25-Feb-2013 9:31 AM

Avolon forecasts 'orderly market transition' to new generation narrowbodies

Avolon published (22-Feb-2013) an analysis of the expected market impact of the transition to new generation Airbus and Boeing narrowbody aircraft families - the A320neo and 737 MAX. Avolon chief technical officer Lucas Mollan said Avolon's analysis confirms the A320neo and 737 MAX "do not pose a disruptive threat to the long-standing competitive balance between the two aircraft families and that the transition to the new aircraft will be orderly." The successor aircraft are an evolution of the existing models rather than fundamentally new aircraft types. Avolon stated they will deliver fuel efficiency advantages deriving from advances in engine technology, with no other material changes to structure or performance. Avolon head of strategy Dick Forsberg said the pattern of ordering for the aircraft "confirms that there is still strong demand for current aircraft models, which bodes well for their continued liquidity and investment appeal." Avolon belives it will take eight years from entry into service for the 737 MAX and A320neo to build a 35% share of their respective family fleets, reflecting the very large installed base of current generation aircraft. The successor aircraft are not expected to directly impact values of current generation aircraft for a number of years. [more - original PR]

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