Premium #202 – Economic Analysis: What might a used A380 sell for in a low fuel cost environment?

2018 marks the termination of the first A380 leases (MSN 003 delivered in October 2007), likely causing used aircraft to enter the market. A key question, particularly for a group of German investors who underwrote early A380 leases, is what their values will be.  We have heard from one bank that these investors might need to be ready to take a haircut on asset value.

There is little question that the A380 offers profit potential for high density routes, particularly those which have multiple daily wide-body flights between congested hubs by consolidating flights. But the A380 needs to compete economically with other aircraft, including the Boeing 777-300ER. How do these airplanes stack up, and what is the point of economic indifference at which you would select either aircraft, given their prices?