ISTAT Jetrader - Autumn 2024 - 36

TOTAL FLEET - AVERAGE AGE
10.0
11.0
12.0
13.0
9.0
8.0
22.0
RETIREMENT TRENDS - AVERAGE AGE
28.0
26.0
24.0
■ Narrowbody ■
Widebody
■ Narrowbody ■
Widebody
Source: IBA Insight (Airbus and Boeing aircraft - Passenger/Freighter/Combi/Quick Change) - 27 June 24
maintenance burden grew with age.
After an aircraft's first lease, different
avenues are opened to realize further
value from the aircraft, as maintenance
condition becomes a more prominent
value determinant. For one, owners
may choose to pocket the maintenance
reserves associated with the asset.
The aircraft could remain in service as
a flier and could go through freighter
conversion or become a glider (i.e.,
engines are removed and placed as
stand-alone assets, or be parted out).
The current supply scarcity dictates
what is the best economic outcome
past five years. The higher average
fleet age is to perdure as deliveries are
delayed, and IATA predicts the fleet
renewal rate, the number of delivered
aircraft over the total fleet, to reach
4.6% of the global fleet this year.
Looking at Airbus and Boeing
aircraft fleets, using IBA Insight, the
clear uptick for the average age of
aircraft in service and at retirement are
testament to older aircraft being kept in
service for longer. As of June 2024, the
average retirement age for narrowbody
aircraft is 25.5 years and 24.2 years
for widebody aircraft. Conversely, the
At present, most aircraft are being kept in service, and
IATA reports that the average age of the global fleet has
increased by 18+ months over the past five years.
for an aircraft in terms of realizing
value from the metal beyond its
initial operations.
At present, most aircraft are being
kept in service, and the International
Air Transport Association (IATA) reports
that the average age of the global fleet
has increased by 18+ months over the
36 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
average in-service age for narrowbody
aircraft is 12.3 years and 12.6 years for
widebody aircraft.
Transactional Activity
Lease extensions have been the
preferred method for operators to
source interim capacity, whereby
airlines keep hold of the assets they are
operating and negotiate an extension
from lessors. It is a pragmatic solution
for both lessees and lessors, as it saves
on transitioning downtime and costs.
From the COVID-19 time of holiday
payment, lessors now can recoup their
losses by locking in lessees at higher
lease rates, and we are firmly in a
lessors' market.
Aircraft are also being sold to
current operators, and 15 airlines
have acquired capacity that way so far
this year. For instance, United bought
13 aircraft (two 787-9s from BOC
Aviation, nine 737-800s and two 737900s
from AerCap), Hawaiian Airlines
got one A330-200 from Macquarie
AirFinance, while SpiceJet secured one
737-700 from Cross Ocean Aviation
and two 737-700s from Echelon
Transportation LLC.
Several lessors have been selling
some of their assets to repay debts and
release liquidity, but those are getting
snapped up quickly by more lessors
seizing the opportunity to grow their
portfolios.
Aviation Research at MUFG has
taken a closer look at operators with
MAX and neo aircraft on backlog,
and the likes of United Airlines, China
Southern, Turkish Airlines, Jet2.
com, Xiamen Airlines, Southwest,
SunExpress and Qantas have turned
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ISTAT Jetrader - Autumn 2024

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