ISTAT Jetrader - Spring 2022 - 37

A350-900 - Oriel 4Q 2021 Values
Year of
Build
2015
2016
2017
2018
2019
2020
2021
Current
Market Value
81.0
83.0
86.0
90.0
96.0
114.0
135.0
Current
Base Value
91.0
97.0
104.0
111.0
119.0
138.0
157.0
2022
85.0
91.0
97.0
104.0
111.0
119.0
137.0
2023
80.0
85.0
90.0
96.0
103.0
110.0
118.0
2024
74.0
79.0
84.0
89.0
95.0
102.0
109.0
Future Base Values at 1.5% inflation
2025
69.0
73.0
78.0
83.0
88.0
94.0
100.0
2026
64.0
68.0
72.0
76.0
81.0
87.0
92.0
Aircraft specifications: Airbus A350-900, Rolls-Royce Trent XWB-84 engines, 272,000 kg MTOW.
Maintenance assumption: new aircraft - Full-Life; 1 year old 75% of Full-Life; thereafter Half-Life.
2027
59.0
63.0
66.0
71.0
75.0
80.0
85.0
2028
55.0
58.0
61.0
65.0
69.0
73.0
78.0
2029
51.0
54.0
57.0
60.0
63.0
67.0
71.0
2030
47.0
49.0
52.0
55.0
58.0
62.0
65.0
2031
43.0
45.0
48.0
51.0
53.0
56.0
60.0
All values are expressed in US Dollar millions.
The COVID-19 crisis has had
a profound effect on the world's
airlines and prompted substantial
groundings. Twin aisles have been
more severely affected as domestic
and regional travel restrictions were
eased sooner than international ones,
which disproportionately affected
widebody operations.
Despite this widespread disruption,
A350-900 order cancellations had
only totaled 28 aircraft, according to
the CAPA Fleets database. Some of
these, however, were simply airlines
rearranging their delivery skyline,
such as Lufthansa, which ordered five
aircraft after cancelling three.
Having been only in service since
2015, it would be unusual to see a type
so young to enter the secondary market.
However, the crisis caused by COVID-19
has forced very young aircraft onto the
market. In a highly publicized Chapter
11 reorganization, involving a rejection
of aircraft pledged in a EETC, LATAM
chose to focus its long-haul fleet on the
competing Boeing 787, thus rejecting
A350s already in its fleet and cancelling
the remaining orders. Other airlines
returning their A350-900s to lessors
include Hong Kong Airlines, Hainan and
Philippine Airlines. In addition, Kuwaitbased
lessor ALAFCO had yet to place
four already-delivered aircraft from
speculative orders.
Even though the number of aircraft
looking for placement is relatively
small, they exert downward pressure
on values and lease rates. Being a new
generation, more fuel-efficient aircraft
and with advanced freight capabilities,
the A350-900 is often the airlines'
choice to remain in service over older
types, even if only carrying cargo.
However, with long-haul passenger
service still depressed, few airlines are
looking to add twin-aisle capacity in the
near term.
Even prior to the pandemic,
however, A350-900 Market Values and
lease rates had been suffering, affected
by the general malaise in the twinValues
and lease rates have dropped
a modest 5% to 15%. Existing lease
rates were widely renegotiated to
the " power-by-the-hour, " or PBH,
model where the airline only pays for
hours flown.
When it comes to the Market
Value and lease rate recovery,
the A350-900 together with the
competing Boeing 787 are in the
preferred position thanks to their
technological superiority and the
expectation they will remain in
the world fleets for decades. The
short-term outlook depends on the
Being a new generation, more fuel-efficient aircraft
and with advanced freight capabilities, the A350-900 is
often the airlines' choice to remain in service over older
types, even if only carrying cargo.
aisle sector. Even though A350-900
values remained some of the strongest
in the sector, the swelling availability
of relatively young and quite capable
aircraft of the previous generation
at much lower prices still provided a
downward pull.
Entering the COVID-19 crisis from
this weakened position, the Market
speed of recovery in Asia/Pacific,
the type's main operating region.
The longer-term outlook is favorable,
with the temporary cut to announced
production rates (~10 pre-pandemic
per month to five) and the A350-900
being a likely replacement for the
older generation A330s, A340s, 767s
and 777s.
Jetrader * SPR I NG 2022 * 37

ISTAT Jetrader - Spring 2022

Table of Contents for the Digital Edition of ISTAT Jetrader - Spring 2022