = 3.0
The -500 has been in the doldrums for many years. For a time Russia was a source of demand for a time. The lease rentals are unlikely to fall any further because they are already at rock bottom.
|B737-600LGW. LRF 2002 = 1.7
The -600 has been scrapped in numbers in the last decade and the remaining lessors of the type will prefer that existing lessees retain the aircraft for as long as possible. At least the lessors know that maintenance reserves will provide some profit should lease opportunities transition to the vanishing point.
|B737-900. LRF 2004 = 1.0
The operating lease market for the -900 has been virtually non-existent as it was all too apparent that the variant was suited to a few operators.
|B737-900ER. LRF 2007= 0.9
Nearly 20 years ago, Boeing had the opportunity to compete with the A321 but even the -900ER could not wrest control away from Airbus. The lease rentals have continually underperformed, and some lessors may have wished that they had ordered -800s instead. The rates for the -900ER are not expected to increase and will instead continue to decline. There are 113 leased -900ERs of which 25 are still inactive.
|B737-MAX9. LRF 2018 = 0.6
The MAX9 is an enigma both in terms of the actual number that have been ordered and as to where it sits in the Boeing line up. The B737-10 has taken over its roll and while there are 43 leased aircraft with six operators there may be an expectation that these will remain with existing lessees for many years rather than move to new lessees after eight to ten years.
|B747-200SF. JT9D/PW4000 LGW LRF 1984 = 6.1
The -200SF has been occasionally dragged out of the desert but this is only a short-lived endeavor. There is some validity in its occasional use, but the cost of fuel is an issue given that jet fuel is increasing in price.
|B747-400. CF6 LRF 1993 = 2.3
The -400 has now all but bene consigned to history – and movies. The type has even less relevance in an era of high fuel prices. The lessors essentially bypassed the type because of the limited The lease rentals are perhaps whatever a prospective lessee wishes them to be.
|B747-400M. LRF 1993 = 1.9
There are only two -400Ms on operating lease with JetOneX listed as the owner leasing two to Longtail Aviation but these are in storage. There are another ten in storage with only a single example being in service. The lease rentals are again very variable.
|B747-400F. LRF 1998 = 1.5
The -400F (the production freighter with the nose loading door) and the -400SF (the converted aircraft with a main deck side door) have been revived due to the shortage of freighter capacity. Cargolux has just announced an order for the B777-8F which aims to replace existing -400Fs but service entry of the former is still some years away. The lease rentals of the -400F have improved considerably than before the Covid Event when the market was weak, and many examples were in storage. The volatility of -400F lease rentals all too clearly demonstrates that the airfreight market can be extremely fickle. The international passenger market is opening up once more and dedicated long haul freighters may lose some of their market share. 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.
|B747-8I. LRF 2012 = 0.9
The -8I is no longer relevant although a few operators have returned the type to service after experiencing a shortage of widebody capacity. The -8I is essentially a relic of the past although there exists the potential for conversion to VVIP.
|B747-8F. LRF 2011 = 0.9
The lease rentals of the -8F are remaining steady even as production of the type comes to an end. The fuel efficiency of the aircraft is welcome in this high fuel cost environment. The four engined configuration may not offer the advantages of the twins. The leasing of the aircraft at premium rates can be expected for many years to come.
|B757-200 (220,000lbs RB211). LRF 1990 = 2.1
The B757 is still in use in numbers but surprisingly perhaps the majority are owned rather than leases. There are only 64 that are on operating leases with 22 lessees. Of the 64 42 are active.
|B757-200ER (250,000lbs RB211). LRF 1994 = 1.9
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.
|B757-200SF. LRF 1992 = 1.4
The B757 continues to be converted even after all these years. The type continues to serve the airfreight market very well and there is nothing to suggest that lease rentals will change in the near term. The A321 is starting to be converted but the number modified thus far is very limited and many years will be required before the Airbus product provides effective competition. Seeking a suitable B757 for freighter conversion is not easy and sometimes it is necessary to pay a premium for feedstock particularly where considerable time remains on the engines.
|B757-300LGW. LRF 2001 = 1.2
Condor has just announced an order that will see its leased -300s being replaced with new aircraft. United is the only other lessee of the type. There is a possibility that the aircraft could be converted. The lease rentals have fallen in recent years and as such placing the aircraft will be just as difficult as when the variant was launched.
|B767-200. LRF 1986 = 5.1
Even before Covid the market for the -200 was barely visible. The leasing of the passenger version has not relevant for many years.
