Jetrader - March/April 2009 - (Page 10)

Aircraft Age at Conversion (1971-2008) 90 Narrowbody 80 70 Number of Aircraft 60 50 40 30 20 10 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 Years Widebody Medium Widebody a period of weak passenger market demand and the aircraft is too young to part out, conversion could be an excellent option. Question #2: Is a decline in popularity for the aircraft type likely in the next few years? Conversely, is demand developing for the aircraft as a freighter? The last ﬁve years have seen an unprecedented bull market for certain passenger aircraft types that also are excellent freighter candidates. With the prospect of strong proﬁts for passenger aircraft leases, lessors continued to lease into the passenger market and cargo conversions were delayed. It is now painfully clear that this period of prosperity has ended, and the time has come for those delayed conversions to be reconsidered. For example, the B767-300ER enjoyed an extended period of strong demand as trafﬁc grew rapidly and operators awaited the availability of the next generation of aircraft. Currently, a signiﬁcant global passenger lessee reconﬁguration costs are prohibitive (e.g. 747-400). The most obvious reason for erosion in passenger demand is aircraft age. The average age at which aircraft are converted ranges from 16 years for widebodies and 19 years for narrowbodies (see graph). The optimal conversion age range is approximately 12-22 years, with aircraft younger than 12 years having more earning power in passenger conﬁguration and aircraft older than 22 years having insufﬁcient useful life remaining to justify the conversion investment. Economic cycles will result in shifting the conversion window in down markets (i.e. full aircraft storage lots) seeing conversions earlier and boom times seeing aircraft remaining in passenger service longer. If the lessor’s aircraft is in the conversion window during AerData now incorporating Aircraft Management Solutions AerData now combines the capabilities, expertise and experience of formerly separate companies AerData and Aircraft Management Solutions, the supplier of the ALCA Software. The combined entity provides asset management software and administration services to more than 30 leading aviation companies including banks, operating lessors and service companies worldwide. AerData B.V. Tristar 1, Stationsplein 965 1117 CE Schiphol Airport, Amsterdam, The Netherlands T +31 20 655 9000 F +31 20 655 9001 E info@aerdata.com www.aerdata.com 10 The ofﬁcial publication of the International Society of Transport Aircraft Trading http://www.amsbv.com

Table of Contents Feed for the Digital Edition of Jetrader - March/April 2009

Jetrader - March/April 2009 A Message from the President Contents Calendar/News Crunching the Numbers World Air Cargo Forecast Brain Drain in the Transportation Industry Aircraft Appraisals From the ISTAT Foundation Aviation History Advertising Index

Jetrader - March/April 2009

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