Growing industry speculation about the imminent launch of upgraded single-aisle airliners powered by advanced turbofans is beginning to cause ripples in the aircraft finance market.
Leading lessor AerCap says the prospect of improved variants is partly behind its decision to stop buying new aircraft, while Qantas has adjusted the residual values of its fleet to reflect the likely impact that these new models could have on used prices.
AerCap chief executive Klaus Heinemann cites concern with "re-engining opportunities" on narrowbody aircraft, which are core to its portfolio, as one reason for its current hesitation to "engage in conclusive order discussions".
He adds: "We want to observe a little bit how these discussions pan out with the manufacturers." Heinemann expects more clarity on re-engining talks "by the middle of the year", when AerCap could make a judgement about "the expansion side" of its business.
 |
|---|
© Tim Bicheno-Brown/Flightglobal.com |
Indications from Airbus show that it aims to decide by July on the launch of new A320 family variants powered by the CFM International Leap X and Pratt & Whitney's geared turbofan. Boeing plans to reach a similar conclusion about the 737 by the end of the year.
In its latest earnings statement Qantas revealed it is changing its fleet residual values "based on the introduction of next-generation aircraft" and a "reduction in secondary market demand increasing pressure on residual aircraft values".
From 1 January, all Qantas's passenger aircraft will be depreciated to a residual value of 10% at 20 years, compared with the previous policy of 12.5% or 20% at 20 years, depending on aircraft type.
While the company has not indicated its definition of "new-generation aircraft", this is likely to refer to the proposed re-engined single-aisles as well as all-new airliners such as the Airbus A350, Boeing 787 and Bombardier CSeries.
Industry watchers believe that current uncertainties over re-engining plans are causing some edginess in the market. "It's not clear whether a re-engined A320 or 737 would in fact become the 'replacement study' aircraft...precedent might suggest it will," says John Slattery, president of leasing company GreenStone. "I suspect until [Airbus and Boeing decide on their plans] sales will be limp for both of them."
Rikard de Jounge, a senior director at appraiser Avitas, says that if the upgraded variants go ahead, the owners of current generation aircraft "will be left holding the bag. The economic life of their assets will be curtailed."
Source: Flight International
