AviTrader sponsorship ad

IBA highlights resilience of regional jet and turboprop aircraft values but performance variation due to secondary market supply

Air Baltic ©IBA

Independent aviation consultancy IBA, is optimistic about the resilience of regional jet and turboprop aircraft values, but expects value and lease performance to vary based on secondary market supply for specific models. IBA indicates that the supply of new regional jet and turboprop aircraft over the next one to two years is likely to be low, as OEMs are faced with diminishing backlogs, entry into service/delivery issues or significant deferrals. However, an oversupply of used aircraft, resulting in part from airline failures and fleet renewal programmes, will put pressure on the market value and lease rate performance of some regional aircraft models, with mid-life (twelve years old) and older aircraft feeling the greatest impact. 

IBA highlighted concerns around the potential oversupply of some Embraer E-Jet models. The collapse of Flybe in March released fourteen Embraer E-Jet aircraft, predominantly E175 models, into the secondary market, and data from IBA.iQ shows that Embraer E190 aircraft feature regularly in operator exit strategies including those of Air Canada, American Airlines and JetBlue. 

In the turboprop category, around 10% of the global fleet of DHC8-400Q aircraft was operated by Flybe. German Airways has filed for insolvency after Eurowings terminated its wet lease agreement with German Airways affecting fifteen DHC8-400Q aircraft, and Air Baltic and Austrian Airlines both plan to retire their DHC8-400Q aircraft over the next two years. 

Covid-19 is likely to delay operators’ fleet renewal programmes in many cases, but market values and lease rates for mid-life E190 and DHC8 aircraft are likely to suffer if market availability increases. 

IBA expects young (three years old) regional jet and turboprop aircraft to remain part of operators’ near-term fleet plans and negative movements in market values for these aircraft to be consequently limited, but this could change rapidly in the event of an airline failure or Chapter 11 event. 

In the United States, limits placed by the Scope Clause on the number of aircraft that can be operated by regional feeder carriers may put smaller regional jets at risk as airlines contract their fleets. IBA expects 50-seat aircraft such as ERJ-140/-145 and CRJ-200 to be most vulnerable. 

However, the shortage of pilots in the United States has eased since the outbreak of Covid-19, which may create an opportunity for carriers to re-negotiate the Scope Clause. It is also possible that airlines will deploy regional jets in place of larger aircraft in the near-term while air traffic demand recovers. 

Phil Seymour, President of IBA, says: “Any aircraft being sold on today’s market will be deemed “distressed” especially if a quick sale is required in a liquidation scenario. We expect regional jet and turboprop aircraft values to remain relatively resilient to the effects of Covid-19, especially in the longer-term. However, the devil is in the detail, and values for specific regional jet models will be vulnerable if availability increases in the secondary market through airline failures, Chapter 11 events or fleet replacement programmes.” 

In the regional engine market, IBA expects the CF34-8C (CRJ-700-1000) to benefit from having no direct replacement and to weather Covid-19 well in the long term, with some short term softening in values. Similarly, the CF34-8E (E-170/175) may experience a temporary decline in market value, but this will largely be concentrated in the airframe as opposed to the engine. 

The CF34-10E (E-190/195) was facing competition from the A220 and E2 prior to Covid-19, and is at risk from upcoming retirements by Air Canada and American. However, European operators seem more confident in the fleet. IBA expects the PW100 Family (ATR42/72 Q400) to hold relatively stable as the values are largely driven by OEM/MRO cost rather than market rates. 

