ISTAT Jetrader - Summer 2022 - 37

expected to rapidly increase over the
next two years.
Aircraft Type
Oversupply?
How will this explosion in planned
production impact 737-800BCF
values? It is safe to say that today
there is significant demand for these
aircraft, but will the demand from
e-commerce sustain the production of
the 737-800BCF from 17 lines over the
long term?
In addition, the 737-800BCF is not
the only game in town, as there are
also 737-800SF and A321-200P2F
aircraft currently in production. These
two converted freighter programs have
a backlog of over 100 firm orders, and
we think it's reasonable to assume that
a combined 40+ 737-800SF and A321P2F
aircraft will be produced annually,
at least in the near term. So, will the
narrowbody freighter market be able to
absorb 90+ annual deliveries on top of
the over 600 aircraft already in service
(including 757-200 conversions)?
AISI is seeing signs that the
market may already be oversupplied.
737-800BCF lease rates struggle to
get above $185,000 per month when
we were seeing rates as high as
$215,000 per month in 2019. There
are also rumors that the world's largest
e-commerce company is demanding
even lower lease rates. As such, AISI
is of the opinion that Current Market
Values have plateaued for the 737800BCF,
with the spread between Base
A321-200 P2F
737-300SF
737-400SF
737-800BCF
757-200PCF
Number of
Aircraft In
service
7
82
151
83
295
Narrowbody Freighter Market
Main Deck
Pallet Positions
14
10
11
12
15
Source: AEI, Boeing, EFW, Precision Aircraft Solutions
Payload
Capacity
27 metric tons
18.5 metric tons
21.4 metric tons
20.7 metric tons
38.1 metric tons
Max Payload
Range
2,040 nm
1,700 nm
1,800 nm
2,025nm
3,150 nm
Will the narrowbody freighter market be able to
absorb 90+ annual deliveries on top of the over 600
aircraft already in service?
Values and Current Market Values
already shrinking.
Even though Boeing forecasts the
need for 1,200 converted narrowbody
freighters over the next 20 years,
AISI expects downward pressure
on 737-800BCF market values until
significant numbers of 757-200, 737300
and 737-400 converted freighters
are retired. It is worth noting that 757200,
737-300 and 737-400 freighter
retirements may be accelerated due
to the recent spike in fuel prices and
the potential for near- to mediumterm
fuel supply constraints that
737-800BCF - AISI 1 April 2022 Values
Year of Build
2001
2002
2006
2010
Current
Market Value
18.9
19.5
22.3
27.6
Current Base
Value
17.3
17.8
19.4
26.3
2023
15.5
15.8
17.8
24.4
2024
14.0
14.3
16.4
22.8
Future Base Values at 2.0% inflation
2025
12.7
13.0
15.1
21.2
2026
11.5
11.7
13.9
19.7
2027
10.3
10.4
12.6
17.8
2028
9.2
9.3
11.4
16.1
Aircraft specifications: 2001, 2002, 2006 - CFM56-7B26, 163,557 lbs. MTOW, Winglets; 2010 - CFM56-7B26/3, 174,200 lbs. MTOW, Winglets
Maintenance assumptions: Half-Life condition * All values are expressed in US Dollar millions.
Jetrader * SUMMER 2022 * 37
could keep jet fuel prices elevated for
some time.
Current Value Opinions
As of 1 April 2022, earlier build 2001 and
2002 737-800s conversion candidates are
now the norm, with Current Market Values
in the $10-12 million range. With this range
driven primarily by engine maintenance
condition, engines typically have three
to five years of stub life remaining. BCF
conversions cost approximately $6 million,
including heavy checks that can run
between $1.1 and 1.5 million, so the all-in
cost is $16 to $18 million.
ISTAT Jetrader - Summer 2022

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