The market for most widebodies continues to be at odds to traffic growth with values for continuing to fall.
The arrival of new products and the divesting of older types is contributing to the lack luster nature of the widebody market. The virtual wholesale replacement of the widebody product line up over this decades has caused problems for outgoing types. As the product line transitions to new types, operators are disposing of their older equipment and the problem is that some of the capacity being released is too large for second tier operators – unless the price is sufficiently low. The fall in widebody values continues to equate to around 7-10 percent although the decline affecting some types will be higher, notably those no longer in production and which are seeing relatively high levels of availability.
Values and Ratings courtesy of The Aircraft Value Analysis Company www.aircraftvalues.net, www.aircraftvalues.com. The Aircraft Value Analysis Rating (AVAR) reflects the considered suitability for asset based financing over a seven year period. Ratings range from the best A++ to the worst E–.
| In Production Passenger Widebody Current Values – June 2018Values in millions of US dollars. | ||||
| Aircraft | AVAR | Age | Value | Trend Analysis |
| A300-600R | E | 19871993 | 1.22.6 | The values of the -600R have been at scrap levels for some time and the number remaining in service is limited. In terms of asset attraction there is little commend the type. The -600R provided a number of operators with greater capacity for medium haul sectors but always struggled against the B767-300ER. There have already been over 100 retirements of the -600 and -600R and a few have been converted to freighters. There are many medium haul routes that require capacity – the U.S. to South America for example. Availability is always an issue and values continue to descend. |
| A330-200 | C–C+ | 1998200220062008201020132018 | 12.016.031.0En38.0En47.0En62.0En80.0En | The used market for the A330-200 is still reasonable but values are continuing to fall as the type eases out of mainstream production in favor of newer types. The aircraft has seen considerable volatility since it was introduced some 20 years ago but values are certainly on the way down. There are always a number in storage and as yet Airbus has not secured a commitment for the follow on A330-800 although this may be soon. The 238 tonne version warrants a $0.75 million premium. The 242 tonne version offers even greater versatility but this has not prevented a slippage in values. |
| A330-300 | D-(LGW)B–(HGW En) | 1994199820042008201020122015 | 6.010.034.0En52.060.069.083.0 | The market for the A330-300 is perhaps increasingly fragile although the type has a very expansive operator base. The reason for the fragility lies with the age profile and introduction of the A330-900. There are still though a reasonable number of orders for the A330-300. The market for the aircraft may see lower prices. The concern over rentals being paid is now an issue which is further impacting values as the service entry of the A330-900 approaches. A new -300 has a value of less than $97 million which compares with $108 million a few years ago. Such a fall in new net pricing has to have an effect on used values. There have been some 50 retirements of A330s. |
| A340-200 | E++ | 1993 | 3.4 | The values of the -200 have fallen by another 20 percent over the last six months. There are only 16 in commercial service and four operators so seeking to remarket is likely to be a difficult task. The values are now at scrap levels and escaping from such a black hole is impossible. |
| A340-300H | E++(HGW)E++(En) | 1996199920022007 | 7.08.510.016.0En | Value convergence is evident and as such the decline is most evident with respect to the newer aircraft. There is no hiding place for the -300 as the four engines become increasingly irrelevant in a world of twins. Placing these aircraft is still possible but difficult. Surprisingly the last -300 delivered was as recent as 2008. The type has seemingly been in the doldrums much longer than ten years. |
| A340-500L | D– | 2003 | 10.0 | The values of the -500 seem to have imploded in recent years despite the best efforts of the OEMs. The placement of the aircraft is that much more difficult as time goes by. There were only ever 34 deliveries with the last taking place in 2012 after being parked for some years. The values of the aircraft are barely any higher than those for the -300. While ultra long haul is coming back into vogue once more with Qantas flying direct from the UK to Australia with a B787-9, for the four engined -500 this proved to be uneconomical with its four engines. The green time remaining on the engines cannot be measured by the cost of replacement of LLPs. |
| A340-600L | D- | 2002 | 7.0 | Again the values of the -600 have all but collapsed as units enter the used market. Any buyers – such as they are – are all too aware of the problems of operating four engined aircraft even with the benefit of such a low capital cost. It seems that the values of the A340-300 are actually higher. The last delivery was in 2010. The weights of the -600 increased over time. With comparatively low fuel prices the type has some economy. While the -600 is not suited to all routes it can be viable on selected routes where the four engines can be a positive rather than a negative – flying over mountains for example or eliminating the need for ETOPs. Eventually less than 100 aircraft were delivered making it marginalized. |
| A350-900 | B++ | 2014 | 110.0 | The decline in the values of the A350-900 match the average annual decline of 7-8 percent now that the first flurry of deliveries has passed and the aircraft is achieving a measure of maturity. For new aircraft the values are remaining steady. The aircraft is considered to be one of the most desirable of widebodies at least in the short to medium term as illustrated by the B++ rating. |
| A380-800I | C- | 20072009201120132016 | 92.0116.0140.0164.0199.00 | While there may be attempts to seek pricing of nearer $300 million for a sale and leaseback transaction this is far above any sensible value. The type may have secured extra orders from Emirates but what is needed is additional orders from other airlines. The ex-SIA aircraft have been partly acquired by HiFly and this points to a problem for future disposals. BA needs to acquire some used aircraft to avoid the potential for parting out. The move to improve the fortunes of the type by offering greater seating density and other improvements have yet to translate into additional orders. |
