Sep 05, 2013
The Current Market
The current market demand for the Boeing 777-200ER has remained stagnant over the last 12 months due to the lack of available aircraft. Only 3aircraft are listed as available for sale and/or lease. Most, if not all, of the existing operator base has kept this aircraft in their fleet due to its performance and efficiencies over older types. Therefore, we have yet to see how the secondhand market will respond to this aircraft once it starts to become more available.Current values in today’s market have remained stable with aircraft depreciating at a normal pace for this type of aircraft. As with the values for thisaircraft, we expect lease rates to remain stable going forward as well. As there have not been any used aircraft to hit the market place, it is difficult toascertain how the current market environment may affect values and/or lease rates.
With the lack of new orders for this aircraft and the trend by most operators to opt for more capable aircraft, such as the 777-300ER, we expect thesetrends to continue until a larger number of aircraft become available. We suspect that there will be some interest in the aircraft as a freighter at somepoint in the future. However, with the softness of the cargo market continuing and the lack of economical conversion for this aircraft, we do not expectthat this will happen over the next few years.For the near term, we expect that the current operator base will most likely keep this aircraft, which should continue to keep this market fairly stable.As more aircraft start to come out of their original operators, we will have a better indication of the potential secondary market.
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