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International Bureau of Aviation states it will be sometime before lease rates return to base levels

20-Apr-2010 8:25 AM

International Bureau of Aviation (IBA) announced (19-Apr-2010) the industry downturn (in terms of aircraft values) has now "hit rock bottom" and that there are signs of recovery to be seen although it will be some time yet before values return to base rates, "let alone the heady heights of 2007". Key highlights from Commercial Director, Owen Geach, include:

  • Aircraft values have declined across the board – for some aircraft, value reductions have been minor as little trading has actually occurred, but for others values have dropped significantly;
  • Current production aircraft have exhibited the smallest value decline, with some out-of-production aircraft values dropping by large margins;
  • Most aircraft market values have dropped between 10-20% from base values, and some have fallen even further when considering the market peak in 2007;
  • Some poor performing aircraft like the MD80 have seen market values dropped 40% from base alone;
  • Banks are reluctant to provide finance other than for new delivery aircraft and this, together with low passenger numbers, has led to a reduction in deals being completed;
  • There have been a large number of lease defaults and decreasing rental streams. [more]