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April 20, 2024
Care to share?

mba Aviation released its market update for 1Q24 last week. The key highlights are are listed below along with links to their notes.  Their findings are consistent with what other firms are publishing.

Essentially, the paucity in new deliveries is impacting values as operators have to hold on to what they have, and i leasing, pay higher rates. In terms of engines, the GTF issue is having a similar, but smaller, impact.  Its a shortage of just about everything story.  The supply chain is wobbly, traffic looked strong all through 2023 but nobody is sure what happens this year and with labor rates much higher this year, airline financials are going to get squeezed.

And this comes on top of the Boeing MAX (7, 9, 10) issues and inelastic demand for the A321neo.

It’s never a dull moment, again. And January isn’t done yet. It might be a rough year ahead.

Engines:

  • Market Value movements are beginning to catch up with Lease Rate movements seen in previous updates.
  • Many engines saw the beginning of Market Values stability and growth where over the last few years, values may have experienced more volatility.

Aircraft:

  • Market Lease Rate Factors increased for most latest technology aircraft.
  • Market Values will continue to climb above Base for Narrowbody aircraft and climb back up to Base for Widebodies and Turboprops.
  • Market Value declines seen across Cargo and Regional aircraft.
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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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