Ascend improves aircraft valuation tracking
18-Nov-2009 New product shows narrowbody values worse hit than post-September 11th. However, some widebody lease rates show exceptional over-performance
The latest economic downturn has severely affected the aviation industry. For some segments, specifically for older narrowbody aircraft, the impact has been more dramatic even than after the September 11th attacks, according to global aviation specialist Ascend.
Identifying new opportunities and managing risk on existing exposures in the aerospace sector requires the most detailed data on how aircraft values develop over time. But understanding aircraft value fluctuations in order to assess opportunities and mitigate risk has long been a challenge for organizations that buy, finance and manage aviation assets.
Ascend’s new Values Analyzer, released today, incorporates historical base and market values and lease rates for each year of build for 45 types of aircraft, and projects base values and base lease rates into the future, providing more rigorous criteria on which to base key metrics.
It provides a range of options to extract and understand value trends in the aircraft market, essential to practitioners in the aviation trading, insurance and finance markets. It allows companies to conduct more effective risk management, and for banks, it supports the Internal Ratings-Based Approach to Basel II regulatory capital requirements.
“Values Analyzer combines historical, current and future values, providing new ways to confidently review market performance and to better estimate future valuation behaviour. This gives our customers the information and confidence to make better informed decisions regarding the potential risk or opportunity of activities in the aviation market,” says Andy Golub of Ascend’s Risk Advisory Division.
“Our current data shows that values for many narrowbody types have fallen out of the sky, while certain widebodies have fared much better through this recession. In fact, lease rates for Boeing 767-300ER and Airbus A330 are showing exceptional over-performance.”
Tailored specifically in response to customer requests, Ascend’s Values Analyzer provides reliable and impartial insights into global aircraft values, providing benchmark analysis and identifying investment opportunities in the aviation market.
It provides users with the key metrics to understand aircraft values:
- Year over year value changes and volatility
- Aircraft depreciation rates and expectation of value retention by age
- Market value/base value ratios and market strength/softness indicators
- Lease rate factors
These are essential for the following applications:
- Risk management including modeling Basel II regulatory capital requirements
- Evaluating exposure on specific aircraft loans and investments
- Developing a macro snapshot on the state of the current market
- Comparisons to previous market cycles, peaks and troughs
- Forecasting the direction and velocity of market trends
- Benchmarking asset classes/types
- Examining relative value between comparable aircraft at various stages in the production cycle