Lessors: A320 Rates Recovering

A320 lease rates are making a recovery, according to a panel of lessors who spoke at the International Society of Aircraft Transport Trading (ISTAT) yesterday (October 8).

Ron Wainshal, CEO of Aircastle, said that rates had improved by five to 10 per cent, although five years ago A320 lease rates were expected to be much higher than they are now. "The A320 market has recovered a bit, but it's still in a bad place," he said.

In a poll of ISTAT delegates, 42 per cent believed rates for the A320ceo had improved, but that the introduction of next generation aircraft would undo this. Additionally, 30 per cent of the audience felt that only young aircraft have had an uptick and that rates for older A320s have stayed the same.

However, John Vitale, CEO of Avitas, did not agree. He has seen rates for both young and old aircraft improve and believes the uptick will be sustained.

Regardless of fluctuations, there is confidence in the A320 as both a leasing asset and as an efficient, successful aircraft. Backing this, Aengus Kelly, CEO of AerCap, said: "Those airplanes will fly no matter what market they're in; you'll always find a market."

Steven Udvar-Hazy, CEO of Air Lease Corporation disclosed his monthly lease rate for an A320 to be between $360,000 and $380,000. Although rates had fallen to $300,000 for some lessors, he doesn’t believe the industry will see such low figures again.

The trend is similar for A321 and A319 aircraft, the values of which dipped but have also started to recover.

Udvar-Hazy said he now has more than one customer interested in each A321 he has to trade. "For the first time, we can dictate prices on the A321."

The dip was in part due to the release of a large number of A321s by Spanair, which oversupplied the market and put a "tremendous amount of pressure on the A321", said C. Jeffrey Knittel, CEO of lessor CIT. Like his peers, Knittel is experiencing greater demand for the A321.

He added: "There is not an issue with these planes... They will have a place in aviation for a serious amount of time. It's really about your book value at the time and how you depreciate it."

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