Jetrader - March/April 2009 - 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

Jetrader - March/April 2009

Table of Contents 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 - Jetrader - March/April 2009
Jetrader - March/April 2009 - Cover2
Jetrader - March/April 2009 - A Message from the President
Jetrader - March/April 2009 - 4
Jetrader - March/April 2009 - Contents
Jetrader - March/April 2009 - 6
Jetrader - March/April 2009 - Calendar/News
Jetrader - March/April 2009 - Crunching the Numbers
Jetrader - March/April 2009 - 9
Jetrader - March/April 2009 - 10
Jetrader - March/April 2009 - 11
Jetrader - March/April 2009 - 12
Jetrader - March/April 2009 - 13
Jetrader - March/April 2009 - World Air Cargo Forecast
Jetrader - March/April 2009 - 15
Jetrader - March/April 2009 - 16
Jetrader - March/April 2009 - 17
Jetrader - March/April 2009 - Brain Drain in the Transportation Industry
Jetrader - March/April 2009 - 19
Jetrader - March/April 2009 - 20
Jetrader - March/April 2009 - Aircraft Appraisals
Jetrader - March/April 2009 - 22
Jetrader - March/April 2009 - 23
Jetrader - March/April 2009 - 24
Jetrader - March/April 2009 - From the ISTAT Foundation
Jetrader - March/April 2009 - 26
Jetrader - March/April 2009 - Aviation History
Jetrader - March/April 2009 - 28
Jetrader - March/April 2009 - 29
Jetrader - March/April 2009 - 30
Jetrader - March/April 2009 - 31
Jetrader - March/April 2009 - 32
Jetrader - March/April 2009 - 33
Jetrader - March/April 2009 - Advertising Index
Jetrader - March/April 2009 - Cover3
Jetrader - March/April 2009 - Cover4
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