|B767-200ER HGW. LRF 1990 = 3.7
The number of -200ER aircraft on operating leases amount only three and as such placing a lease rental on the type is something of a futile exercise. The type was only ever produced in small numbers and leasing has been sporadic. Rates fell by more than 30 percent due to Covid.
|B767-300. LRF 1992 = 2.5
The type has long since lost its relevance and lease rentals have been at rock bottom for many years.
|B767-300ER HGW. LRF 1999 = 1.6
The lease rates of the -300ER have defied predictions for many years having survived at rates much higher than expected. Yet today, despite the acquisitions for freighter conversion, lease rates for the passenger version are indeed weakening as operators move to newer equipment at more attractive prices. Many leases for the -300ER were agreed before the Covid Event and therefore do not compare well with rates now on offer for the A330-200 and -300. There are some 54 on operating lease of which 12 are inactive. This compares with an active/inactive fleet of 337 -300ER aircraft. Lessors will be looking at extending leases for as long as possible rather than seek a new lessee.
|B767-300F. LRF 2003 = 1.1
The market for the -300F is expected to remain strong in the near term due to the expansion of internet shopping and familiarity of the type. The lease rentals have the potential to rise slightly higher not least because of higher interest rates but the strong dollar is a negative. There are now 55 B767-300ER freighters on lease which is a relatively low proportion of the total of 375 but this is expected to increase.
|B767-400. LRF 2000 = 1.6
The -400 operates in the wings of the market given that few were built. The lease rentals have inevitably been impacted.
|B777-200. LRF 2001 = 1.9
The lease rentals of the -200 are virtually whatever the lessee wishes them to be. 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.
|B777-200ER. LRF 2001 = 1.9
There are 46 -200ER on operating leases to 18 operators of which 25 are active with 11 airlines. The market for the -200ER is extremely weak and seeking to dispose of the aircraft for any money at all seems a lost cause. Yet, some operators are restoring the type to service because of the surge in demand. This does not signal any improvement in rentals as the fate of the -200ER was already evident a decade ago.
|B777F. LRF 2008 = 1.0
The B777F remains the most attractive of freighters – at least for the next few years. Production beyond 2027 is not expected because of emission rules but by that time the B777-8F will be available. In the interim, and despite the conversion of larger passenger widebodies, the B777F is expected to remain attractive for lessor and lessee. There are 65 that are on operating leases with 11 lessees.
|B777-300. LRF 2003 = 1.6
There is little to commend the -300 except that for a few operators, its capacity meets the need to serve dense regional routes. There are only some seven on operating leases with three operators.
|B777-300ER. LRF 2004 = 1.3
The very size of the -300ER makes it difficult to place outside the exclusive flag carrier club. Of the 280 that are operating leases with 33 operators 42 are inactive. A number of aircraft have been used in the “preighter” role. The lease rentals have tumbled as it has become apparent that placement outside the top tier is difficult. Another 154 with 15 operators are on financial leases. The owners of the financial lease may be less experienced than those with operating lessors. This means that the substantial number on finance leases may be remarketed by third parties and with the possibility that a full payout may have been achieved, discounting to achieve some return at least may be evident. The reconfiguration cost of the -300ER can extend from $5 to $10 million although this can be contained if a single or two class configuration is sought. The B777X and A350-1000 are issues that need to be considered. Retirement beckons.
|B777-300ERBSDF. LRF 2005 = 1.0
The conversion of the -300ER is now being undertaken albeit in limited numbers. However, it is apparent that the aircraft has the volume to meet the requirements of a number of operators and lease rates are expected to remain stable for some time although subject to interest and exchange rates.
|B787-8. LRF 2011= 0.9
The demand for the B787-8 remains limited but then so too has this been apparent for most widebodies over the course of the last two years or more. Yet, as the first B787 variant, the type was always vulnerable to the arrival of more capable variants. The number of orders and deliveries even before the pandemic were limited. The lease rentals continue to ease downwards. When the B787-8 first entered service, such was the demand for the type in what was then also a high fuel cost environment that lease rates in excess of $1 million were being reported. More recently, these had fallen to less than $700,000 per month even for new aircraft on sale and leasebacks.
|B787-9. LRF 2014 = 0.8
The hiatus in B787 deliveries has of course focused activity on the used market. At the start of the Covid Event, the disposal of a large number of -9s operated by Norwegian saw some less than attractive rentals. The more recent absence of new deliveries has not seen the rapid rise in rentals that may have been expected. However, as the international market opens up once more then a surge is in evidence. Combined with high fuel prices this is to the advantage of the -9 and lease rentals are now climbing once more. There is yet ample opportunity for lease rentals to match pre-pandemic levels that saw rates in excess of $1 million per month.