Friday April 26, 2024
IndiGo is introducing wide-body aircraft into its fleet with an order for A350-900 aircraft © Airbus
IndiGo, India’s leading airline, has finalised a firm order for 30 A350-900 aircraft, marking a significant expansion opportunity for IndiGo to broaden its network and connect various Indian metros to destinations worldwide. These aircraft will be equipp... Read More »
Friday April 26, 2024
American Airlines has posted a net loss of US$312 million for the first quarter © American Airlines
American Airlines (American) has achieved record first-quarter revenue of approximately US$12.6 billion. However, it reported a net loss of US$312 million. Excluding net special items, the net loss was US$226 million. Despite challenges, American Airlines Grou... Read More »
Friday April 26, 2024
Cassio 330 electric-hybrid aircraft © VoltAero
In a significant advancement for VoltAero’s Cassio e-aircraft family, the company has commenced certification testing for the five-seat Cassio 330’s parallel electric-hybrid powertrain. The powertrain, mounted on a ground-based test bench, incorpor... Read More »
Friday April 26, 2024
H175 helicopter in flight © Airbus Helicopters
GD Helicopter Finance (GDHF), a newly established helicopter leasing and finance firm headquartered in Dublin, Ireland, has finalised a deal with Airbus Helicopters and GDAT for up to 20 H175 helicopters. The agreement comprises ten firm orders and ten options... Read More »
Friday April 26, 2024
LTM has completed its first base maintenance on a Boeing 787 Dreamliner © LTM
Lufthansa Technik Malta (LTM) has achieved a significant milestone by successfully completing its inaugural base maintenance on a Boeing 787 Dreamliner. The completion of the C-check on LOT Polish Airlines‘ B787-9, registered as SP-LSC, follows closely a... Read More »
Friday April 26, 2024
Airbus
Airbus has unveiled its consolidated financial results for the first quarter ending March 31, 2024 (Q1 2024). The company reported robust performance across its commercial aircraft, helicopters, and defence and space divisions. Gross commercial aircraft orders... Read More »
Thursday April 25, 2024
Turkish Airlines will receive six Boeing 737 MAX 8 aircraft from CDB Aviation © AirTeamImages
CDB Aviation, a wholly owned Irish subsidiary of China Development Bank Financial Leasing (CDB Leasing), has signed new lease agreements for a fleet of seven additional narrow-body and wide-body aircraft with its existing customer, Turkish Airlines (Turkish), ... Read More »
Thursday April 25, 2024
Condor took delivery of its first A320neo at a ceremony in Toulouse, France © Airbus
Condor, a German leisure airline, has received its inaugural Airbus A320neo on lease from Avolon following a ceremony in Toulouse. This milestone marks the airline’s ongoing fleet modernisation, which already features the A330neo for long-haul routes. By... Read More »
Thursday April 25, 2024
IAG Cargo has transitioned its 160-strong ground vehicle fleet at London Heathrow from diesel to hydrotreated vegetable oil (HVO) © IAG Cargo
IAG Cargo, the cargo arm of International Airlines Group (IAG), has successfully transitioned its 160-strong ground vehicle fleet at London Heathrow from Diesel to hydrotreated vegetable oil (HVO). HVO, derived from plant waste and fully renewable materials, s... Read More »
Thursday April 25, 2024
AJW has acquired one B787-900 Dreamliner © AJW Group
In a new development, AJW Group, a globally renowned independent provider of aircraft component parts, repair, and supply chain solutions, has announced the acquisition of a Boeing 787-900 Dreamliner. AJW Group has solidified its position with the acquisition ... Read More »
Thursday April 25, 2024
IBA predicts that the engine CFM56-7B is seeing the highest market value change with an increase of around 20% from 2023 to 2024
Aviation market intelligence and advisory company IBA has revealed that with rising engine lease rates and market values showing double-digit growth, the engine sector is now a “lessors’ market”. The latest IBA analysis shows that engine leasing activity... Read More »
Thursday April 25, 2024
Boeing has posted a first-quarter loss of US$355 million
Boeing, on April 24, disclosed a US$355 million loss for the initial three months of the year, grappling with a quality dilemma stemming from a January 5 flight where a panel detached from one of its aircraft. The reported loss, though significant, was less se... Read More »
Wednesday April 24, 2024
Ascent AeroSystems all-weather coaxial helicopter drone © Robinson Helicopter Company
Robinson Helicopter Company (RHC) has completed the acquisition of Ascent AeroSystems, which now operates as a wholly owned subsidiary of Robinson Helicopter Company. This strategic move underscores Robinson’s commitment to advancing innovation, expediti... Read More »
Wednesday April 24, 2024
JetBlue
JetBlue, ‘New York’s Hometown Airline®’, has unveiled its financial performance for the first quarter ending March 31, 2024. The airline disclosed a net loss of US$716 million, representing a year-on-year revenue decline of 5.1% to US$2.2 billion. As of... Read More »
Wednesday April 24, 2024
Spirit AeroSystems Wichita, Kansas
Spirit AeroSystems has disclosed an agreement with Boeing, whereby the aerospace giant will furnish advance payments totalling US$425 million, according to REUTERS news agency. This agreement aims to assist Spirit in addressing challenges such as elevated inve... Read More »
Wednesday April 24, 2024
RTX
RTX has reported first-quarter sales of US$19.3 billion, marking a 12% increase over the previous year. GAAP EPS rose by 32% to US$1.28, which included various adjustments such as acquisition accounting adjustments, tax audit settlements, and gains related to ... Read More »
Wednesday April 24, 2024
The new five year support contract was signed during MRO Americas in Chicago © Fokker Services Group
During the MRO Americas event, Fokker Services America (a subsidiary of Fokker Services Group, FSG) and HAECO have signed a component service support agreement for a duration of five years. This agreement positions FSG to deliver exceptional component servicin... Read More »
Wednesday April 24, 2024
Codeshare flights between ANA and Air India to connect Japan and India will begin in May 2024© ANA
All Nippon Airways (ANA) and Air India, India’s national flag carrier, have formalised a commercial agreement signalling the commencement of a codeshare partnership facilitating connectivity between Japan and India. Commencing on May 23, this collaborati... Read More »
Tuesday April 23, 2024
Robins Hayes
Robin Hayes, the former CEO of JetBlue Airways, has been selected to succeed C. Jeffrey Knittel as Chairman and Chief Executive Officer of Airbus Americas, effective June 3, 2024. Hayes, with a wealth of experience in global aerospace leadership, will take the... Read More »
Tuesday April 23, 2024
Beechcraft King Air 260 Multi-Engine Training System (METS) T-54A for the U.S. Navy © Textron Aviation
Textron Aviation has supplied the first two of potentially 64 Multi-Engine Training System (METS) Beechcraft King Air 260 aircraft contracted by the Naval Air Systems Command (NAVAIR) on January 25, 2023, after a comprehensive competitive process. The Beechcra... Read More »
MRO Americas 2024

2023 MEDIA KIT

Aviation Media Pack

Learn more on how AviTrader can expand your market

Please contact

Tamar Jorssen
Vice President Sales & Marketing
+1.778.213.8543
[email protected]
Mailing Address
AviTrader Publications Corp.
Suite 305, South Tower
5811 Cooney Road
Richmond, BC V6X 3M1
Canada

Subscribe to the most widely accepted news source in the aviation industry!


Free Daily, Weekly and MRO Publications delivered to your Inbox!
News Alerts, Editorials, Marketplace, Executive Interviews +more

Select publications:

*we respect your privacy and AviTrader will not share your email address to any 3rd Parties.

Scroll to Top
AviTrader

FREE
VIEW