The ATR72-600 is leading the way in value stability among turboprops and the Embraer E175LR for regional jets with both aircraft displaying more resilience to the impacts of Covid-19 than other aircraft types.
According to the latest ‘Ask the Appraiser’ webinar, IBA experts Jonathan McDonald and Phil Seymour examined the trajectory of regional jet and turboprop aircraft values, identifying the trends and the impact of macroeconomic factors on the market.
The pandemic had less of an impact on regional jets and turboprops than on the narrowbody and widebody aircraft market, with the ATR72-600 and E175LR proving the most resilient.
Using aircraft values data generated by IBA Insight they found that the general availability of turboprop and regional jets has been decreasing since November 2021, but with significant variations between aircraft types. A total of 21 ATR72-600 aircraft were available in November 2021, but just 12 were available a year later in November 2022. By contrast, there were only two Embraer E175s available in November 2021, although this had climbed steeply to 11 of the type a year later.
Data also reveals that the total number of parked and stored aircraft has decreased overall since November 2021, but with some exceptions. Around 46% of the Bombardier CRJ 1000 fleet was either parked or stored in November 2021, falling to 38.1% by November 2022. By contrast, 22.9% of the ATR 72-600 fleet was parked or in storage in November 2021. As of November 2022, this had increased to 30.3%.
Explaining the key takeaways, IBA pointed to the current duopoly in the regional and turboprop marketplace between the Embraer E175 and ATR72-600 which is largely due to the Embraer E2 and Airbus A220 being more closely aligned to mainline aircraft.
The Ukraine conflict also continues to cause disruptions with leased aircraft operated by Ikar Airlines, S7 Airlines and UTAir currently stuck in Russia.
“There are likely to be rising operational costs for airlines, with increased labour and jet fuel costs,” says IBA. “Furthermore, a strong US dollar combined with sanctions on Russian oil will add further pressure.”
Inflationary pressure on consumers and producers is expected to last until the end of the year, with values and lease rates unlikely to track 10% inflation.