AIRCRAFT MARKET SUMMARY
The Current Market
The current market demand for the Airbus A330-300 has remained stable due to the continued demand from its operator base. Today, CV knows of only 1 aircraft listed as available for sale and/or lease. Out of 654 aircraft built, only 19 are currently in storage, which is less than 3% of the fleet. It is CV’s opinion that these percentages are still considered very low for an aircraft type that has been in production for over 20 years.
Over the course of the last 12 months, CV has seen values remain fairly stable for the type with a drop of 5-10% depending on the vintage. Lease rentals have also remained somewhat stable with a slight drop of 5-7% during the same timeframe. Although Rolls Royce seems to continue being the engine of choice by many operators, we have not seen any big value differences between the variants thus far. We see this trend continuing over the next 12 months as the industry continues to have a strong appetite for the type.
The A330 does have the advantage of not only being an excellent aircraft but also not having many competing in-production aircraft at the current time. The delays on the 787 and the fact that the A350 has only started to deliver, have also helped the maintain some of the demand of this aircraft due to many operators choosing the A330 to either compliment such orders or to be used as interim lift. CV does feel that, even when the 787 and A350 enter into service, the A330 should continue to see a good long-term future as a passenger aircraft since we feel that this aircraft will serve as a great compliment to an A350 fleet serving various shorter-range markets. Overall, CV still feels that this aircraft has a strong and viable long-term future as a passenger aircraft as well as having the potential for a good converted freighter aircraft.
Current Market Value (CMV):
The Current Market Value (CMV) of an aircraft is the appraiser’s opinion of the most likely trading price that may be generated for an aircraft under the market circumstances that are perceived to exist at the time in question, according to the International Society of Transport Aircraft Trading (ISTAT). The current market value assumes that the aircraft is valued for its highest and best use, that the parties to the hypothetical sales transaction are willing, able, prudent and knowledgeable, and under no unusual pressure for a prompt sale, and that the transaction would be negotiated in an open and unrestricted market on an arm’s length basis, for cash equivalent consideration, and given an adequate amount of time for effective market exposure to perspective buyers.
Base Value (BV):
Base value is the appraiser’s opinion of the underlying economic value of an aircraft in an open, unrestricted, stable market environment with a reasonable balance of supply and demand, and assumes full consideration of its “highest and best use”. An aircraft’s base value is founded in the historical trend of values and in the projection of future value trends and presumes an arm’s length, cash transaction between willing, able and knowledge parties acting prudently, with an absence of duress and with a reasonable period of time available for marketing.
Current Market Value (CMV):
To determine current market values of aircraft, CV uses, as our main source of data, any and all known reported market values. These values are extracted from numerous aviation industry sources and from CV’s proprietary and confidential transaction database.
As a secondary consideration, CV also analyses and gathers data on factors that influence the market value of an aircraft, such as its age, condition, configuration, fleet composition of such aircraft, similar aircraft available to the market, number of aircraft stored, operating economics, new aircraft prices, and the current state of the environment for the aviation industry.
This information is then entered into CV’s own proprietary transaction database and analyzed to determine a current market value based on a single sale transaction and using the assumptions as outlined in each aircraft valuation report at the time specified on the report.
Base Value (BV):
To determine its Base and Future values, CV first analyses any and all transaction information within its own proprietary database. This analysis allows CV to then establish the new price of an aircraft at a specific point in time. Historical data is then analyzed to determine the average depreciation rates of aircraft based on various conditions. This analysis is also broken down by aircraft type, mission, and in or out of production status. The result of these analyses is a depreciation factor which can then be applied to the various aircraft valuation models which CV utilizes for its valuation services and publications. Based on each valuation model, CV then creates base value curves for each aircraft which provide the base and future values for the aircraft which are reflected in the Turbine Aircraft Guide.
The Lease Rentals provided in each valuation report represent CV’s opinion of aircraft lease rates in today’s operating lease environment. These lease rates are derived from CV’s own proprietary transactions database which contains a wide range of lease transactions received from numerous sources within the industry. This data is then compiled to produce the lease rentals provided in each aircraft valuation report.
Maintenance Cost Data:
The maintenance cost data provided in the Turbine Aircraft Guide is information that has been collected from various industry sources such as maintenance publications, conferences, MRO facilities, manufacturers, and financial institutions. The data represents the current estimated maintenance costs for such aircraft based on the assumptions and conditions provided.
Statement of Independence:
The aircraft valuation reports provided in the Turbine Aircraft Guide represent the opinion of Collateral Verifications and are intended to be advisory in nature. Therefore, CV assumes no responsibility or legal liability for actions taken or not taken by the purchaser of the Turbine Aircraft Guide or any other party with regard to the data provided in each report. By accepting these reports, the purchaser agrees that CV shall bear no responsibility or legal liability regarding these reports. CV also states that these valuation reports have been independently prepared and fairly represents the aircraft and CV’s opinion of its values.