Air Partner’s Tony Whitty comments on the regional aircraft sales and leasing market

After a busy 2017, Tony Whitty, Managing Director at Air Partner, comments on what the Group’s Remarketing team is currently seeing in the regional airliner market, with further details on specific models below.

“Over the last few years, we have remarketed several different types of regional aircraft, including E195s, E170s, E145s, ATR72s, DHC8s and CRJs. In recent years, new lessors have arrived in this sector in significant numbers. The influential players, such as Nordic Aviation Capital, Falko and Avmax, own large numbers of a range of aircraft types, and so airlines no longer need to worry about arranging finance to acquire regional models.”

REGIONAL AIRCRAFT MARKET APPRAISAL

Air Partner Remarketing Ratings:
A = good demand for type, low availability, relatively easy to place at values in line with appraisers
B = reasonable demand, some availability, can be placed with comprehensive remarketing
C = limited demand, high availability, need thorough remarketing to place on reasonable terms
D = very low demand, many available, distressed prices

ATRs: Air Partner Rating C+
Oversupply of new ATR72-600s from the manufacturer to lessors
-600 lease rates dropped 60,000 USD in last two years
Newer ATR72-500s dropping in value by 10+% per annum
-200s and older -500s attractive for freight conversion
Fedex order for up to 50 ATR72-600s and Silver Air’s firm order for 20 ATR42-600s are significant

DHC8s: Air Partner Rating C+
Orders continue but for small numbers of Q400 aircraft (the only remaining production model)
Many used Q400s been on the market for 1+ years
-100/200/300s still niche STOL (short take-off and landing) aircraft types that have very limited competition but they are getting old

E-Jets: Air Partner Rating B-
E145s trading well in used market but at low values – 70 operators worldwide
E175 popular in USA
E170 a niche aircraft – where will the Saudia aircraft end up?
Ex-TACA, Flybe, Borajet, Kalstar and Air Canada E190s and E195s proving slow to place. Very attractive manufacturer and/or export finance for new orders hurts the market for newer used aircraft
Several E170s and E190s have been parted out

CRJs: Air Partner Rating C+
CRJ200 values holding above appraisers’ values
CRJ200 cargo conversions steady
CRJ700 very niche but USA-dominated due to scope clause
CRJ900 – successful USA aircraft
CRJ1000 – only four operators

Fokker 50: Air Partner Rating B-
Niche aeroplane with concern over support
Good value, rugged construction – only four advertised for sale
Freighter conversions in limited numbers – expensive conversion cost

Fokker 70/100: Air Partner Rating B
Operator base has moved from Europe with many aircraft going to Australia and Papua New Guinea
Good value with great cabin that is still relevant
New operators in market, e.g. Tus, Air Niugini and Alliance Airlines (40)
Low capital cost ideal for low utilisation flying
Readily available green-time engines

Saab 340/Saab 2000: Air Partner Rating C+
Only around 60 S2000s built – largely been a European operated aircraft
Competition from ATR, CRJ200 and E145 restricted S2000 sales
Nearly 400 S340s built initially, with sales success in the USA with AMR Eagle
Good used market activity over the years with Rex Australia now operating 52 S340s
Ultimately the S340 has been replaced with 50 seat aircraft with better operating economics

MA60/MA700: Air Partner Rating C-
108 MA60s have been delivered to 26 operators in 18 countries
185 orders for the MA700 by 11 operators – deliveries scheduled to start in 2021
Poor safety record
Attractive pricing and financing likely to be key to the success to date
Interesting in comparison to where the manufacturers of the Sukhoi Superjet, C Series and MRJ currently stand in terms of operator base, orders and geographical penetration

Air Partner’s Aircraft Remarketing division has got 2018 off to a strong start, announcing last week the sale of a 2009-vintage Beechcraft King Air 200 on behalf of Air HH Luftverkehrsgesellschaft mbH Privat Jets. This transaction follows a successful 2017, in which the division won and fulfilled a number of mandates. Notable transactions included the sale and delivery of a third Kenya Airways B777-200ER aircraft to Omni Air International; the sale of two B747-400s to Jet Midwest Group on behalf of China Airlines; and the sale of two of Kenya Airways’ B737-700 aircraft, which were then leased back to Kenya Airways for continued operation. The team was also appointed by Saudi Arabian Airlines as its exclusive remarketing agent in respect of 15 Boeing 777-200ERs. It currently has a number of other mandates on a variety of aircraft, including a B787, several ERJ145s and an ATR72-500.