ISTAT Jetrader - Autumn 2022 - 34

APPRAISAL
Boeing 787-9
Gueric Dechevanne
ISTAT Certified Senior Appraiser
Vice President, Collateral Valuations
gueric@cvllc.net
cvllc.net
Photo courtesy of Mario Ferioli.
O
n 17 September
2013, the
Boeing 787- 9
took to the
skies for a
five-hour-plus
inaugural flight,
beginning a comprehensive test
program that led to certification and
delivery to launch customer Air New
Zealand in mid-2014. The 787-9 is a
lengthened and strengthened variant
of the 787-8, with a 20-feet longer
fuselage and a 54,500-pounds higher
maximum take-off weight (MTOW),
seating 280 passengers in a typical
three-class arrangement with over
8,300 nautical miles range. It features
active boundary-layer control on the tail
surfaces, reducing drag.
Going forward, we expect the 787-9 variant to remain
the most popular among operators and investors alike.
not recovering at the same rate as
short-haul. Having a lesser impact are
Rolls-Royce Trent 1000 engine technical
issues involving some of the IPC, IPT
and HPT internal blades. Rolls-Royce
now has a fix for these issues, with most
engines expected to be repaired by yearend
2023. As global traffic continues
to recover and the RR engine issues
are addressed, Collateral Valuations
(CV) expects that all aircraft currently
in storage will return to service. In
addition, Boeing put production of the
entire 787 family on hold starting in
due to these issues. As of July, the
expectation is that deliveries will restart
later this year, but that has not yet
been confirmed.
Over the course of the pandemic,
Over the course of the pandemic, CV saw declines
in 787-9 market values and lease rates ranging from 7%
to 25% depending on vintage.
Of the delivered fleet as of July,
there are 57 787-9s in storage, mainly
due to the pandemic initially bringing
air travel almost to a halt and long-haul
international demand subsequently
34 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
late 2020 due to manufacturing quality
issues that are in the process of being
addressed. It is CV's understanding that
well over 100 787 family aircraft have
been manufactured but not yet delivered
CV saw declines in 787-9 market values
and lease rates ranging from 7% to
25% depending on vintage. However,
during 2022, levels have started to see
some recovery as demand for newer
widebody aircraft slowly returns. After
bottoming out at the $500,000 to
$850,000 per month range, depending
on vintage, we now see operating lease
rates of between $600,000 and $1
million per month. This upward trend is
expected to continue in the near term
as international traffic recovers further.
The Boeing production pause should
help stabilize values and lease rates in
the medium term, with a full recovery
to pre-pandemic levels expected to
occur in the next one to two years.
With so much cutting-edge
technology incorporated into one
aircraft when launched, it was no
surprise that the 787 had various issues
getting itself up and running. As stated
above, there are still ongoing issues
that have created additional challenges
for Boeing in the near term. But we
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ISTAT Jetrader - Autumn 2022

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