|B787-10. LRF 2018 = 0.8
There are only 15 -10s on operating leases with four operators. The lessors have always been rightly less enthusiastic about being heavily involved in the larger widebody market except perhaps through sale and leasebacks that offer the prospect of a full payout. The larger widebodies are only suited to the longer haul, denser routes and as such operators are more limited. Bilateral restrictions means that it less easy for operators to start services between major gateways where airport congestion may also be a consideration. The issue with the -10 lies with its more limited payload/range capability which Boeing may address once deliveries recommence in earnest.
|Avro RJ85. LRF 1998 = 5.1
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.
|Canadair CRJ200ER. LRF 2001 = 3.4
There are no new 50 seat regional jets being produced which is of course to the advantage of the CRJ200ER were it for the fact that the type is very much concentrated in the U.S. There can be considerable variation in lease rentals depending on the jurisdiction, lease term and credit. The prospect of retrofitting with hydrogen is very real in the coming years.
|Canadair CRJ700ER. LRF 2002 = 1.9
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 market for the CRJ700ER has been limited for a number of years and again features a concentration that cannot be ignored.
|Canadair CRJ900ER. LRF 2002 = 1.8
There may some enthusiasm for restarting production of the CRJ900 by MHI but perhaps an electric version could be considered or even hydrogen. Producing hydrogen through the use of solar energy in some states of the U.S. may be practical and the CRJ900 lends itself to conversion. The CRJ900 meets the scope clause limitations but heavy discounting in the final years of production impacted both values and lease rentals.
|Canadair CRJ1000. LRF 2011 = 1.1
The demand for the CRJ1000 may seem to be limited but a number have been acquired from HOP! that are now being placed with new operators indicating that the type has some future. 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 may yet increase.
|ERJ135ER. LRF 2001 = 3.1
With the high fuel prices, the economics of the 30-seat commuter jet make even less economic sense – unless ticket prices rise by a significant amount. The lease rentals can vary depending on jurisdiction.
|ERJ145ER. LRF 2001 = 3.3
The market for the ERJ145ER remains ever much as variable as that of the CRJ200ER. The lease rentals have been weak for many years as the market for the type remains primarily restricted to the U.S.
|Embraer 170. LRF 2005 = 1.7
The E170 was much in demand before the E175 emerged but scope creep saw the 70 seaters lose some of their appeal. Operators have sought to reconfigure the aircraft with a lesser number of seats to increase passenger comfort. The interior space of the E170 is much more akin to a mainline jet than a regional rock hopper. The lack of an E2 version underlines the issues with this type of capacity.
|Embraer 175. LRF 2006 = 1.3
The scope clause limitations in the U.S. has resulted in exceptional demand for a type that is essentially inefficient when compared to the E175E2 and contradicts the ambition of being net zero. Aviation is already a prime target for the environmental lobby and the scope clause limitations in the U.S. will make it even harder to promote the green credentials of the aviation.
|Embraer E190. LRF 2006 = 1.5
The E190 has seen considerable variation in rentals over the last few years – even before Covid. The surplus that was evident has dissipated to some extent, but the type is ever present on the market and lessors have to work hard. There are over 290 E190s on operating lease which equates to fifty percent of the fleet. While this provides some indication of the ability to place the aircraft with a diverse number of lessees, it also demonstrates that competition is considerable. Lease rentals are not expected to see any improvement. The launch and first orders for the E190 freighter will provide a welcome alternative means of leasing for the lessors.
|Embraer E190E2. LRF 2018 = 0.7
The market for the E190E2 continues to be weaker than expected but the order intake may improve as the year progresses. The E2 offers much more than re-engining and thus the efficiency improvement makes it suited to a high fuel cost environment.
|Embraer E195. LRF 2008 = 1.3
The lease rentals of the E195 are facing some modest weakness as the E195E gathers momentum. 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.
|Embraer E195E2. LRF 2018 = 0.7
The E195E2 offers far better seat mile costs due to the stretch and major changes to the engine and wing. The aircraft has secured a number of orders and represents a competitor to the A220-100. The lease rentals are rising as the market recovers and some lessors recognize its ability to meet the needs of the market.
|MD11SF. LRF 1996 = 2.6
The MD11SF may have seemed all but a distant memory but a few are being brought back into service. The lease rentals are largely theoretical in view of only seven being leased.