21-Sep-2012 8:44 AM

AviaAM Leasing: Economic uncertainty forces narrowbody prices down

AviaAM Leasing reported (20-Sep-2012) economic uncertainty continued to force down prices for narrowbody aircraft over 1H2012. The largest price drop was on older generation aircraft. Boeing 737-300 and 737-400 prices were down 13% in comparison with late 2011 and early 2012, attributed by AviaAM deputy CEO Gediminas Siaudvytis to the ample supply of the aircraft in the market. The leasing market is also showing sensitivity to the intensifying production rates of major aircraft manufacturers. Boeing and Airbus have increased production by 10% (compared to 2011) and are planning to deliver over 1110 new aircraft by the end of 2012. AviaAM also reports demand for large aircraft is shrinking, with carriers uncertain about the general economic situation and their own futures. Some carriers are also experiencing "serious financial difficulties". AviaAM stated their is an increasing trend by airlines towards smaller, regional jets in order to optimise their route maps and lower operational costs. Regional jet lease rates have increased, as 50+ seat aircraft are becoming more and more popular while their manufacturers maintain stable production rates, which are "quite moderate" in comparison with narrowbody output from Airbus and Boeing. [more - original PR]

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