| B747-400 | D– | 198919982002 | 3.28.510.8 | The fall in popularity is notable over the last decade. The aircraft has been increasingly displaced by newer types. There exists some possibility that conversion to freighter will take place but this will not prevent values from falling further. Operators have been less enthusiastic in carrying marginal economy passengers and have instead been seeking to improve yields aboard more efficient twins. The values of the -400 will continue to fall. Age and efficiency are against the type. Aircraft are being parted out in a number of locations. |
| B747-8I | D++ | 2011 | 90.0 | Production of the leviathan has ceased in a passenger format which is a sad day for the industry. The values of used aircraft are therefore exposed and the rate of decline can be expected to accelerate in the coming years. With only 47 orders and deliveries the type is particularly marginalized. There must be a concern as to where the aircraft will go when they come onto the used market. Conversion to freighter is the obvious solution. There have eight -8Is built as VVIP aircraft. |
| B767-200ERH | E+ | 19861990 | 1.62.3 | The market for the -200ER remains tough even if neither Airbus nor Boeing have a replacement. The aircraft is now some 30 years of age and retirement has been beckoning for some years. There are a few in service and the lack of a direct replacement makes it more difficult to contemplate retirement but retention does not necessarily translate into asset value. |
| B767-300 | E+ | 198619911998 | 1.32.03.1 | For many years the B767-300 managed to hang onto the coat tails of the -300ER before losing its grip and for values to enter into freefall. The limited operator base was always an issue and the type was never really suited to freighter conversion. As a D check approaches this may the point at which the operator says enough is enough. |
| B767-300ERH | D | 1988199319992002 | 3.57.312.015.5 | Boeing seems to have made the right decision with respect to not proceeding with a production restart even if it is worried about the A330neo. The aircraft still has some life left even if values are set to fall further. The -300ER continues to be very much part of the worlds fleet and allows operators to carry passengers over a large number of routes at low capital cost. The 407,000lb or even the 412,000lb versions of the -300ER have of course been much more popular as the payload range is better. |
| B767-400 | E++ | 2000 | 9.5 | The type is not seen is desirable. The indicated value of the -400 is perhaps low but then so too were the number of orders. |
| B777-200 | D– | 19951999 | 4.37.4 | The values of the B777-200 have continued to decline at a faster than average rate. The age profile shows that most were delivered before 2000 which increases the potential for retirement when they enter the market. The type enjoyed the Ripple Effect for perhaps too many years but eventually the whirlpool dragged down values to a more appropriate level. |
| B777-200ER | D– | 19961999200220062009 | 9.014.520.028.034.0 | Values of the -200ER continue to exhibit a massive fall as values catch up with market realities. There is no interest in used -200ERs except at scrap prices. The type has been increasingly usurped by the A330-300 hence Boeings concern given that it has no answer at present. The A330-300 on the used market is a factor though it could equally be argued that it is the low cost of -200ERs that has prompted lower -300 values. The weights can vary and engine type plays a significant role. There has been concern that the Trent powered aircraft may be less liquid but transactions still take place for the specific airframe/engine combination. The majority have a weight in excess of 632,000lbs. |
| B777-200LR | D | 20052011 | 28.041.0 | Not only have the values of the -200LR collapsed but the Aircraft Rating has fallen two places. With the arrival of long range non specific ULRs then the market for such aircraft as the B777-200LR has largely dissipated. For too long the premium applied to the -200LR has been too high and values are now at a more appropriate level relative to the -200ER. With 59 delivered and non on backlog, the type has limited appeal. |
| B777-300 | D– | 19982002 | 11.019.0 | The values of the B777-300, having already fallen in recent years, are perhaps falling by a lesser amount than is being experienced by some other members of the B777 family. Membership of the “B Group” – B757-300, B767-300, B767-400, B777-200, B747-8I – is not something that should be sought after given that it represents a marginalized aircraft which features higher than average residual value deterioration. |
| B777-300ER | B– | 2003200620092015 | 51.071.093.0136.0 | The values of the -300ER are now falling by an appreciable amount. This is because used aircraft are coming onto the market at relatively low prices facilitated in part by the significant discounts that the larger customers were able to secure. The values of new examples are now fortunate to be more than $160 million and those built a decade ago are now worth less than half that amount. The 775,000lb version is by far the most popular weight selection and there is an Enhanced version that was introduced in 2016. |
| B787-8 | B– | 20112015 | 71.099.0 | The fall in the values of the -8 is likely to accelerate further in the coming years as it becomes increasingly apparent to the wider market that the first B787 variant was perhaps over priced. The number of new order placements is limited and some can be expected to enter the used market in the near future. Lease rentals on new aircraft can be below $700,000 for the right lessee. |
| B787-9 | A– | 2014 | 106.0 | There has been speculation that American secured order pricing of $110 million versus the new single unit value of $145 million. The values of the -9 – as the most popular widebody – have fallen by only a modest amount to date. The greater capacity and range is hard to resist particularly as reliability has much improved. The Trent engines are providing something of a headache for some operators but the TEN variant offers some relief. |
| The commentary highlights the change in fortunes since the last update of March 2018. Values are for indicative purposes and should be used for guidance only. En = Enhanced | ||||
