Jetrader - Fall 2014 - 43

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(>10 tonnes) will be 35,556 aircraft, which
is more than double the 17,739 aircraft in
service today.
Fleet growth of this magnitude cannot
come from new aircraft alone. Indeed, the
above figures predict a continuing secondary market for aircraft. Airbus forecast that
this growth will mean that around 5,300
aircraft will need to be remarketed into
the passenger aircraft sector with a further
1,850 going for freight conversions.

Age Restrictions Not a
Major Concern
Age restrictions, while certainly a factor
to be considered, are not going to suppress
this demand nor will they be a block to
future remarketing transactions. The rationale for this statement is that there is little
uniformity in the age limits themselves and
in some of those countries that have them,
their application can be somewhat elastic
dependent upon a variety of other factors
such as need, urgency and availability of
alternatives.
Some countries such as Indonesia,
Mauritania or Taiwan have a 10-year upper

limit on the age of passenger aircraft;
whereas as others, such as Bolivia, Ghana
or Pakistan, set the limit much higher at 25
years. For freight aircraft, there is a similar
range of age restrictions across the world,
ranging from 10 years to 30 years. From a
remarketing point of view, these limitations are simply another factor that must
be taken into consideration when implementing a remarketing project on behalf of
a client. Whilst in some ways these might
limit where the remarketing takes place, in
others it allows a greater focus within the
remarketing process. We would consider
this to be no different to any other key
factor within any other remarketing project
and simply an additional parameter to be
taken into account.

Summary
Overall, my view is that there is very
much a secondary market for aircraft.
Not only does it still exist, but it actually
appears to be growing. While economic
lives may have reduced over the years, the
demand for additional capacity has served
to at least halt this decline. Manufacturer
production rates are unable to meet current

demand, which is why airlines, which historically operated only brand-new aircraft,
are now taking additional units from the
secondary market.
Moreover, this demand is set only to
grow as emerging markets compete with
advanced aviation markets for ever-greater
capacity. Certain sectors of passenger and
freighter aircraft will see a doubling in
global fleet sizes within the next 20 years.
This will drive a demand for good-quality
aircraft within the secondary markets to
remain as passenger aircraft and develop
a continuing demand for conversion candidates to go down the freight conversion route. Although there will be some
limitations as to where these might go
due to aging aircraft restrictions, I do not
believe that these will, of themselves, have
a significant impact on the capability of
remarketing companies, such as my own,
to successfully place aircraft on behalf of
their clients.
Let me sum it up like this: Probus
Aviation is not about to commence a root
and branch review of its business strategy
anytime soon. I believe that the second life
of aircraft is here to stay.

You want to see more?

For P2F please contact
sales.conversion@efw.eads.net
For all Airbus aircraft MRO Services
please contact
sales.mro@efw.eads.net
or +49 351 88392176

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Jetrader - Fall 2014

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