Jetrader - Spring 2014 - 19

Chart 3: New Deliveries vs. Used p
Airplane Transactions
% of in-service fleet
Used airplane transactions:
operator changes

Boeing characterized the market's reaction to this "newness
value factor" as a premium being placed on financing costs for
new-model deliveries.
"We're seeing that already with lessors insisting sale/leaseback terms should be longer. Value after the first lease is being
amortized to a lower value. The market intuitively is starting to
fix things and rationalize pricing to create a balanced and healthy
market that we're heading toward," Zolotusky said.
"We understand the drivers and see the future market as
strong. Meanwhile, the market is readjusting and doing so by
valuing newness more."

Future View

Deliveries

Source: Ascend

Boeing's analysis of the global in-service airliner fleet over the last
three decades showed that the delivery cycle strength for new jetliners
appears to be inversely correlated to the movement of used airplanes
in airlines' fleets. "We see that as industry choosing to balance itself in
terms of the supply and demand between new and used products," said
Boeing Capital's Kostya Zolotusky, who leads the jet builder's annual air
financing market forecast efforts. (Boeing chart from Ascend data)

and as fuel costs remain high. Historically, people have depreciated airplanes from purchase price in a straight line for more
than 25 years. Reality has competition keeping new plane prices
tighter and pressuring used plane values. This is why financiers
and investors are starting to charge more for new planes. The
newness value is increasing," Zolotusky said.

The company's 2014 analysis of both new and used market
conditions concludes that the industry's prospects continue to
find it one of the most attractive areas for investment as the
markets continue to adjust from the Great Recession.
"We continue to watch how global monetary policies could
potentially impact aircraft finance," Zolotusky said. "However,
we believe the industry is well-positioned for the outcomes of
inflation, higher interest rates or a combination of both. Asset
portfolios are excellent inflation hedges, and current all-in aircraft
financing costs are at historical lows."
To see Boeing's complete Current Aircraft Finance Market Outlook for
2014-2018, visit www.boeingcapital.com/cafmo.
Thanks to Boeing for supplying editorial content for this story.

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Jetrader * Spring 2014 PM
19
26/11/12 10:50


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Jetrader - Spring 2014

Table of Contents for the Digital Edition of Jetrader - Spring 2014

A Message from the President
Calendar/News
Q&A: Pete Seidlitz, President, Bristol Associates, Inc.
Financial and Leasing Update for 2014
2014 Aircraft Financing— A Manufacturer’s View
ISTAT Videos Spotlight the Breadth of Aviation Careers
Lewis University Flight Team Soars Above the Competition
ISTAT Holiday Receptions Rock the Globe
Omni Air International, Inc. Contributes $100,000 to ISTAT Foundation
Aviation History
Aircraft Appraisals
ISTAT Foundation
ISTAT Members on the Move
Advertiser.com
Advertiser Index
Jetrader - Spring 2014 - cover1
Jetrader - Spring 2014 - cover2
Jetrader - Spring 2014 - 3
Jetrader - Spring 2014 - 4
Jetrader - Spring 2014 - A Message from the President
Jetrader - Spring 2014 - 6
Jetrader - Spring 2014 - 7
Jetrader - Spring 2014 - 8
Jetrader - Spring 2014 - Calendar/News
Jetrader - Spring 2014 - Q&A: Pete Seidlitz, President, Bristol Associates, Inc.
Jetrader - Spring 2014 - 11
Jetrader - Spring 2014 - Financial and Leasing Update for 2014
Jetrader - Spring 2014 - 13
Jetrader - Spring 2014 - 14
Jetrader - Spring 2014 - 15
Jetrader - Spring 2014 - 2014 Aircraft Financing— A Manufacturer’s View
Jetrader - Spring 2014 - 17
Jetrader - Spring 2014 - 18
Jetrader - Spring 2014 - 19
Jetrader - Spring 2014 - ISTAT Videos Spotlight the Breadth of Aviation Careers
Jetrader - Spring 2014 - Lewis University Flight Team Soars Above the Competition
Jetrader - Spring 2014 - 22
Jetrader - Spring 2014 - 23
Jetrader - Spring 2014 - ISTAT Holiday Receptions Rock the Globe
Jetrader - Spring 2014 - 25
Jetrader - Spring 2014 - 26
Jetrader - Spring 2014 - 27
Jetrader - Spring 2014 - Omni Air International, Inc. Contributes $100,000 to ISTAT Foundation
Jetrader - Spring 2014 - 29
Jetrader - Spring 2014 - Aviation History
Jetrader - Spring 2014 - 31
Jetrader - Spring 2014 - 32
Jetrader - Spring 2014 - 33
Jetrader - Spring 2014 - 34
Jetrader - Spring 2014 - Aircraft Appraisals
Jetrader - Spring 2014 - 36
Jetrader - Spring 2014 - 37
Jetrader - Spring 2014 - 38
Jetrader - Spring 2014 - ISTAT Foundation
Jetrader - Spring 2014 - ISTAT Members on the Move
Jetrader - Spring 2014 - 41
Jetrader - Spring 2014 - Advertiser Index
Jetrader - Spring 2014 - cover3
Jetrader - Spring 2014 - cover4
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