The current market demand for the Airbus A320neo
has continued to remain strong since the launch of the aircraft in 2010. This demand has kept values and lease rates stable in the last 12 months. Today, CV
knows of at no aircraft listed as available for sale and/or lease. Out of 89 aircraft delivered, none are currently in storage, which is expected for such a young aircraft type. It is CV’s opinion that these percentages are considered average for the latest generation of a single-aisle aircraft type that has been in production for almost 30 years.
Current values in today’s market have remained stable and even increased slightly due to normal pricing escalation and the strong demand for the type. The increase in the production rate by Airbus may have a negative impact on values and lease rates in the long term but the short-term results will be unaffected due to the continued demand for the aircraft. This trend, which continue to show signs of stability due to the improving state of the industry in certain regions, is expected to continue over the next 12 months. Although some indications that the global economy may be slowing in certain countries, we do not see the much potential for values and lease rates of this aircraft to for the foreseeable future.
In looking at the leasing market, this aircraft is now leasing for around $370,000 per month for new aircraft on average which is around a $35,000 premium over the Airbus A320CEO. With the increase in production from Airbus and low fuel prices making used aircraft very attractive, it has created quite a bit of competition for the lessors to place new aircraft which has put pressure on lease rates. As fuel prices rise and airlines shift their focus to new generation aircraft, such as the A320neo, we expect lease rates to remain stable or increase over time.
CV believes that the A320-200NEO with its quieter wide cabin, offering strong customer appeal, containerized cargo, commonality with other Airbus products, competitive choices of engines, fly-by-wire advantages, and being a part of a family of single-aisle aircraft, will keep this aircraft in strong demand well through the next decade.
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