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Monthly Special Aircraft Report - A340-300 October 2013
Oct 06, 2013 - The current market demand for the Airbus A340-300 has continued to remain soft over the last 12 months due to the challenging environment. With demand for air travel picking up on a global basis, there is quite a bit of demand for newer aircraft which has started to push up values and lease rates slightly, especially for single aisle aircraft. Today, CV knows of at least 15 aircraft listed as available for sale and/or lease. 25 A340-300s are currently in storage, which is over 10% of the fleet, which is now comprised of 205 total aircraft. It is CV’s opinion that these percentages are considered high for an aircraft type that had been in production for over 15 years. 




In the last 12 months, CV has seen values and lease rates drop for the type by about 20-30% depending on the vintage. We see this trend continuing over the next 12-18 months, especially with the introduction of the Airbus A350 in the not so distant future which will most likely be used to replace the Airbus A340 on many routes. Due to the high price of fuel, older wide-body aircraft are a very tough sell to many investors and even operators in the current environment, which will add to the challenge of placing these aircraft. We are also seeing some operators replace their A340s with some A330s which could mean a larger supply of available aircraft in the near term. The potential cargo conversion for this aircraft may increase its remarketability and attractiveness to investors slightly but we expect that this will only be for a smaller number of aircraft. There is some demand from the part-out market for this aircraft to support the existing fleet but this will also only be the case for a small number of aircraft and should not have any significant impact on the existing supply of available aircraft. CV feels that this aircraft has a reasonable long term future as a passenger aircraft, especially with secondary and tertiary operators looking to grow certain long haul markets. The near term, however, will be tough for this aircraft as well as many other wide-body aircraft.

In looking at the leasing market, this aircraft is now leasing for $140,000 to $395,000 depending on the aircraft vintage. This is a decrease from last year of about 10-20% and is mainly due to the current market environment and the decrease in demand for the type increasing the overall supply of available aircraft. 

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