Jetrader - January/February 2009 - 18

appraisal Boeing 757-200 Doug Kelly Vice President, Asset Valuation, AVITAS Tel: (703) 476 2498 E-mail: doug.kelly@AVITAS.com Background The Boeing 757 was initially developed as the short- to medium-range version of Boeing’s family of advanced technology aircraft: the B757/767. The fuselage crosssection of the B757 is identical to that of the B707, B727 and B737. First ﬂight for the B757-200 took place on February 19, 1982. Boeing offered two engine types, each with two thrust options, the RollsRoyce RB211-535E4 and -535E4B, and the Pratt & Whitney PW2037 and PW2040. Boeing ended production in late 2004 after delivering 1,049 B757s during the lifetime of the program. Current Market and Future Market Outlook Year Current 2008 Future Base Values at 2.5% Inﬂation Market Base Value Value 2009 2010 2011 2012 2013 2014 2015 2016 7.3 7.8 8.4 9.1 9.8 10.6 11.3 12.1 12.9 13.8 14.8 15.9 17.2 18.3 19.5 20.7 22.1 24.0 26.6 29.2 31.8 34.3 37.0 6.7 7.3 7.9 8.5 9.2 9.9 10.7 11.4 12.2 13.1 13.9 14.9 16.2 17.5 18.6 19.8 21.1 22.4 24.3 26.9 29.6 32.2 34.9 6.2 6.8 7.4 8.0 8.6 9.3 10.0 10.8 11.5 12.4 13.2 14.1 15.1 16.4 17.8 18.9 20.1 21.4 22.7 24.6 27.3 30.0 32.7 5.8 6.3 6.8 7.4 8.0 8.6 9.3 10.1 10.9 11.7 12.5 13.4 14.3 15.4 16.7 18.1 19.2 20.4 21.6 23.0 25.0 27.7 30.4 5.3 5.8 6.3 6.9 7.5 8.1 8.7 9.4 10.2 11.0 11.8 12.6 13.6 14.6 15.6 17.0 18.4 19.5 20.7 21.9 23.3 25.3 28.1 5.3 5.8 6.4 6.9 7.5 8.1 8.8 9.5 10.3 11.1 11.9 12.8 13.8 14.8 15.8 17.2 18.6 19.7 20.9 22.2 23.6 25.7 5.3 5.9 6.4 6.9 7.6 8.2 8.9 9.6 10.4 11.2 12.1 13.0 14.0 15.0 16.0 17.4 18.8 20.0 21.2 22.5 24.0 5.3 5.9 6.5 7.0 7.6 8.3 9.0 9.7 10.5 11.4 12.3 13.2 14.2 15.2 16.2 17.6 19.1 20.3 21.5 22.9 5.4 5.9 6.5 7.1 7.7 8.4 9.1 9.8 10.6 11.5 12.4 13.4 14.4 15.4 16.4 17.8 19.3 20.6 21.9 1982 6.5 1983 7.0 1984 7.5 1985 8.1 1986 8.8 1987 9.4 1988 10.0 1989 10.8 1990 11.5 1991 12.2 1992 13.1 1993 14.1 1994 15.3 1995 16.2 1996 17.3 1997 18.4 1998 19.6 1999 21.3 2000 23.6 2001 25.9 2002 28.1 2003 30.4 2004 32.8 All values are expressed in millions of U.S. dollars as of November 2008. The values assume the aircraft’s physical condition is average for an aircraft of its type and age, and its maintenance status is mid-time, mid-life, unless the aircraft is new or nearly new. The value deﬁnitions conform to those of ISTAT. The aircraft values stated herein are the product and property of independent third-party sources, and ISTAT neither approves nor endorses the information contained herein or the use thereof for any purpose whatsoever. Information current as of 11/24/08 18 The ofﬁcial publication of the International Society of Transport Aircraft Trading The current market for the B757-200 is soft with 19 passenger aircraft advertised as available or sale or lease and another 18 in storage. There are 785 passenger aircraft and an additional 144 B757-200 freighter aircraft among approximately 90 operators in service. The ﬂeet is heavily concentrated in North America with 66 percent of the world ﬂeet followed by Europe with roughly 21 percent and Asia/Paciﬁc with 8 percent. The market for the B757-200 is softening as the economy struggles and airlines experience weaker trafﬁc demands. The high oil prices that peaked in July 2008 at more than $140 per barrel helped initiate the airline capacity reduction plans and, although oil prices have declined precipitously to below $60 per barrel in November providing much needed relief to airlines, the global economic downturn may accelerate these reductions. The cargo market has also slowed reducing demand for freighter feedstock which is limiting the overall secondary demand for the B757-200 aircraft. In addition, the current ﬁnancial crisis has made it difﬁcult and more expensive to ﬁnance aircraft. All these issues are putting negative pressure on lease rates and values. We expect this negative pressure to continue throughout 2009 with a recovery beginning sometime thereafter. The aircraft makes a very efﬁcient replacement for the B727-200 freighter, of which more than 200 aircraft are currently in service. AVITAS believes that the oldest vintages of the type have dropped into a value range that justiﬁes conversion and the market base is likely to expand once the cargo market recovers from the current downturn.
Jetrader - January/February 2009

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