KBRA Releases Research Reports: Regional Aircraft Overview & Oil Prices and Airline Fleet Planning

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28-May-2015 Kroll Bond Rating Agency (KBRA) releases an overview on regional airports and a report on oil prices and airline fleet planning.

The first report, An Overview of the Regional Aircraft Market, focuses on how the regional aircraft market has undergone dramatic changes over the last decade. These changes have been propelled by rising fuel prices, growing demand for travel in emerging markets, as well as gradual industry deregulation in the U.S. and consolidation among U.S. network carriers, which has enabled more business ties between major and regional airlines. At the same time, global passenger traffic trends reflect a growing demand for regional aircraft which increasingly cater to markets that are either underserved or less profitable for mainline carriers.

The second report, Oil Prices and Airline Fleet Planning, discusses that although many airlines note that they are planning their business based on a higher price of oil, fleet-planning decisions indicate otherwise. As a result of the 40% year-over-year decline in oil, major airlines are increasingly delaying retirements, refurbishing aging types, and leasing mid-life aircraft, in a reversal of actions taken from 2011-2014 (although these carriers are still taking on newer, more-fuel efficient aircraft as well). However, these strategies are not without risk, as investments in vintage aircraft require a sustained period of cheaper oil in order to generate sufficient economic returns. To the extent that fuel prices remain stable at current levels, though, alternatives to new aircraft will continue to be in high demand, thereby benefitting owners and operators of these aircraft.

If you have any difficulties accessing the reports, please contact info@kbra.com or visit www.kbra.com.