Regional jet market returning to pre-crisis levels much faster than turboprops, says IBA

A much faster post-Covid 19 recovery is underway in regional jet utilisation, values and order rates, compared to turboprops.

That’s according to aviation data and advisory consultancy IBA, which recently conducted an ‘Aircraft Values’ webinar on the subject.

Data from IBA’s ‘InsightIQ’ platform indicates signs of recovery in regional jet fleet utilisation. Fleets were stored or parked in large numbers in August 2020, with only 49 per cent of Embraer E190 aircraft active. A year on, fleet usage has grown with E190 fleet utilisation rising to 70 per cent – a significant increase although still behind the 89 per cent pre-pandemic utilisation levels in August 2019, IBA said.

Source: IBA. Click to enlarge.
Source: IBA. Click to enlarge.

Turboprops are seeing a slower return towards pre-Covid 19 levels than regional jets though, according to IBA’s data. As an example, the pre-Covid 19 utilisation of the global ATR72-500 fleet was at 73 per cent in August 2019, dropping to 49 per cent at the same time in 2020, and having only made a slight recovery to 54 per cent in August 2021, the consultancy noted.

Looking at utilisation of these two aircraft classes across different global regions, IBA said turboprops continue to see increased activity across North America, Europe & CIS and Latin America, with moderate declines in activity tracked in Africa and Asia Pacific. Regional jets are tracking downwards in Asia Pacific and the Middle East but upwards in all other regions.

There have been 100 orders for regional jets so far this year, compared with a total of 171 in 2019. But orders for turboprops are yet to recover with just three registered orders having been made in 2021. This compares with 63 ordered in 2019.

Source: IBA. Click to enlarge.

Both regional jet and turboprop values have begun to stabilise following a steep decline as a result of the pandemic, with the value profiles of E190LR and ATR72-500 models “beginning to track base values again – albeit at a market value approaching soft value in many cases”, IBA said. Base values are unchanged for now, but remain “on watch”.

Secondary market trading volumes for regional aircraft have made a strong recovery, the company noted, with further gains expected to be driven by M&A in the sector. Based on current transaction levels, IBA estimates that the number of events in 2021 will be 921 – compared with a total of 1,082 in 2019. The E190AR has been involved in the most transactions so far in 2021, totalling 62.

Source: IBA. Click to enlarge.
Source: IBA. Click to enlarge.

“The recovery in regional jets so far this year has far outstripped that of turboprops, although both have maintained a similarly steady upward trajectory in the last quarter,” said IBA’s president Phil Seymour. “The regional jet market is concentrated on the fast-recovering US region, but we are starting to see some positive movements in the turboprop market, driven in part by an uptick in flight utilisation in Europe.

“We expect to see a continuing recovery in the secondary market for these aircraft types, driven by a growth in traffic in certain global regions and by low production rates.”

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